Freight Shipping Guide 101: Everything You Need to Know (And More)

Importance of Correct Freight Classification

One of the most critical aspects of LTL freight shipping is freight classification. Assigning the incorrect freight class to shipments can result in expensive fees, delays, and potential damage while in transit. And you obviously don’t want that! Properly classifying your freight can decrease your shipping costs and yield more precise freight quotes.
Definitionally, freight class provides a standardized method to categorize LTL freight based on factors such as density, stowability, liability and handling. There are 18 different freight classes that assist carriers and shippers in identifying, comparing, and pricing their shipments effectively.

By understanding the importance of accurate freight classification, you can ensure smooth and cost-effective shipments, avoid unnecessary delays, and maintain compliance with industry regulations. Are you ready for (freight) class?

What is freight classification?

Freight class is one of the most important factors to consider when trying to reduce your overall shipping expenditure. By properly classifying your freight, you’ll be able to get more accurate quotes and avoid costly delays and reclassification fees. But freight classification can get complicated — especially for small and mid-sized businesses (SMBs) that are juggling multiple shipments and priorities. The good news is that we have created this comprehensive guide full of freight class tips that will help you speak the lingo and class your freight with confidence.

Freight class

Freight class is a standardized way of classifying less-than-truckload (LTL) freight shipments based on varying characteristics, including: density, stowability, liability and handling. A commodity’s freight class is assigned by the National Motor Freight Traffic Association (NMFTA), giving LTL freight carriers and shippers a simple way to compare and price it. Freight class is broken up into 18 numeric categories, ranging from class 50 (the least expensive) to class 500 (the most expensive). Each of the 18 commodity categories is defined based on a number of factors that determine how cost-effective it will be to transport the shipment. For instance, easily stowed items like bricks and cement are class 55, while couches and stuffed furniture fall under class 175.

NMFC codes

Every type of product or commodity corresponds to a National Motor Freight Classification (NMFC). While freight class represents a finite number of broad commodity categories, NMFC codes represent more specific subcategories within freight classifications for further identification. For example, while computers and monitors will both have a freight class of 92.5, they will each have unique NMFC codes based on their different specifications and shipping requirements. These codes serve to standardize fair rates applied to all shipment commodities.

Factors that determine freight class

When preparing your LTL freight shipments, it’s important to understand the variables that could impact your freight class. Freight class is calculated based on several factors that fall under four main categories: density or commodity type, stowability, liability and handling. Let’s take a look at these four categories and what they mean for your freight classification.

Density or commodity type

Density is determined by the total weight in pounds divided by total cubic feet. In other words, the density represents the amount of space your freight will take up on a carrier relative to its weight. Freight with a lower density will typically correlate to a higher (and more expensive) freight class. In some cases, commodity types have predictable sizes and weight. These standardized commodity types will have pre-determined freight classes, allowing freight shippers to skip density calculations during shipment preparation.

Stowability

Most freight should be fairly easy to fit into the shipping container. However, some commodities are cumbersome, difficult to load or can’t be loaded with other items on the container for various reasons. Stowability comes down to this: if an item is difficult to fit in the truck, it will have a higher freight class, which in turn will result in a higher overall shipping cost. For example, things like wooden cabinets and chairs fall under a 300 freight class because they can be difficult to stow in freight trucks, while easily packaged items like nuts and bolts fall into NMFC class 50.

Liability

Freight that is at an increased risk of being damaged, stolen or causing damage to other freight within the vicinity has a higher liability. Combustible materials, for example, are at an increased risk of harming the surrounding environment, which will result in a higher freight class and cost per pound.

Handling

Freight goes through several checkpoints and distribution facilities on the path to its final destination. For this reason, items that require special handling and additional care — e.g., HAZMAT and sensitive electronics — may have a higher freight class.

How to determine your freight class

STEP 1:

Determine if the shipment is commodity - or density-based If you ship commodities that vary in size, or if the number of items in each shipment varies, your freight will likely be assigned a density-based classification. Commodity-based classifications, on the other hand, are given to commodity types that are fairly consistent in size and weight from shipment to shipment. Ceramic tiles, books and bottled drinks are common types of commodity-based classifications.

STEP 2: Calculate density

1. Measure the length, width and height of your shipment. Keep in mind that this measurement includes pallets and packaging that surrounds the actual shipment. It’s always a good idea to round up to the next inch or so.
2. Multiply the length, width and height that you took note of in step 1. This calculation gives you the total cubic inches of the shipment. To convert this number to cubic feet, divide by 1,728.
3. Determine the weight of the shipment in pounds. Divide this number by the total cubic feet of the shipment. The result is the pounds per cubic foot, or density. If you are shipping multiple pieces, it will be easier to add the total weight of each piece before dividing by the total cubic feet.

STEP 3: Determine freight class

Working with a third-party logistics (3PL) company will grant you access to a transportation management system (TMS) with a built-in freight class calculator. 3PLs like Unishippers also provide consultation to help you with any questions you have along the way. Additionally, online resources like ClassIT.com can be helpful in determining your freight’s classification through simple search functionality. And if you’re working with commodity-based freight, the manufacturer should be able to queue you in on the freight class for their products. if you’re working with commodity-based freight, the manufacturer should be able to queue you in on the freight class for their products.

Freight class cost implications

Assigning the correct freight classification code to your shipments is not a mere formality; it has far-reaching implications for your business operations, compliance, and overall efficiency. Incorrect freight classification can lead to a cascade of costly consequences that can severely impact your bottom line and disrupt your supply chain, including:

• Financial penalties
• Delays in shipments
• Legal consequences
• Damage to reputation

Ready to learn more? Check out Everything You Need To Know To Properly Class Your Freight.

Additional LTL freight pricing considerations (aside from freight class!)

Pricing strategies for less than truckload (LTL) shipping are designed to balance cost-efficiency with service quality, catering to the specific needs of shipments that do not require a full truckload. Here are some key strategies:

1. Distance-Based Pricing: Charges increase with the distance the cargo needs to travel. This strategy considers fuel costs, driver wages, and the wear and tear on transportation vehicles.
2. Dimensional Pricing: Instead of just weight, this strategy takes into account the dimensions of the shipment. It is particularly useful for freight that is light but occupies a lot of space, ensuring costs reflect the space used in the truck.
3. Minimum Charge: Most carriers have a minimum charge that covers the basic costs of transporting even small shipments. This ensures profitability regardless of the shipment size.
4. Discounts and Negotiations: Carriers often offer discounts based on volume, frequency, or through negotiated terms with regular customers. This can significantly lower the cost for shippers who offer consistent business.
5. Accessorials and Surcharges: Additional fees for services such as inside delivery, liftgate service, or residential delivery. These are typically added to the base rate depending on the specific needs of the shipment.
6. Fuel Surcharges: An adjustable pricing strategy that fluctuates with the cost of fuel. This surcharge compensates for the variable fuel costs that can significantly impact the overall shipping expenses.
7. Seasonal Pricing: Adjusting prices based on seasonal demand allows carriers to manage capacity effectively. During peak seasons, prices may increase due to higher demand for shipping services.

By employing these strategies, you can get competitive and fair pricing while ensuring that your operations remain sustainable and profitable.