Freight class is a standardized classification system used in the shipping industry to categorize commodities for transport. This system, developed by the National Motor Freight Traffic Association (NMFTA), is crucial for determining shipping costs. It is based on four factors: density, stowability, handling, and liability.
Understanding freight class is essential for anyone involved in shipping, warehousing, and logistics. It affects the cost of shipping, the handling of goods, and the insurance coverage for those goods. It is a complex system, but with a thorough understanding, it can be used to optimize shipping processes and costs.
History of Freight Class
The freight class system was developed in the early 20th century by the NMFTA, a nonprofit organization that represents interstate, intrastate, and international motor carriers. The system was created to standardize freight pricing across the industry, making it easier for shippers and carriers to negotiate rates.
Over the years, the system has been refined and updated to reflect changes in the shipping industry. Today, it is used by carriers, shippers, and third-party logistics providers across North America and is recognized internationally.
Development of the NMFC
The National Motor Freight Classification (NMFC) is the official publication of the NMFTA that contains the freight class system. It was first published in 1936 and has been updated regularly since then. The NMFC is a comprehensive guide to shipping, providing detailed descriptions of all commodities, rules for their transportation, and their assigned freight classes.
The NMFC is updated by the Commodity Classification Standards Board (CCSB), a committee within the NMFTA. The CCSB meets regularly to review and update the NMFC, ensuring it remains relevant and accurate.
Understanding Freight Class
Freight class is determined by four factors: density, stowability, handling, and liability. Each of these factors is considered when assigning a freight class to a commodity.
Density is the weight of the item in relation to its size. Stowability refers to how easily the item can be loaded and unloaded, as well as its compatibility with other freight. Handling involves the ease or difficulty of handling the item. Liability includes factors such as the likelihood of theft, damage, or spoilage, as well as the cost of the item.
Density is calculated by dividing the weight of the item by its volume in cubic feet. The higher the density, the lower the freight class, and consequently, the lower the shipping cost. This is because high-density items take up less space relative to their weight, making them more efficient to transport.
For example, a pallet of bricks has a high density and would be assigned a low freight class, while a pallet of ping pong balls has a low density and would be assigned a high freight class. The bricks are more efficient to transport because they take up less space relative to their weight.
Stowability refers to how easily an item can be loaded and unloaded, as well as its compatibility with other freight. Items that are easy to stow, such as boxes or pallets, are assigned lower freight classes. Items that are difficult to stow, such as irregularly shaped items or hazardous materials, are assigned higher freight classes.
Compatibility with other freight is also a factor in stowability. Items that can be safely and efficiently loaded with other freight are assigned lower freight classes. Items that require special handling or isolation from other freight are assigned higher freight classes.
Freight Class Categories
The NMFC contains 18 freight classes, ranging from class 50 to class 500. Each class represents a range of densities, with class 50 representing the highest density and class 500 representing the lowest density.
Each freight class also takes into account the other factors of stowability, handling, and liability. For example, a high-density item with a high liability, such as a valuable piece of machinery, may be assigned a higher freight class than its density alone would suggest.
Class 50 is the lowest freight class and represents the highest density. Items in this class typically weigh over 50 pounds per cubic foot. Examples of items in this class include bricks, cement, hardwood flooring, and cast iron pipes.
Because of their high density, items in class 50 are efficient to transport and therefore have the lowest shipping costs. However, they may also have high liability due to their weight and potential for damage.
Class 500 is the highest freight class and represents the lowest density. Items in this class typically weigh less than 1 pound per cubic foot. Examples of items in this class include ping pong balls, feathers, and stuffed animals.
Because of their low density, items in class 500 are inefficient to transport and therefore have the highest shipping costs. However, they typically have low liability due to their low value and low risk of damage.
Impact of Freight Class on Shipping Costs
The freight class of an item has a direct impact on its shipping cost. The higher the freight class, the higher the shipping cost. This is because higher freight classes represent lower densities and higher liabilities, making them more costly to transport.
However, the freight class is not the only factor that determines shipping cost. Other factors include the distance of the shipment, the mode of transportation, and the service level (such as expedited or guaranteed delivery).
Distance and Mode of Transportation
The distance of the shipment is a major factor in shipping cost. The further the shipment, the higher the cost. This is because longer distances require more fuel, more wear and tear on the vehicle, and more time for the driver.
The mode of transportation also affects shipping cost. For example, air freight is typically more expensive than ground freight, but it is also faster. Sea freight is typically the least expensive mode of transportation, but it is also the slowest and may require additional costs for port fees and customs clearance.
The service level of the shipment is another factor in shipping cost. Expedited or guaranteed delivery services are typically more expensive than standard delivery services. This is because they require additional resources, such as extra drivers or vehicles, to meet the delivery deadline.
However, these services can be worth the extra cost for time-sensitive shipments or for shipments of high-value items that require special handling or insurance coverage.
Freight class is a complex system, but it is crucial for anyone involved in shipping, warehousing, and logistics to understand. By understanding freight class, shippers and carriers can optimize their shipping processes and costs, and ensure their goods are transported safely and efficiently.
While the freight class system may seem daunting at first, with a thorough understanding, it becomes a valuable tool for navigating the shipping industry. Whether you are a shipper, a carrier, or a third-party logistics provider, understanding freight class can help you make informed decisions and optimize your operations.