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FREIGHT CLASSIFICATIONS - Does the "Density Effect" have you confused?

Posted by Marc Wojnowich on Nov 11, 2017 10:21:43 AM
Marc Wojnowich
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The concept of density was first discovered in ancient Greece by the mathematician Archimedes. During his time, Archimedes used this concept to assist the King of Syracuse, who had suspicions that he was being swindled by the metal craftsman who made his golden crown. Jumping forward 2,000 plus years to the modern freight industry … your understanding of density still plays a crucial role in making sure you’re not getting ripped off!Archimedes.jpg

So what is density and why does it matter? Well, according the physicists, density is the quantity of mass per unit volume, but according to freight carriers, density equals dollars. The reason density is such an important concept for carriers is that it is a straightforward, tangible, and consistent metric that forms the basis for their new-age charging structure.

A truck’s hauling capacity is limited only by weight and space. Many shippers incorrectly think of their cost as based on their weight or distance traveled, but just because you are shipping potato chips and not bricks doesn’t mean it’s cheaper. It’s no different than shipping an unstackable, unusual, or awkward shaped load. They take up precious space and leave unusable airspace above.

So what’s Freight Class all about?

For years carriers have relied on Freight Class as the sscreen-shot-2016-10-21-at-8-51-00-amtandardized method of freight pricing defined by the National Motor Freight Traffic Association (NMFTA). In the US, a National Motor Freight Classification (NMFC) is allocated to products and commodities, which serves as the guide for LTL (Less Than Truckload) industry pricing. The NMFC codes break down into 18 classes from Class 50 (cheapest) to Class 500 (most expensive) based on four characteristics.

  1. Density – This is THE major factor in determining freight class and can be found with only a tape measure, scale, and two equations. To calculate, use this formula
    1. Volume in Cubic Feet (CFT) = Length x Width x Height (inches) / 1728
    2. Density in Lbs. per CFT = Weight (Lbs.) / Volume in Cubic Feet (CFT)
  1. Stowability – How is your shipment packed? Is it square on a pallet or is it oddly shaped? Think of bagging your grocery cart. What’s easier to pack, 5 cereal boxes or 5 bunches of bananas?
  1. Handling – Is the freight palletized or are you shipping materials requiring special handling equipment? Back to the grocery store. What’s easier to deal with, a dozen single eggs or a dozen eggs in a sturdy egg carton?
  1. Liability – Are you shipping valuable electronic equipment, fine china, or lead?

What’s changed?

Density has always played a role as #1 above demonstrates; however, today, density is playing the largest role. Carriers have invested heavily in laser scanning equipment making it easier than ever to measure your freight. Regardless of NMFC determination, when a carrier gets an Actual Average Density of all of your freight, and it’s not in line with the your Billed Average Class, you can expect a change in cost. Most likely this cost change will come in the form of reduced discounts, yielding higher realized rates.

Furthermore, the NMFC determinations are changing. More and more NMFCs are changing to a “density based” schedule with numerous sub-groups based on density.

Now what?

In the rawest form, if you use these tools you won’t need an ancient Greek mathematician to help you figure what shipping class you fall into. If you are still unsure, reach out to me and I will get you on track.

In fact, I'm offering a Free 30 Minute Freight Class Consultation... Check it out!

 

Request a Free Freight Classification Consult

Tags: Freight Class, Density

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