How to Classify Freight: You Can’t Afford to Get It Wrong

Charles Miller

02 April 2018

Don’t overlook the need to accurately classify freight. Here are 3 tips for getting it right.

Freight classification is a major factor in determining LTL shipping rates. It may sound basic, but the reality is that shippers misclassify their freight all the time. The result: they incur huge, unnecessary fees that drive up already high shipping costs.

Taking the time to properly classify freight is critical to eliminating unnecessary costs. In addition, proper freight classification supports good carrier relationships. The current capacity crunch makes these relationships more important than ever.

Here are some important details about what goes into calculating freight class— and our best tips for how to classify freight.

The backstory on freight class

Freight classes define shipping rates and standardize them throughout the shipping industry. National Motor Freight Traffic Association (NMFTA) publishes freight classifications in the National Motor Freight Classification (NMFC) book. With a range of 50-500, the 18 freight classes represent a wide range of commodities. You’ve got many classes to narrow in order to find the right one.

You can determine class through four factors.

  1. Density: Density is the primary factor for calculating freight class. You divide the weight of the freight (in pounds) by the volume (in cubic feet). As a general rule, dense freight is more efficient to ship.
  2. Ease of handling: The handling classification represents how easy or difficult it is to load your freight. If freight requires special care or cannot be loaded mechanically, it’s more difficult to handle.
  3. Storage capability: “Stowability” represents the level of difficulty presented by loading and transporting your freight. If your freight is poorly packaged, outside of standard pallet dimensions, or excessively heavy, this might present a serious challenge for LTL shipping, which requires frequent loading/offloading. Some delicate items or hazardous substances may not be shipped with other items.
  4. Liability and value: Liability is how susceptible your freight is to loss or damage, including damage to the surrounding freight in LTL shipping. Freight that is hazardous or perishable is classified based on liability.

3 tips for how to classify freight

1. Get it right the first time

One major freight classification problem is when shippers simply do not put in the effort to accurately classify freight. Incorrect or missing information on the BOL may not seem like a big deal, but the impact to costs and relationships is real.

Say you classify all of your shipments at 70 or 50, or don’t add the NMFC code. What’s the risk? An insufficient or inaccurate BOL puts you at risk for inspection and reclassification by the carrier of your freight.

So, your freight is reclassified — sounds easy enough. And maybe you’ve done it before, even regularly. But, really, the impacts are more far-reaching than you may expect.

Upfront, you can expect higher costs. You will see increased charges related to the new freight class. The carrier will add accessorial charges for freight inspection. And more subtly, yet more significantly, you are impacting your relationship with the carrier.

From a carrier’s perspective, reclassification changes the overall profitability of your freight. They have made business assumptions based on your BOL. Whether your errors and omissions are intentional or not, inaccurate information disrupts business.

Repeated reclassification will impact your relationship with the carrier. Misclassification creates uncertainty. As the time goes on, they may be reluctant to work with you. During a time of capacity crunch, maintaining good carrier relations is paramount. Correctly classifying freight is an important way to keep things running smoothly.

Be wary of any service that doesn’t go beyond a calculator. While density is the leading indicator of freight class, the other three factors are critical, too.

2. There’s no substitute for industry expertise

There are lots of “quick freight classification calculators” out there. Those are fine to give you a quick glimpse at your likely class. But be wary of any service that doesn’t go beyond a calculator. While density is the leading indicator of freight class, the other three factors are critical, too.

On-site evaluation of your freight is one of the best ways you make sure you have the most accurate classification. For factors beyond density, consider having an expert evaluate your freight. An in-person visit to take detailed measurements and photos will help an expert identify any considerations you might have overlooked. For example, an expert could identify packing efficiencies to increase density and save on costs.

Bottom line: class assignment may look like an easy mathematical calculation, but expert advice puts you ahead of the game.

3. Stay on top of changes

Density is the largest factor in freight classification. But the real variables are in stowability, handling, and liability. NMFC does not explicitly lay out these factors. As a result, NMFC constantly re-categorizes or even recreates them.

To properly classify your freight, you have to be on top of these changes. Immediately adjusting freight class in response to changes ensures that you are getting the most accurate pricing.

Technology provides an edge when you’re classifying your freight. For instance, our auditing process combines technology and industry expertise to capture classification changes. When invoices arrive, our TMS captures any freight reclassifications. Reclassifications are coded with the reason for the variance. Using data analytics, we monitor any patterns. If we see reclassifications occurring regularly, we update the NMFC code to ensure correct freight classification.

The long view

Freight classification isn’t a one-off exercise. We can say from experience that it pays to monitor your freight classifications.

Savings from proper classification are important, but so is taking the long view. Proper freight classification supports your partner relationships. Long term, taking the time to classify your freight correctly will help you get through the current capacity crunch and maintain great carrier relationships.

Charles Miller

Charles is the General Manager at Evans Transportation's headquarters.

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