If you are new to the shipping world, there might be a lot of terms and acronyms flying around the industry that are hard to understand. Like any industry, there is a language unique to logistics and shipping. Getting to know it will take time but eventually, it will be second nature. There are some baseline questions you should be asking when you are starting out and looking for less than load (LTL) carriers and full truckload carriers. How the shipper answers your questions will let you know much about them and how they conduct business. You’ll find out if they are fair, reputable, and trustworthy with handling your products. These essential questions to ask you LTL provider will serve you well as you start out in the logistics world.
Always a good first question for the shopping novice. Less than load shipping, or LTL, is when you have product to ship but it is less than a full load. Full load shipping is when you have so much product that you need an entire 53 ft. trailer to move it. LTL is when you don’t need the entire trailer, but the load you have is too large for a package delivery service or the post office. A local driver will make pickups at several different companies throughout the day until his trailer is full, then your shipment goes to a cross-dock operation to get on another truck and on to the final destination. It is a very common shipping method that many small companies utilize.
Third-party logistics (3PL) lets companies outsource their shipping needs to a third-party provider rather than doing it themselves. 3PL companies offer a variety of services under the umbrella of logistics. They do everything from fulfillment, to logistics, and to distribution. Think about 3PLs as a logistics solutions company that will do whatever you need to get products moving from point A to B. Many 3PLs offer international shipping and navigate the paperwork matrix for you.
Before you schedule a pickup, you need to ask what commodities the company will ship. Some have restrictions on the goods they will accept. You don’t want to wind up in a situation in which you think you’ve found a good carrier to later find out they won’t carry your merchandise. Shipping some commodities is banned by law in some countries, so it’s a good idea to check ahead of time. Commodities like live animals, diamonds, tobacco, artwork, medication, and bullion all have restrictions on them in some parts of the world. For some carriers, it’s not worth the extra time or energy to carry cargo like that.
The shipping rate is the cost of shipping products from your facility to the destination. The price you pay for this service depends on a variety of factors that are specific to your shipment. The main determining factors are:
All those factors combined will determine your rate, but shippers like loyalty. If you ship with them often then rates can be negotiable, and the price you pay can fluctuate. Shippers will also bring down the price if you are shipping directly and they don’t have to handle your cargo.
There are additional costs to watch out for aside from the normal shipping rates. Accessorial charges are levied when you need additional services. Any extra action that a carrier has to take when delivering your load other than transport it and deliver it could incur additional charges. For example, if the destination doesn’t have a loading dock for easy unloading, a lift gate truck might be necessary. A lift gate truck is a special type of truck that has a lift on the back of it to get cargo and pallets off. This is a special service that costs extra. If drivers have to handle cash, diversion miles, additional stops, or increased wait time, you can expect to have additional charges tacked on.
Freight classification is meant to establish a fair measure to standardize freight pricing. The National Motor Freight Traffic Association (NMFTA) sets the classification criteria for the country. The factors used for freight classification are the liability associated with the freight, meaning its value, how easy the cargo is to handle, the density of the freight, and the storability or durability of it. Trucking companies should be able to tell you how your freight is classified. By giving them the dimensions, weight, and description of your cargo, they will know how to classify it. It’s important to get that right because it has a direct effect on the cost of shipping. If you classify your freight wrong the shipping company will correct it and charge accordingly, and that’s usually an added expense.
Among the essential questions you should ask your LTL provider, this is an important one. Not every shipping company is willing to ship hazardous materials. There are special certifications that the trailer, truck, company, and driver must have in order to drive haz-mat. Special placards are placed on the outside of the trailer to indicate what is on board as well as it’s a tightly regulated part of the business. Some companies won’t ship things that aren’t on the official haz-mat list, but they still feel it poses a threat. You might have to complete an approval process so the shipper can get a good idea of what exactly they might be shipping.
The bill of lading (BOL) is a legal document between you, the consignee, and the shipper. It records the type and quantity of goods that are being shipped. The shipper signs the document and the receiver signs it once they take possession of the cargo. The BOL has the consignee’s name and address, the destination name and address, freight classification, weight, and size. Once the shipping company signs the BOL and takes the cargo, they are now legally responsible for it and anything that happens to the freight while in their possession is their responsibility. The bill is in place to prevent theft and clearly define who is owns the goods at every point of the shipment.
Diversified Transportation Services is your one-stop-shop for LTL, International, and expedited freight carriers. Contact us today to get your shipment moving.
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