LTL shipping costs are changing with a trucking classification overhaul coming this summer. Late last year, the NMFTA announced a new LTL (less-than-truckload) freight classification system beginning July 19th. NMFTA’s COO, Joe Oht, describes the new system as “the biggest change in classification in the history of classification.” The reason was the complaints that the original NMFC system was getting because it was too confusing and complex. Shippers, carriers, and brokers believe these adjustments will positively impact domestic shipping by providing transparency. This article will explain how changes impact shipment costs and what they will mean for shippers.
How LTL Shipping Costs Are Changing
The most significant change between the old and new systems is that the classification will depend on the shipment’s density. Currently, categorization depends on four characteristics, including density, handling, liability, and storability. Due to this, the model was difficult to interpret and led to disagreements between shippers and carriers. The new model will be more direct, focusing more on density by considering weight and dimensions. Freight classes in the current model will go from 11 to 13 classes. Shippers with heavy and dense freight could reduce their rates by moving them to a lower class. Once the NMFTA updates the system, various shipments will become less expensive, remain the same, or become more costly.
In particular, costs for less dense shipments will rise and be in new classes. Some changes may include:
- Density from zero to one pound per cubic foot, having a cost increase of 97%.
- Density from one to two pounds per cubic foot, having a cost increase of 49%
- Density from two to four pounds per cubic foot, having a cost increase of 24%
Costs for more dense shipments will decrease. Specifically, the cost of shipments between four and six pounds per cubic foot and heavier than eight pounds per cubic foot will see a cost decrease. This classification change will benefit industrial truckers that ship typically denser freight. The cost of shipments with densities between six to eight pounds per cubic foot will remain the same.
What Can This Mean For The Shipper?
While many shippers and brokers believe those changes will benefit domestic shipping, higher costs may impact others. Goods that take up space but weigh less, like pillows and light toys, will see the highest cost increases. It may be vital to check ahead by talking to a broker, carrier, or third-party logistics provider before starting. Despite the potential higher prices, the likelihood of it happening could decrease with the new system. Transparency in pricing will also lessen disputes between shippers and carriers and prevent potential supply chain disruptions.
Regardless if the changes positively or negatively affect your goods, they should not stop your supply chain. However, the shipper should take the proper steps to mitigate potential disruptions. Speaking to a freight broker to see how the new classification system will impact your shipment is ideal. Brokers are the middleman between shippers and carriers and coordinate cargo movement domestically. They are also connected to a carrier network and can find the best rates to transport your cargo. Reach A1 Freight Solutions at 786-375-9420 or info@a1wwl.com to speak to a broker regarding your supply chain’s success.