How many of you ship LTL?
How many of you get frustrated when it comes to determining the Freight Classification of the products you SHIP, or PURCHASE, that you are on the hook for FREIGHT EXPENSE?
How many of you are familiar with the NMFC?
Not unlike the nauseating gut feeling you get from trying to figure out IRS regulations in order to do your taxes, many shippers have similar feelings when it comes to trying to understand the impact of the NMFC on their LTL shipments and resulting freight expense.
Just to refresh your memory, the following explanation was taken from the National Motor Freight Transportation Association’s web site:
“The National Motor Freight ClassificationTM (NMFCTM) is a standard that provides a comparison of commodities moving in interstate, intrastate and foreign commerce. It is similar in concept to the groupings or grading systems that serve many other industries. Commodities are grouped into one of 18 classes—from a low of class 50 to a high of class 500—based on an evaluation of four transportation characteristics: density, stowability, handling and liability. Together, these characteristics establish a commodity’s “transportability.”
As you may or may not be aware, there have been some recent changes to the NMFC. You should be aware that the NMFC is not a static reference document. Rather, it is an evolving and changing reference document that can be petitioned for changes by those who are card-carrying members of the National Motor Freight Traffic Association.
So what does this mean for you as a shipper? The classification trend had traditionally been to favor density-based ratings. However, as manufacturers seek to find ways to reduce the weight of their shipments without changing the utilitarian nature of their end product, finding ways to replace metal with polycarbonate and PVC has reduced the density of the shipment without reducing the price or functionality of the end product. But the carriers are still on the hook to provide you with the same cubic capacity on the trailer while their density-based cost basis is being reduced and their operating expenses are going up. Net result? The LTL carrier goes to the NMFC to petition for a change in YOUR PRODUCT Freight Classification to a Higher Class in order to mitigate the loss of revenue due to the change in the density of your product.
WHAT A GREAT GAME TO PLAY? RIGHT?
Do yourself a favor and go spend some time perusing the NMFC’s web site. You may discover that things are not as static as you might think.