Freight Class Changes Went Into Effect in August…Is Your Organization Ready?

Okay, so this topic may not start out as the most interesting read, but bear with me…it contains important information if you ship via LTL, or if you just want to understand LTL a little better.

The National Motor Freight Classification® (NMFC®) is the standard guide used to classify commodities being shipped via LTL, which, in turn, determines the applicable rate and charges. There are 18 different classes ranging from class 50 to 500. The higher the freight class, the higher the freight charges. But how does the freight class get assigned?

The Commodity Classification Standards Board (CCSB) is the entity responsible for maintaining the commodity descriptions, classes, rules, and other items relevant to the classification of items in the NMFC. They utilize several characteristics of the commodity when determining class. Some factors include the ease of handling and stowability. Is the product oddly shaped, hazardous, or fragile? Is it extremely long, heavy, or have a stacking restriction? If so, those would be factors that may necessitate a higher freight class be given to a commodity.

Liability is another factor that is considered. Items that have an increased risk of theft, are perishable, easily damaged, or have a high value will likely have a higher class.

Lastly, density is considered. Some commodities are given a single freight class. However, some commodities could be assigned density-based classes if the commodity isn’t fairly represented by a single average density. If an item is subject to density, it could have a few ranges or be based on a full density scale, which was typically represented by 9 different classes based on the pounds per cubic foot (PCF) of the shipment. However, an 11-class scale was implemented in 2014. And to answer the question you may now be thinking of…Yes, this means the freight class can be different on shipments of the same commodity because the PCF is different from one shipment to the next.

Now, here is where things get interesting. The CCSB makes revisions to the NMFC annually for the addition of new commodities or to amend existing classifications. Many items remain the same freight class for years, but could be altered to a different class or become density-based. There are several items, such as the prevalent Plastic Articles category – NMFC 156600, that just changed in August to the full density scale based on 11 different classes. What does this mean? Well, shipments of the commodities in question with a PCF of 22.5 to 30 will rate at class 65 instead of 70. Shipments of those commodities with a PCF of 30 or greater will rate as class 60 instead of 70. Great news, right? Well, it’s not all good news. Those with a PCF between 4 and 6 will now rate at class 175 instead of 150.

The true impact of this change will depend on the typical size of the orders being shipped. For one company, this may reduce your freight expenses, while others will see charges increase.

A change in freight class means systemic, procedural, and, perhaps, contractual changes are needed. If your organization needs assistance in evaluating the impact, or with management of this change, please contact C&C Logistics Consulting. You can visit us at http://www.cclccorp.com.

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