LTL Freight Shipping Guide

Resources

Helpful Information for LTL Shipping

The rules and regulations of LTL shipping can sometimes seem overwhelming, even to the most seasoned shipper. After all, there’s much to understand to keep things running efficiently. For instance, you need to know how your product is defined by the trucking industry (referred to as the product or freight’s NMFC), how to properly prepare your shipping documentation and how the freight should be properly packaged or bundled. You’ll also want to evaluate carriers and the variety of options that are available to you for getting your freight to its final destination as quickly, reliably and cost effective as possible.

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The NMFC

When it comes to getting your products to your customer, one of the first things you need to consider is how your product is defined by the trucking industry. In the world of LTL shipping, different types of products – from steel bolts to auto parts to blenders – are defined according to their makeup. Each product definition is called a classification. The class of your freight plays a prominent role in calculating the freight charge for transporting the shipment.

How are freight classes determined? The many classes of freight are catalogued in the National Motor Freight Classification tariff, commonly referred to as the NMFC. The NMFC is a publication for motor carriers containing rules, descriptions, and ratings of commodities moving in commerce. The publication is used to classify freight for billing and rating purposes.

Besides defining the classes of shipping commodities, the NMFC also assigns item numbers to each type of commodity. The item number is related not only to the commodity itself, but to the material from which the commodity is made, its packaging, and other factors and considerations. Item numbers are associated with rates as well as commodity classifications. With page after page of item numbers, commodity descriptions, and freight classes, the NMFC is an excellent reference for the transportation professional. They also offer an online version called ClassIT. The book also describes shippers’ responsibilities, as well as many of the responsibilities of LTL carriers.

NMFC Tariff & Rule Book

List of participating carriers

Descriptions of commodities

Commodity classes/numbers

NMFC Tariff & Rule Book

Rules for shippers

Packaging requirements

Rules for freight loss/damage claims

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Freight Classes

NMFC has 18 classes (50–500). Density-rated freight uses a 13-tier scale mapping to classes 50–400.

What do all these different freight classes mean? Several elements, including density and value, determine the freight classification of a commodity. Very low-density freight rates are higher because trailers cube out before they weigh out. Under today’s density scale, anything under 1 lb/ft³ maps to class 400. Some commodities can still be assigned class 500 by item-specific NMFC provisions (not by density alone).

Even with low-density freight, there are ways to reduce your freight charges—for example, by accepting a released value. Looking at another example from the NMFC: stating a released value on the bill of lading can reduce the applicable class (e.g., an item rated class 85 may be reduced to class 70 when shipped at a specified released value), which lowers the rate per hundredweight while limiting carrier liability to that released value per pound.

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How Freight Rates are Calculated

Freight Rate Factors

Distance the shipment is moving

Shipment's weight

Density of the commodity

Freight Rate Factors

Commodity's susceptibility to damage

Commodity's value

Commodity's handling characteristics

NMFC defines eighteen freight classes (50–500). Density-rated freight now uses a 13-tier density scale that maps to classes 50–400. Item-specific rules can still assign other classes (including 500). Most LTL rates are expressed per hundred pounds (CWT). Rates are structured so that as the weight of your shipment increases, the rate per hundred pounds decreases—even though total charges can still be higher for heavier shipments. Most LTL carriers also state a minimum charge for very light shipments.

Example note: the matrix below is sample data only. Your density-rated freight will fall into one of the 13 tiers (50–400); actual rates vary by carrier, lanes, tariffs, and discounts.

Class	L5C	5C	1M	2M	5M	10M	>20M
50	34.30	28.32	24.25	23.04	17.58	15.74	10.47
55	36.94	30.50	26.12	24.82	18.93	17.41	11.58
60	39.59	32.69	27.99	26.60	20.29	19.08	12.69
65	41.94	34.64	29.66	28.18	21.49	20.27	13.48
70	44.64	36.86	31.56	29.99	22.88	21.94	14.59
85	51.90	42.86	36.70	34.87	26.60	26.24	17.45
92.5	55.89	46.15	39.52	37.56	28.64	28.38	18.87
100	60.27	49.77	42.61	40.50	30.89	30.77	20.46
125	65.30	54.00	46.20	43.80	33.40	32.90	21.80
175	75.50	62.40	53.30	50.50	38.50	37.90	25.10
250	95.00	78.50	67.00	63.50	48.40	47.70	31.60
300	110.00	90.80	77.40	73.30	55.80	54.90	36.40
400	140.00	115.50	98.40	93.20	71.00	69.90	46.40

Note in the sample freight matrix how the freight rates increase as the class goes up. Also note how the freight rates decrease as the weight break increases. There is a similar freight rate table for every origin/destination zip code combination serviced by an LTL carrier.

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Before You Ship

No matter which LTL carrier you select to transport your goods, taking a few important steps before the driver arrives for pickup can keep business running smoothly:

1.	Prepare your packaging: Secure and proper packaging helps ensure trouble-free shipping. It also helps limit any possible damage from transloading the packaged freight. All goods should be protected with proper packaging in compliance with the NMFC. (For hints and examples, take a look at the examples under Preparing Your Package below.)
2.	Label every piece clearly and completely: Complete names and addresses on each piece are needed to ensure that packages in your shipment arrive intact. Label placement is important too. (For hints and examples, take a look at the examples under Proper Labeling below.)
3.	Complete a bill of lading: The bill of lading is a legal contract between the shipper or a 3rd Party Logistics Provider (3PL) and the carrier. It should state exactly what is being shipped, where it’s coming from and where it’s going to, etc. If using a 3PL, they will usually provide a system generated BOL for the shipper to use for the freight shipment.
4.	Select a carrier: Selection criteria are often based on the commodity you are shipping, the services the carrier can provide, where your shipment is going, the date by which the shipment should arrive, and the cost of these services. You must evaluate the options based on your company’s freight shipping needs.
5.	Place the order: Depending on the time of your order, most carriers can have a truck at your location that same day or usually the following day at the latest. The carrier or 3PL provider will probably ask where the shipment is going, how much it weighs, if it is ready to be picked up, how late the shipment can be picked up, and who is paying the charges. Hint: Place the order early in the day to increase your chances of a same day pickup.

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Preparing Your Package

Proper Packaging

Don’t ship your goods without proper packaging and protection. Many claims and freight damage arise from improper packaging — and packaging errors may eliminate the carrier’s liability. The sample picture should help you visualize how to best package and secure your goods.

When possible, heavy, bulky items should be placed on pallets for improved handling and care. 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. It’s best that the top surface is flat.

Proper Labeling

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 hazardous materials as specified by the DOT. Address markings should be located as shown in the examples below. The location shown indicates the top, a side, or an end. If more than one location is shown, you may choose which one to use.

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Bill of Lading

The bill of lading is an important document. It acts as a receipt for goods, a contract of carriage, and may act as a document of title (if order bill of lading). Take the time to make sure the bill of lading is filled out completely and correctly, since this will help ensure error-free delivery of the freight to its final destination. A correct bill of lading also ensures an accurate invoice for you.

Receiving Freight: Clear Delivery. What about when you’re on the other end of a freight shipment? Receiving freight can be as simple as sending it if you follow a few steps:

1.	Stay in contact with your supplier/shipper to find out when your shipment was shipped, what carrier it was given to, and an approximate arrival date.
2.	On arrival, inspect the shipment immediately for obvious signs of damage.
3.	Compare the actual number of handling units to the number listed on the delivery receipt.
4.	Sign the delivery receipt.
5.	The carrier’s driver will usually help you receive/unload your shipment and answer any questions you might have. While the driver is there, compare and count the pieces of freight you are receiving to that of the carrier’s freight bill. When you’ve determined that the condition and quantity of your freight is acceptable, the driver will ask you to sign the delivery receipt. The driver will provide you with a copy and will take the signed copy with him/her (as a delivery receipt) for the carrier’s record of the delivery.

When a carrier receives a signed delivery receipt with no exceptions or damages noted, it is called a “clear delivery.” Clear deliveries generally mean everything went smoothly: success for both the shipper and consignee of the freight.

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 carrier or 3PL provider. If you feel you have paid too much, contact your carrier and ask to file an overcharge claim. Note that carriers do charge for incorrect weights and classification of goods. Therefore it’s very important to state the correct weight and freight class when rating and shipping via LTL carrier in order to eliminate rate changes due to incorrect information.

If a shipment is either short or damaged, you should still accept the delivery but make clear notes of the short or damages on the delivery receipt. Make sure you receive a copy noting the short or damages. It’s the duty of the shipper and the consignee to mitigate the loss with the LTL carrier’s involvement. 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.

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Cargo Loss & Damage Claim

Required Documentation

The following information is REQUIRED. Claims received without proper support are subject to denial by the carrier or insurance company’s claims department.

Completed Redhawk Claim Form
Photos of the damage to the product
Photos of the shipment prior to being unpackaged at delivery, POD notating the damages, or other proof of carrier liability
If this was signed free & clear, the carrier will need an explanation of why the damages/loss was not documented at the time of delivery or reason for gap in reporting.
Original shipment invoice
Any applicable repair invoice
Any allowance for possible salvage
Invoices for applicable replacement shipments or parts and their corresponding shipping charges
If the item cannot be repaired or salvaged, a mitigation letter on company letterhead explaining why the freight cannot be repaired or salvaged

Per certificate valuation would be:

4. Valuation and Settlement:
4.1 Unless stated otherwise on the Declaration of Insurance, the following valuation will apply: Insured Goods under invoice shall be valued at the lesser of:
1. The Total Insured Value declared on the Declaration of Insurance;
2. The amount of the invoice including all charges therein plus any prepaid and/or advanced and/or guaranteed freight plus 10%;
3. The repair cost to include replacement parts of like kind and quality and expenses directly related to the repair, including labor, freight and forwarding charges necessary to return the repaired item to the owner or consignee.
4.3 It is understood and agreed that freight costs must be included in the Total Insured Value in order to be recoverable herein.