Managing your supply chain cost requires efficient transportation management practices. One of the most common way to see your freights costs get out of hand is reclassification and reweighing of your freight. This may be difficult to achieve as LTL shipping can be nuanced with different invoice adjustments including accessorials, delays, and damaged freight. By law, carriers can inspect your shipment so it is important to understand what you can do to avoid reclassifications and reweighs.
What is freight classification?
Different freight classes were created by the National Motor Freight Traffic Association (NMFTA) to get a common standardized freight pricing for a shipment working between different carriers, warehouses, and brokers. There are 18 categories that are based on weight, length, ease of handling, stow ability, and value of goods. When a transportation company wants to classify a shipment, they must identify the NMFC code and calculate their freight.
What is a reweigh?
When a shipper transports goods, the costs are determined by the gross weight and the dimensional shipment weight. Dimensional weight is calculated by multiplying length, width, and height in inches divided by the DIM factor. Usually the whichever the greater weight (gross vs. dimensional) will determine the cost. Reweighs are a very common day to day occurrence and usually come with a fee so being proactive before the shipment leaves is important.
Why do so many shippers get classification wrong?
Many shippers decide to identify their class first instead of figuring out the NMFC code which will give them an accurate freight classification. Many shippers do not understand these codes and simply just “get it done” which leads to higher fees once the carriers inspect the shipment.
How to avoid freight classification errors
Understand your freight classes. The NMFC is can be confusing and is constantly updating its system so staying up to date with the current rules and laws. LTL freight is commonly classified incorrectly because of its nuance especially if you run into commodities which can be assigned Freight All Kinds (FAK) meaning that multiple classes of freight are grouped together creating cheaper and streamlined process.
Utilize a technology that can automate data entry, integrate with ERP systems, and reduce human errors. Technology also allows for visibility of reclassification or reweighs, and you can use that data to diagnose and fix the root issue to why that might be happening.
Create an auditing process for your freight bills to ensure that there is no misclassified freight. Sometimes they are not always obvious and can require the extensive knowledge and experience of a logistics expert.
Outsource your freight to a third-party logistics provider. 3PL’s specialize in finding and preventing freight errors and they can quickly compare quotes from multiple carriers while at the same time provide visibility of a shipment status.
How to avoid reweighs
Be sure that you have included the pallet weight in your gross weight that is reflected on your Bill of Lading (BOL) and they should be accurate not estimations. Keep manufacturer specifications on hand in case of any shipment weight disputes. A freight calculator can help assist you with this.
Efficiently managing freight costs is very important in keeping your bottom line in check. The best way to avoid reclassification and reweighs is to do your homework on NMFTA changes and making sure you understand the classification and weighing process so that you do not incur additional charges on your freight. 3PL’s offer solutions to improve cost savings and efficiencies. They have experts available and dedicated to assist shipper’s classification, freight bill audits, and understand NMFC codes.
MVP Logistics is your 3PL logistics partner for supply chain project management, logistics, warehousing and fulfillment, LTL, and other supply chain needs. Our Minneapolis, Houston, and Los Angeles area warehouses provides local, national, and international shipping services. Find your solution today.