The 2:00 Minute Warning

Things are changing in the LTL marketplace. With the forthcoming changes in the National Motor Freight Classification in July 2025, and LTL carriers utilizing density based pricing, it is important to understand how these changes could potentially impact your freight costs and budgets. 

 
So if you’re an LTL shipper, we encourage you to join us for a LTL webinar we’re hosting on January 9th at 11am Central with our friends from the NITL and CSCMP. 

The webinar will highlight items shippers should be watching as LTL carriers move to density based pricing and how these changes could affect your operations and LTL shipping processes. For example, with the changes in the LTL classification system, the Pounds per Cubic Foot (PCF) factor will have a significant impact on the pricing structures of LTL carriers. 

Here are some key points that should be on your radar screen if you want to be able to manage your LTL freight costs: 
   
First, how you configure your LTL pallets is very important.

Why is pallet configuration important? As we mentioned in last week's Two Minute Warning, the weight of your pallet will have an impact on the pounds per cubic foot, and as noted above in a density based pricing world, the pounds per cubic foot is extremely important. The carriers want to maximize the revenue with each and every pallet.

If you are a shipper that doesn't know the dimensions of the freight / pallets being put on a truck, you could be in for some surprises. Absent from knowing the dimensions of pallets, shippers could be in a position of having to "guess" at what the actual freight charges will be. And if there is an unfavorable variance between what a shipper thought they were going to be charged and what they end up paying, it could affect their bottom line profitability. 
 
Second, how detailed and accurate are your Bills of Ladings?  

In our conversations with the LTL carriers, one of their most frequent complaints is that all too often, shippers are giving them inaccurate bills of lading. To be blunt, some of these BOL's are garbage since they don't accurately describe the material being shipped. This results in misclassifications, plus a lot of extra effort for the carriers and shippers. Make sure your bills of lading don’t create waste! To get more accurate and better pricing, it is important to have BOL's that accurately describe the products being shipped, the weight of those products and if at all possible, the dimensions of the freight being put on the trailer. 
 
Third, how will your company deal with the variability in your LTL pricing? 

When companies are shipping freight to their customers on a prepaid and add basis, here is what could happen.  A shipper thinks they’re going to pay X amount to ship something (e.g. $250). But when the freight bill arrives, they find out it's Y amount (e.g.$300) because the PCF factor is higher than they thought and this results in a higher freight classification. If there are a lot of shipments where the Y amount exceeds the X amount, you could find yourself having to explain why freight costs are going up and having to eat the difference between the projected and actual freight charges. And that’s just one area where variability could cause issues.

Fortunately, TranzAct has tested solutions that can help shippers protect and manage their freight costs. So, make plans to join us for the LTL webinar on January 9, 2025 as our resources share ways to protect your LTL costs in 2025.

In the meantime, if you’re looking for strategies to reduce your LTL freight costs, simply give us a call, send me an email, or lets get together on Calendly. We're here to help.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT

CONNECT ON LINKEDIN

LET'S TALK! BOOK TIME WITH ME