Less Than Truckload shipping (LTL) is a method of transporting freight that allows smaller producers to ship their products. It is useful in the shipping world because it allows a larger variety of products to come to market while insulating producers from the threat of expanding too quickly. These are just the tip of the iceberg of what makes this arrangement work; there are still many components of the arrangement that must be discussed, including the cost of shipping. Here are seven factors that determine LTL freight rates.
In the shipping industry, rates are set, so the more a shipment weighs, the less you pay per hundred pounds. As your weight starts getting close to the lowest weight category, you will start getting charged at that rate.
Like weight, the distance that freight must travel factors into the cost per hundred pounds. This is especially important if the carrier must travel outside of their normal delivery area or must pass off your shipment to another carrier to complete the journey.
Another factor that determines LTL freight rates is the density of the freight. Density is determined by dividing the total weight of the freight by the total cubic feet.
The classification of the freight is determined by its density, which falls into one of 18 different classes that range between 50 and 500. As the class decreases, it becomes denser and harder to damage, making the rates lower. Higher classes are typically less dense and take up more space, and these shipments command a higher rate to transport.
FAK is an agreement reached between the client and the shipping company that allows different classes to be shipped at the same rate. This simplifies pricing and billing for both parties.
Established by each carrier, this is the base rate they charge per hundred pounds. Things such as demand, volume, and other associated costs all play a role in this.
There are also several variable factors that play a role in the shipping cost of LTL freight. The relationship between the client and carrier can allow discounts for long-term customers. There is also the possibility that your product needs special pickup considerations that will cost extra time and money. These are just two examples of the many variables capable of impacting price.
For more information on LTL freight shipping by Diversified Transportation Services, contact us today. Our team of experts can help devise the perfect solution for getting your products to where they need to go, be it across the state, the country, or the world.
Whether you're a company looking to improve one facet of your supply chain, your entire supply chain, or simply looking for a transportation and logistics consultation, we can help.