The NMFTA, otherwise known as the National Motor Freight Tariff Association, has, for as long as I can remember, overseen setting up classifications and ratings for all LTL shippers and carriers. All LTL carriers participate with the NMFTA and are governed by its rules for packaging, classifications and commodity descriptions.

Recently, they have decided to completely overhaul the current classification system and go to a strictly density-based format. This means that instead of classifying your freight based on a commodity description alone, you will be forced to classify based on the shipment’s density rating.

There will be 13 density categories. This should greatly simplify the process of getting a rate for your shipment. However, it will also probably change how you calculate your shipments’ dimensions and weights. For example, let’s say you currently are in the process of shipping 5 pallets. Four are identical, the last one is shy several cases. To calculate density, you need the EXACT dimensions and the EXACT weight of the product and the skids that the product is being shipped on. This may represent a problem for many shippers because they currently just put a weight on the Bill of Lading, that is the estimated carton weight times the number of cartons being shipped, plus a bump for the number of pallets used. In the example above, if you normally have 100 cases on 5 pallets (20 per pallet) and each case weighs approximately 15 lbs. then your shipping weight would be 100 cases  x 15 lbs or 1500lbs + 5 x 50lbs (normal weight of a pallet)=250lbs for a total of 1,750lbs. Additionally, you need to know your classification for the product being shipped. This classification runs anywhere from 50 to 500 options and determines the price of the shipment. The higher the class, the higher the cost to ship. Previously, class was determined by the amalgamation of 4 key factors: Stowability, Liability, Handling, and Density. The NMFTA is dropping the other 3 characteristics and just using Density to determine a shipments class. Stowability refers to the product’s ability to be loaded in with and around other products. For example, if a product had no flat surfaces or couldn’t be loaded on top of anything, or other product couldn’t be loaded on top of it, then the stowability factor would result in a higher classification. Second is Liability. If a product is extremely prone to damage or could potentially damage other products then it will likely pull a higher classification rating. Third, Handling characteristics are important. The ease or difficulty in moving and loading products factors into their class rating. Density is not new to determining LTL classification levels. There are currently many items that move under “density-based” rates. Density is determined by multiplying the length times the height times the width of the loaded pallet in inches. Divide this total by 1728 to get cubic feet (volume), then divide this calculated amount into the weight of each handling unit. For example, if you have a pallet-load that weighs 300lbs (incudes weight of pallet) and is 48”x40”x50” high, then the volume in cubic inches is (48x40x50). Then dividing this amount (96,000) by1728 gives you 55.56 cubic feet. The density would then be calculated by dividing the weight (300lbs) by the volume (55.56 cubic ft) or 300 / 55.56 which gives you a density of 5.4 lbs. per cubic ft. If you have 4 other identical pallet loads, then the density would be the same. However, if you have one that is lighter and has different dims than the others you would have to calculate the individual cube for that pallet then add up the total cubic feet and then divide that number into the total weight of the shipment (once again including the weight of the pallets).

Once you have established the density you can go to the density chart for the applicable class rating tied to each of the 13 density levels and find which one applies to you. This process overall is both easier and harder at the same time. Here are some issues with the new direction that the NMFTA is taking.   If you are a shipper with routine commodities that always weigh the same and have the same cube, then you are just going through a math exercise at your desk. However, if your product cube shifts with each shipment, you are going to have to painstakingly measure and weigh each pallet to determine its density factor before applying the rates. Many shippers do not have the means or capability to measure and weight their LTL freight. This could end up being a big problem for them on several fronts. First if they guess, then the carrier is going to weigh and measure their shipments back at the terminal. This will result in some or all the following happening:

1. Higher weights than noted on BOL, higher weights mean higher cost.
2. Different density than shipper acknowledged, which most likely would result in a higher class thus higher costs.
3. Assessorial Charge for the re-weigh process by the carrier, which adds to the total bill.
4. Potentially higher classification rating and subsequent price point for the shipment.
5. Different invoice amount than shipper was quoted on front end or that was quoted to the shipper’s customer.
6. Margin Loss by shipper due to mis-quote with their customer, or bad feeling between them if customer gets higher freight bill than was quoted.
7. Damaged relationship with carrier due to these types of discrepancies, even though carrier is doing their job correctly.
8. Slower cash flow due to expended payment cycles because of the back and forth between AR and Ap groups to finalize payment

Until the dust settles on this change, the carrier, the shippers, their customers and the 3 PL’s are all going to spend more time and must do things differently than in the past. Change is not a welcome thing in the logistics business, so this will not go over extremely well on any side involved. On top of that there exists a strong possibility that shippers’ freight costs if anything goes up not down from previous levels.

These changes are slated to start hitting sometime in the first quarter of 2025. If you need to consult someone that can help you better understand how and to what degree these changes will impact your business, you can reach out to me at Riverside Logistics. Jim Durfee, 804-729-8180 or . I’m happy to help!