LESS THAN TRUCKLOAD SHIPMENTS
Less Than Truckload (LTL) carriers typically transport shipments that are under 10,000 pounds. Shipments from several different customers are consolidated onto one trailer.
The rules and regulations of interstate shipping can sometimes seem overwhelming in the deregulated environment we now live in. There is much to understand to keep things running smoothly.
For instance, you will need to know how your product is defined by the trucking industry, how to complete important shipping documentation properly, and the right ways to package and secure your freight. You will also want to evaluate the variety of options that are available to you for getting your freight to its destination as quickly and reliably as possible.
This simple guide to shipping and receiving was designed with you in mind to help you and the people at your business master a few of the more common rules, regulations, and practices that go along with successful shipping and receiving which can be crucial for businesses to survive. We are sure that you will find the information and tips useful.
NATIONAL MOTOR FREIGHT CLASSIFICATION BOOK
The National Motor Freight Classification (NMFC) is a publication for motor carriers that contain rules, descriptions, and ratings of all commodities moving in commerce. The publication is used to classify freight for rating purposes.
In the world of interstate shipping, different types of products are defined according to their makeup. Each product definition is called a classification. The class of your freight plays a prominent role in calculating how much your carrier will charge you for transporting it. Freight classes are catalogued in the National Motor Freight Classification tariff.
Less than truckload carriers are compensated on a price per hundred pound basis. The NMFC assigns one of eighteen (18) different classifications for each item shipped; ranging from class 50 (slab steel) to class 500 (ping pong balls). The classes and weight breaks are illustrated below. Rates are structured so that as the weight of your shipment increases, the price per hundred pounds decreases. For very light shipments, most less than truckload carriers will state a minimum charge for the service.
Historically, the pricing for all classes of freight was expressed as a percentage of the rate for class 100. As an example, freight assigned a classification of 70 would pay 70% of the price (per hundred pounds) for a class 100 rate. While this proportional relationship no longer reflects exact percentages, it does allow a comparison of the relative expense of shipping one product versus another.
There are four characteristics of every article of freight that are analyzed to determine the NMFC classification. In order of importance they are;
- DENSITY- Rates are expressed on a price per hundred pound basis so therefore the greater the density of a product the lower the price per hundred pounds will be.
- LIABILITY- The value of the product, susceptibility of theft, susceptibility to damage, and to damage other freight all come into play in determining the exposure to potential liability the carrier will incur in transporting this commodity.
- STOWABILITY- How freight stacks in a trailer. Carriers will load freight high and tight in a trailer to best facilitate the careful and safe movement of product. Freight that does not stack well can increase the chances of a freight claim.
- HANDLING EASE- How easy it is for a carrier to move product on and off trailers and across their shipping dock. Long, bulky freight will often times require special handling and result in increased costs.
Besides defining commodity classes, the NMFC also assigns item numbers to each type of commodity. The item number is related not only to the commodity itself, but to its; packaging, the material from which the commodity is made, and other considerations.
The NMFC is an excellent reference book for the transportation professional. It describes both shipper and carrier responsibilities. The NMFC includes:
- A list of carriers who participate in the NMFC
- Descriptions of each item/commodity
- Rules specifically for shippers
- Packaging requirements
- Rules of handling claims for loss and damage
BEFORE YOU SHIP YOUR PRODUCT
- Prepare your packaging- All goods should be protected with proper packaging in compliance with the NMFC.
- Label every piece clearly and completely- Complete names and addresses on each piece to ensure that your shipment will arrive intact.
- Complete a bill of lading- The bill of lading is a contract between the shipper and the carrier. It must state the name and address of both the shipper and the consignee, a description of the product being shipped, quantity, class and weight, who is paying the freight charges, along with any special instructions to the carrier.
- Select a carrier- Carriers are usually selected based on the goods you are shipping, the services you require, where your shipment is destined, the transit time required, and the costs associated with these services. Diversified Transportation Services will work with you to ensure that the carrier selected will be best suited to meet your needs.
- Place a pick up- Once you confirm your order, Diversified Transportation Services will schedule the pick up with the carrier. Most carriers will have a truck at your location the same day. The earlier you call, the more likely you are to get a same day pick up. Our dispatcher will ask you the same information on your bill of lading to ensure that the right equipment will arrive to handle your shipment.
THE BILL OF LADING
Your bill of lading is an important document. It is a contract and it acts as a receipt for goods being transported. Take the time to fill out the bill of lading completely and correctly, since this will help ensure error free delivery to your customer. A correct bill of lading will also help ensure that you are invoiced accurately for the services provided.
Diversified Transportation Services can provide bills of lading for you. They are available in the forms section on our web site and can also be obtained from either your sales representative or our operations department.
As a courtesy, our operations department can either fax or email a completed bill of lading for your shipment. Please review all bills of lading carefully for accuracy and modify them as needed before signing them in preparation of tendering the freight to the carrier. Diversified Transportation Services makes no representation as to the accuracy of the information prepared on the bill of lading. You will be responsible to confirm the accuracy of the information on the bill of lading before you release your shipment to the trucking company.
Correct paperwork saves money. Even minor changes a carrier must make to shipping documents may incur charges. Avoid these by being 100% correct on your bill of lading.
How a Freight Rate is Calculated: How Much Will it Cost?
Freight rates are based on many factors, including:
- The distance the shipment is moving
- The shipment’s weight
- The shipment’s density
- The commodity’s susceptibility to damage
- The value of the commodity
- The commodity’s ability to be loaded and handling characteristics
The sample rate matrix below illustrates how a carrier’s rate table might look for rates between two zip codes. Weight breaks are indicated across the top. The classes are listed down the left side.
Sample Matrix of Weight Break and Freight Class
Note in the sample matrix how the rates increase as the class goes up. Also note how the rates decrease as the weight break increases. There is a similar rate table for every origin/designation zip code combination serviced by a carrier. (C = 100 pounds, M = 1000 pounds)
Avoid billing corrections. Contact your representative to discuss the NMFC and your product’s classification.
Preparing Your Package
Proper packaging is a must. Don’t ship your goods without proper protection. Many claims and damages arise from improper packaging — and packaging errors may eliminate or reduce your carrier’s liability.
The pictures below should help you visualize the best way to package and secure your goods.
When possible, heavy, bulky items should be placed on pallets for improved handling. To maximize carton strength, stack cartons on the pallet vertically. You can secure cartons to a pallet with banding, shrink-wrap, stretch-wrap, or breakaway adhesive.
Cartons should be stacked squarely on the skid, with no overhang. Box flaps and corrugations should face up. Make the top surface as flat as possible.
Stacking strength is lost when pallets are improperly loaded
Damage can occur if cartons overhang the pallet, because there is no support for the freight in transit.
Damage can occur when a pallet doesn’t have a flat top surface. Place single containers on an outside corner or ship them loose.
Loads made from different size containers may not be uniform enough to have unit strength.
Pallet overhang loses up to 32% of carton strength.
Interlocked pattern loses up to 50% of carton strength.
Misalignment loses up to 30% of carton strength.
Save money. If you ship many small shipments consolidate them. Try banding or stretch wrapping them onto a pallet. Your cost per hundred weight (CWT) will generally go down.
Shipping labels must be placed on every piece of your shipment. The shipper and consignee information must match the bill of lading information exactly, and your labels must be legible and complete.
Ideally, you should place labels securely on both the long and short sides of each piece. DOT hazardous material labels are required when shipping DOT hazardous materials.
Unless specifically provided for elsewhere in the NMFC, address markings must be located approximately as shown in the following examples. The location shown indicates the top, a side, or an end. If more than one location is shown, you may choose which to use.
Receiving Freight: Clear Delivery
Receiving freight can be as easy as sending it if you follow a few steps:
- Stay in contact with your supplier to find out when your shipment was shipped, what carrier it was given to, and an approximate arrival date.
- When the shipment is delivered, inspect it immediately for obvious signs of damage.
- Compare the number of shipping units received to the number listed on the delivery receipt.
- Sign the delivery receipt. Be sure to make note of any and all signs of possible damage as well as the number of pieces you are revieving.
The driver will help you receive your shipment and answer your questions.
While the driver is there, compare the pieces of freight you are receiving to the delivery receipt. If condition and quantity of your freight is acceptable, the driver will ask you to sign the delivery receipt. The driver will give you a copy, and take the original signed copy with him/her (as proof of delivery) for his/her employer’s records.
A signed delivery receipt with no exceptions, is called a “clear delivery.” Clear deliveries mean that there were no shortages or visible damage at the time of delivery.
An invoice for the shipment will be sent to the appropriate party soon after pickup or delivery has been made, depending on whether the shipment is prepaid or collect. Questions regarding the amounts shown on the bill should be directed to your sales representative.
If a shipment is either short or damaged, you should still accept the delivery, but you MUST CLEARLY WRITE THE SHORTAGE OR DAMAGE ON THE DELIVERY RECEIPT. It’s the duty of the shipper and the consignee to mitigate or minimize the extent of the loss. After you accept the shipment, take steps to protect the shipment from further loss and file a claim for the actual shortages or damages involved promptly.
Eliminate extra charges. Be ready to accept the shipment when the carrier comes. Most carriers will add a “second delivery” charge if they must make another trip to your business.
Claims and Exceptions
Although carriers strive to make sure every shipment arrives intact and undamaged, problems do occur. If all or part of your shipment is lost or damaged, contact your carrier to file a claim.
All claims (damage and shortage) must be filed within nine months of delivery. After nine months, the carrier cannot accept liability. If an entire shipment is lost and never delivered, the claim must be filed within nine months after the shipment should be reasonably delivered.
Concealed damage claims must be brought to the attention of the 3PL and carrier within 5 days of the date of the delivery. Failure to do this will mean that you accept the goods in the condition that they were received.
Don’t delay shipments at the border with improper documentation. Shipments originating in Canada are subject to Canadian bill of lading contract terms and conditions. Contact your carrier’s representative for more details.
Emergencies happen. From time to time, you may find yourself up against a delivery date that just can’t be missed. Perhaps a factory needs parts in a hurry to avoid production delays. Or maybe your customer is a just-in-time manufacturer for whom tight control of inventory movement is essential.
For shipments like this, Diversified Transportation Services has a solution. Contact us to find the right service that matches your time-sensitive needs.
Save money. If it doesn’t need to be there the next day, don’t ship it overnight! In other words, whether you are the shipper or the consignee, communicate with your customer or supplier to make sure you both understand the shipping requirements.
Easy Access to Critical Information
Diversified Transportation Services puts customer service at your fingertips! Just call us or log on to get rate quotes, keep track of your shipments, and more.
The Shipper’s Info can show you how to:
- Get service routing information and facility phone numbers
- Inquire on the status of a cargo claim
- Get up-to-date news highlights from Diversified Transportation Services and the trucking industry
- Request proofs of delivery by PRO number
- And more!
If you need more specific information or have questions about the topics covered in this guide, your local Diversified Transportation Services customer service representative will be happy to help you. Call any time to talk to one of our courteous, knowledgeable transportation professionals!
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