CLASSIFICATION CHANGES THAT CAN AFFECT YOUR FREIGHT COSTS

To keep up with the shifts in the LTL industry, The National Motor Freight Traffic Association (NMFTA) releases occasional updates to its commoditization standard. Effective August 5th, 2017, NMFTA is going to place the below changes in the National Motor Freight Classification (NMFC):

• Changes to all full-scale density classifications.
o The class assigned to the 4 but less than 6 pcf density interval is adjusted from 150 to 175.
o Many full-scale density classifications in the NMFC are also amended to provide the 11-subprovision density/class progression.

What does this mean for your shipping costs? The most significant change will happen to companies that ship density based products. For example, plastic articles are a common low-density item. If your product regularly falls between 4-6pcf, instead of being rated at class 150, it will be class 175.

Another huge impact of this change might not be as apparent. Most first tier FAK’s [freight all kinds] only go up to 150 so if a commodity subject to a density progression has a density of at least 4.0 PCF [pounds per cubic foot], the class rate can change from actual class 250 to FAK 50. When this new proposal goes into effect on August 5, 2017 any commodity with a PCF of 4-6 PCF will be rated at actual class 175 and they won’t get their FAK.

It has been clear for quite some time now that the LTL [less-than-truckload] carriers are moving away from commodity classifications based solely on the description of a product and applying more stringent classification ratings based on the actual density of a commodity being shipped. Shippers whose products are subject to density ratings and therefore subject to item 170 provisions must record the “actual density” or dimensions of the product being shipped. If they do not, and the shipment is “inadvertently accepted”, item 170 allows the carrier to charge the rate for the lowest density provided, meaning the highest rated classification. Unless the shipper can submit “satisfactory proof” of a higher actual density, only then will the freight charges be adjusted to the proper level.

If you have any questions about how the new classification update will affect the cost of your company’s freight shipping, don’t hesitate to reach out to our domestic shipping department at info@pnglc.com or contact us at (717) 626-1107 ext. 1.