Understanding LTL Carrier Rates

Seven things to understand about Less Than Truckload carrier rates:

Base Rates:  One of the challenges with purchasing less than truckload freight services is comparing the similarities and differences in costs between different carriers.  Every carrier determines their own base rates which will differ a great deal between carriers and shipping lanes.  A base rate is quoted per one hundred pounds often referred to as centum weight, CWT.  When determining the CWT it is important to understand what it is based on.  CWT takes into consideration the freight classification, the weight of the shipment, the distance travelled, as well as the origination and destination zip codes.

Classification of Freight:  The National Motor Freight Classification, NMFC publishes the different classifications or classes comparing commodities that are moving in interstate, intrastate and foreign commerce.  According to the NMFC there are eighteen different classes that range from fifty to five hundred and are based on the products density, ability to be stowed, handling and liability.  If the freight is a lower class it represents a low risk, dense shipment.  Higher class freight indicates freight that takes up a lot of space and is charged a higher rate.

Freight all Kinds: FAK is an agreement that enables multiple items with different classes to be shipped and billed at the same rate.  This agreement is made specifically between the carrier and customer.   This allows negotiations with the carrier to ship multiple commodities that range in class to ship at a specific rate.  Commodities range in class from one hundred to two hundred that are being shipped are charged at one hundred fifty because of the FAK agreement between the carrier and customer.

Distance: CWT calculations for less than truckload freight also take into consideration the distance the freight needs to travel.  This is a bit trickier as of course the longer the distance the more it will cost to ship.  Some LTL carriers will only service specific regions and if a shipment is sent outside the normal service area the trucking company will transfer the load to another LTL carrier.  This can add to the cost of the shipment.

Weight: With less than truckload shipping you actually pay less per pound the more a shipment weighs.  So a shipment that weighs two hundred and fifty pounds may actually end up costing $1.49 a pound where as a shipment weighing one hundred pounds may cost $2.00 a pound.

Minimums:  With less than truckload carriers there is an absolute minimum charge otherwise known as an AMC.  This is considered the minimum amount that will be charged or the shipment will not go.

Accessorial Charges: The accessorial charges are the fees that are charged for services that go beyond shipping the freight from one point to another.  Examples of these charges are inside pick-up, lift gate services, residential delivery, packing and many other extra services.

Jefferson Diversified Group, LLC is a Global Logistics expert offering LTL shipping and more. Check out available rates today at http://www.detroitltl.com.

Finding A Global Logistic Partner

Whether you are evaluating a new freight broker or shopping for a first it can be hard to assess what you should be looking for.  Every freight broker is different; no one freight company is like the other.  An integral part of your business is the dependability of your freight broker.  In order for success in business your freight broker’s plan of success should be in combination with one another.  Here are some questions to consider when interviewing a freight broker that is new to your business.

Are they licensed and insured?

Recently new laws have been put into place regarding the licenses and insurance that freight brokers carry.  Federal law requires that anyone arranging transportation for compensation has a federal broker license that is issued by the Federal Motor Carrier Safety Administration.  Without at least $75,000 bond as well as the proper authority a freight broker should not be providing arrangements for the transportation of goods.

Have they been in business long?

Avoid working with a freight broker who has been in business less than two years.  Up until this point they are in basic survival mode themselves.  They have not had time to build relationships with carriers and have yet to provide proof of consistent success.  With time freight brokers build history, experience, great communication and personal relationships with their carriers.

Are they multi-modal?

It is important that the broker you work with offer a variety of modes of transportation options to get your good from one place to another.  Using multi-modal transportation brokers can offer business, large or small, the fastest shipping at the best price.  Depending on your needs consider if you need to work with a broker that offers more than nationwide shipping, not everyone needs international shipping but if you do it will be important that your broker works with international freight carriers.

Can you get estimates and shipping rates in writing?

Cheaper is not always better.  All quotes should be in writing.  This allows you to see all the details including accessorial charges on your shipment.  Communicate with your freight broker if charges are not clear.  Don’t be blindsides with duties and taxes, these should be included on the original estimate.  Your written quote should include every charge included in your shipment.

In our next installment on choosing a freight broker we will take a deeper look into how brokers choose carriers, how they bill and all about reviewing their references.

Jefferson Diversified Group, LLC is a Global Logistics expert offering LTL shipping and more. Check out available rates today at http://www.detroitltl.com.

Choosing A LTL Shipper or Shipping Broker

Finding an LTL shipper is a small feat for many businesses.  No matter if you ship a few dozen LTL shipments or a group of pallets monthly you need to find a less than truckload shipper that works within your schedule and budget.  Choosing an LTL Shipper is one of the most important business decisions you will make.  Another way is to choose a shipping broker that will assist you in finding exactly what you need when you need it. Whether searching for an LTL shipper or freight brokers there are a few considerations to make to find someone that will help you build your business.

1)      Work With Those That Will Help You Simplify The LTL Shipping Process

Find an LTL shipper that will works with you to make your shipping as simple as possible.   A company that has your best interest in mind will determine what your requirements are so that no detail is forgotten as your LTL shipments are processed.  The process should be easy for you, every question that needs to be answered should be asked ahead of time in order to ensure the quote you are sent matches exactly what you pay.

2)      Find Companies That Will Help You Save Time

LTL shipping is one of the most complex methods of shipping.  Find a company that will work with you to identify the class of your freight, the weight, routing, rates, packing and documentation.   Work with an LTL shipper or LTL broker that will handle all of this for you so that you can concentrate on your business.

3)      Make Sure You Are Always In The Loop

You want to work with an LTL company or shipping broker that keeps you in the loop when it comes to any and all issues that may affect your business.  If the freight classification changes and it will affect your overall pricing you need to know that the company you are working with will let you know so that you can make changes to your shipping budget.

4)      Saving Money Is Important Too

A LTL shipper or broker should be working to leverage the best deal possible for you shipments.   Work with companies that will offer you discounts and blanket pricing.  A company that is looking to save you money will attempt to combine your shipments to save you shipping dollars. 

5)      Technology Matter

The software and advances in logistics matter when it comes to shipping your products.  Work only with LTL shippers and freight brokers that work with the latest in technology and shipping software.  This will ensure that your needs are met at the best possible rates.

Jefferson Diversified Group, LLC is a Global Logistics expert offering LTL shipping and more. Check out available rates today at http://www.detroitltl.com.

Exactly What Is LTL Shipping and Is It Right For My Business

Shipping cargo is something most businesses will have to do at one time or another.  The sea of options that are available when it comes to shipping makes it difficult to choose one.  How can you ensure that you are choosing the right company for your shipping needs?  Not all shippers will be right for you and your particular shipping situation.  If you are looking to ship a lot of items, or a few large items cheaply but don’t have enough to fill an entire truck your best option is to use an LTL trucking company, otherwise known as less than truckload.

Less than truckload shipping is for cargo that weighs between one hundred and fifty one pounds and twenty thousand pounds.  It is an option for small businesses that don’t have enough shipments to fill an entire truck but are tired of paying the high cost of Parcel Post.  LTL shippers take multiple small loads to create one full truckload.  This allows them to charge less than companies that ship parcels separately.  They fill an entire truck to in order to save money and maximize their profits whereas you are only paying for your share of the truck that is being used.

An example of this is if your shipment only fills a quarter of the truck you pay for that portion of the truck.  Then the rest of the truck is packed with orders from other companies to fill it completely.  Each company only pays for the amount of the truck that their shipments are taking up.

Even though LTL shipping can handle shipment upwards of twenty thousand pounds the ideal shipments will weigh around one hundred to ten thousand pounds.  When shipments weigh over one hundred pounds is when they become too expensive and too heavy to ship Parcel Post.  At around ten thousand pounds the expense of LTL shipping gets close to that of full truck load shipping at twenty thousand pounds.  These are things to consider depending on if you will have more shipments and you can hold off until they are ready to lessen the overall expense of your shipping needs.

Most local shipping companies offer less than truckload shipping options.  In order to find one that meets your needs shop around and research your options.  Find a company that is based around customer service, a solid reputation, availability and lastly price.  If a company is cheap but unreliable and falls short on customer service you are not better off in the long run.

Jefferson Diversified Group, LLC is a Global Logistics expert offering LTL shipping and more. Check out available rates today at http://www.detroitltl.com.

Maximize The Benefits of LTL Shipping

LTL shipping simply means less than truckload shipping, otherwise known as shipping a small amount of cargo.  The shipment does not have to fill an entire truck therefore it is available to be used to ship other company’s goods all going to the same general location.  The truck space is sold through shipping companies or freight brokers, at a discounted rate so that the space within the truck is completely filled. 

The same approach is taken to unfilled hotel rooms and cruise ships.  The space would sit empty if it was not brokered out.  The shipper makes less on unused space then it does on space that is discounted.  The shipper can’t always coordinate a small shipment that is why they use brokers to fill in the small spots that have not been filled.  This allows shippers to maximize the space on their trucks, helping to maximize their income while being able to pass the savings on to shipping brokers who coordinate with their customers to ship out smaller shipments.

 

For companies to maximize the benefits of LTL shipping for you cargo shipments you need to take time to do some preparations on your own. 

·         First find a company that ships a wide selection of goods and that offers additional service options to the customers they serve.

·         Have a list of requirements that need to be met for your general shipping needs.  Consider the immediate need and also the future needs of your company. 

·         Gather a list of names and phone numbers to carriers that provide the services you need for shipping your cargo.

·         Talk with your account manager at each of the shipping providers.  Developing a relationship with them will help get you the services you need when others may be vying for the same shipping space. 

·         Be sure before signing contracts or committing to shippers that you thoroughly check the references of each company you are interested in working in conjunction with. 

·         Check to ensure that the companies you are interested in working with have all the licensing requirements needed to handle all of the cargo that you need shipped.

Not every shipping company is the same.  It is crucial that you find a Less than Truckload shipper that works with your business model.  This may take some time and the process should not be rushed.  If at first the services of the shipper initially chosen don’t fit well with your needs move on to find one that does. You will reap the benefits over time when you chose a carrier that can provide the services you need. 

Jefferson Diversified Group, LLC is a Global Logistics expert offering LTL shipping and more. Check out available rates today at http://www.detroitltl.com. 

Simplifying Holiday Logistics With LTL Shipping

The holiday season brings with it many reasons to celebrate and to be thankful.  It also brings with it minor hassles especially for the logistic divisions within companies of all sizes.  Christmas is synonymous with shipping.  For many retailers the months of November and December measure the success of their business as well as the economy in general.

Companies gear up for the holiday season early.  They look for strategies to get their products out into stores and in the hands of consumers just in time to meet the seasonal need.  Seasonal logistics affect all companies.  This is true even when your company does not seasonally ship their products.  The holiday madness itself affects hipping therefore affecting shipping departments throughout all industries.

With the season fast approaching it is important that your companies shipping department is running efficiently.  Freight brokers are preparing for a surge of orders coming and are looking into a variety of carrier options to adjust to the influx.  To ensure that your company does not fall short during the peak holiday season below are some tips to consider.

Advance Rate Shopping

When you shop shipping rates in advance of the seasonal rush you are more likely to be able to enact a plan that will allow you to meet the needs of your company.  Add in a time in transit rule that allows you to compare services between air and ground.  Not only will you be allowed to consider the cost but also the amount of time it will take for the transit of your products.  You are allowed to weigh the cost savings verse the time it takes to get your product where it needs to be and then make a decision based on which is more valuable to you at the time.  Advance rate shopping takes into account both regional and national shipping service options.

Implement Automatic Service Updates

Automatic service updates implement changes to the shipping software you use.  IT allows you to create a rule that applies an in hand date to your shipments.  This option assures that a product is shipped via the method that will get it to its destination when it needs to be there.  The transit method, be it truck load, less than truckload or a variety of other options in which the product will be shipped is directly affected by when it needs to be in the retailer or consumers hands.  Upgrading your software may be a costly logistic expense that needs to be considered when looking into updates in your logistic division.  Look into updates that offer the most benefit to your company with the least amount of expense.


Jefferson Diversified Group, LLC is a Global Logistics expert offering LTL shipping and more. Check out available rates today at http://www.detroitltl.com.

Lessen Your Expenses Without Decreasing Service

Every business owner you meet will tell you that they are always concerned with ways to lessen expenses while achieving the same if not higher customer service levels.  This is something that is true of all businesses from all areas of the globe.  Even with economies picking up cost savings is something all businesses search for, every dollar counts.  There is no exception to this concept especially when shipping freight. 

Freight companies can never put shipments on hold because of increase costs to gas or oil supplies.  They can never defer business in hope to achieve cheaper rates later on.   The same is true of companies shipping their products.  Your company may downsize their logistics division and restructure the transportation management division but shipment still need to be received and sent out.  Your company may need to look into outside carriers to ship goods.  There are several ways this can be achieved including couriers, parcel post, LTL shipping, full truckload shippers, air, rail or water shipping. 

For freight shipping services to continue they must prove to be the best of the best.  The rates must be kept within reasonable industry standards, customer service must be better than the competitors and shipping times must continue to prevail.  When shipping costs increase it can really add a deep hole in your company’s budget.  Here are some tips to help achieve lower shipping rates while maintaining customer services and shipping times. 

• Choose to ship smaller amounts of product more frequently.  If your shipments are stored to achieve enough for a full truckload you are spending unnecessary funds for storage of the product.  Have your shipments sent out more often in smaller qualities.  Freight is charged not only on weight but the amount of space that is taken up with in the truck.  With this in mind you may see increased benefits in sending smaller loads out more frequently than allowing shipments to pile up. 
• It is less expensive to ship from company to company rather than company to residential.  Keep this in mind when shipping your company’s product out to residential customers.  If having them pick the product up at a local store will offer cost savings for your company consider this as a viable option.  Many people will drive to pick up their deliveries if it means that they would have to pick up the additional cost of shipping. 
• Stop spending money on unnecessary additional shipping services.  If you have a larger, heavy product come prepared to pick up the product on your own with the help of a friend or dolly system.  This is true even when receiving products.  Consider unloading the shipments on your own using your own equipment to save money.
• Carting your product is often a better option over using a pallet.  Crates protect goods, save money; this is especially true in LTL shipping.  The lower ranking your product has the cheaper it will be to ship.  Crated products have less ranking than their pallet equivalents.

All of these tips are meant to be helpful in lowering your freight shipping costs.  You can find additional information online by searching for LTL shippers in your area.   

Jefferson Diversified Group, LLC is a Global Logistics expert offering LTL shipping and more. Check out available rates today at http://www.detroitltl.com.