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Freight Classification Errors, Re-Weighs, & Other Common Freight Adjustments Are Eating Your Bottom Line’s Lunch

freight classification errors cost money

Keeping the supply chain operation at peak efficiency requires efficient and economic transportation of goods. This all starts with an eye to detail towards the most effective transportation management practices.  There is a strong relationship between mismanaged supply chains and transportation and loss of profits, as an effectively structured supply chain will reduce business operation expenses.  Shippers are often challenged when dealing with the freight classification system from the National Motor Freight Classifications (NMFC) book, the code numbers assigned to all products that determine the correct freight class for shipments.  Logistics and transportation professionals at third party logistics companies have the necessary expertise to help shippers avoid re-classes and re-weighs when it comes to NMFC codes to help reduce unplanned expenses.

LTL shipping, much like any industry with so many moving parts, can be a bit tricky from time to time. Between re-classes, re-weighs, other freight invoice adjustments due to mistakes, accessorials, freight delays, and damaged shipments, there are numerous things to watch out for when moving your freight – so it’s important to do the necessary groundwork BEFORE you start shipping.

In today’s post we will offer up some information and best practice tips to avoid common mistakes such as incorrect freight classification (which could results in a re-class by the carrier, wasting both time and money for both parties), incorrect weight resulting in a re-weight, and what are some of the most common freight invoice adjustments that may occur due to error. As we said in our freight claims series, knowledge is power in avoiding errors that may drive up your transportation costs unnecessarily.

A Brief on Freight Classification

There are 18 freight classification categories which range from the most dense lbs/cubic ft (least expensive) to least dense lbs/cubic ft (most expensive classes).  The freight classification (NMFC) is provided by the National Motor Freight Traffic Association (NMFTA) and identifies, the typical density, size, stow-ability and value of the goods being shipped.  The shipment’s NMFC code establishes the carrier’s shipping charges.  It is critical for transportation companies to accurately identify the correct NMFC number and resulting freight class needed to obtain correct freight charges.  NMFC numbers and classes are categorized in the NMFC Tariff.  Inaccurate NMFC numbers and freight class result in a carrier re-class which can result in a higher or lower than expected shipping charge.

So Why Do Shippers get Freight Classification Wrong and Experience Re-Classes Anyway?

Unfortunately, shippers choose to look at class first. You don't pick the class of your freight, you pick the correct NMFC description of your freight which gives the shipper the correct and accurate freight classification. Cost of the NMFC  book unfortunately is around $275 for non-participants so that is also a reason why many shippers don't own the book which would guide them towards the right freight classification. This is even more especially true if the shipper only ships a few different commodities.

Further, most shippers don’t have the resources or time to attend one of the webinars put on by the National Motor Freight Traffic Association that would help educate the shipper on how to determine the correct description, NMFC Item number and class for a shipper’s freight which could then be put on a printed bill of lading. With this knowledge no carrier would dare challenge since correctly applying the information from the NMFTA is the best practice when choosing freight classification.

When shipping freight of any kind, the freight classification needs to be researched and understood.  Many shippers do not understand what the NMFC codes really signify and don’t get concerned until the shipment is charged higher fees than anticipated.  For example, shipments changed from a Class 70 to a Class 150 could incur an additional fee.  Carriers have specific employees whose job is to reclassify any shipments necessary.

Another reason shippers choose the wrong freight classification boils down to some of the most dangerous words in business: “We’ve always done it that way.” This is akin to passing down an old wives’ tale that isn’t always the whole truth. What we mean is that someone who was choosing the wrong freight class before trains the new person to do the same exact thing! Why?! Well, we are all busy and have a job to do, right? Sometimes, it’s easier in the mind of the transportation coordinator to just “Get it done” instead of “Get it right.” Unfortunately, this doesn’t hurt the transportation coordinator directly, but does hurt the business who is letting unnecessary costs pile up.

In brief, here are some ways shippers can avoid freight classification errors:

Know your freight classes: Errors and oversights in LTL freight billing can be common, especially in product classification. The NMFC system can be confusing, and products may be classified incorrectly, resulting in higher rates. Additionally, products may have been arbitrarily assigned a general Freight-All-Kinds classification, which may be higher than the actual product classification. Work with your carrier to negotiate rates and talk about your freight history with them. If you are not comfortable with doing so, a good third party logistics company are experts are freight classification knowledge.

Use Technology to your advantage: A transportation management system has many benefits, one being the ability to avoid costly errors and increased costs by storing your common freight classifications so there are not things such as simple data entry error. Also, if you are using an ERP system, see if integration is offered in the TMS so that way your classification and commodities are built in.

Audit Your Freight Bills: Shippers should audit freight bills, and if you are using a third party logistics provider, they should be doing it for you (if they are not, well…..). For starters, 3PLs will audit the NMFC code on the freight’s bill of lading to ensure it hasn’t been misclassified at a higher rate. Determining a wrong freight classification is not always obvious as it may require the knowledge and expertise of an experienced logistics professional.

Although routinely checking bills of lading can help contain freight costs, doing so often requires substantial staff to manage the process in-house. Regularly reviewing NMFC classifications to keep up-to-date with changes involves time, which may stretch an in-house staff.

Use a Third Party Logistics Provider: In addition to uncovering and preventing potential freight errors, 3PLs can quickly obtain and compare quotes from multiple carriers, and follow up with shipment status. Relying on the resources of a dependable, proven 3PL can give shippers both a logistics and a competitive advantage.

A Brief on Re-Weighs

freight classification and reweigh errorsTransportation costs include the gross weight and the dimensional shipment weight.  Dimensional weight is calculated by multiplying the length, width, height in inches and dividing it by various factors to establish the cubic weight of a given shipment.   The greater of the actual weight versus the dimensional weight will typically determine the shipping charges.  Transportation charges for heavier items are determined by gross weight.  Light items, such as plastic toys may have transportation charges derived from their dimensional weight, as their dimensional weight is higher than their actual weight.   Freight companies can decide to re-weigh items at any time during the shipment transport process.  Shippers who estimate approximate weights on their shipments may find their products re-weighed for greater accuracy and be subject to increased shipping charges.  Carriers may even re-bill at a non-discounted rate for the discrepancy.

Re-weighs are one of the most common daily issues reported by shippers.  When the weight on a Bill of Lading doesn’t match what the carrier shows on their scale, additional charges are added.  The re-weigh process can occur at any terminal at the discretion of the carrier.

True to its name, a Reweigh occurs when the weight on the BOL (Bill of Lading) does not match the weight the carrier shows on their scale, resulting in an additional charge for this extra weight. These reweighs can happen at any terminal the freight passes through, and are up to the carrier’s discretion.

To avoid these reweigh charges, here are a few things to consider before shipping your freight:

  • Have you included the weight of the pallet (or other packaging) in your total weight notated on your BOL?
  • All weights on the BOL should be precise weights, not approximations.
  • If a reweigh does occur on your shipment and you’d like to dispute, do you have manufacturer specifications that prove the item to be the original weight?

When it comes to reweighs, the best defense is a good offense, so it’s best to be proactive in the beginning. Get all the correct information on the BOL the first time and that will dramatically cut down on the chances of a reweigh.

Other Common Freight Charge Adjustments/Accessorials To Consider

    • Oversize fee: Applies to shipments exceeding 12 feet in length. If the dimensions are factored into the quote in advance, this fee can be avoided.
    • Lift-gate: Lift-gate trucks are required for freight exceeding 100 pounds or 72 inches in height and the pick up or drop off location does not have an accessible dock to move the shipment directly off the truck.
    • Limited delivery access: If the pick up or drop off location has limited access for carriers, an adjustment may be applied. Limited access locations include: camps, places of worship, educational institutions, construction sites, fairs and carnivals, individual/mini storage units, military base/installations, mine sites, some government facilities, schools, businesses located outside city limits, rural locations and farms. Limited access may also include commercial businesses not open to the walk-in public or where an employee is not available to assist with loading or unloading.
    • Residential fees: Can apply to pick up or drop off locations that are not businesses. This can include businesses that are not visibly labeled to the public. To avoid this adjustment to a business, make sure the business name is accurately listed on the bill of lading.
    • Bill of lading changes: Changes to the bill of lading, including changes to the shipper address, consignee address, piece count, weight and freight call can result in adjustments if a carrier has based the freight quote on any of the provided information.

Third party logistics experts offer the best transportation management options which significantly improve cost savings and efficiency opportunities to shippers.  They have experts available to help shippers properly class items with the correct NMFC number, get the right weight, and if necessary also advocate for the shipper with the carriers to work with all parties involved to proactively educate and create a favorable business environment for all.

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Adam Robinson
Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.
Adam Robinson
Adam Robinson
  • Terry

    All good points. On the other side of this is if you have been in business a long time, and know your freight classifications and weights are correct. Watch those carriers who tend to abuse this process of changing classifications. We have fired some long time relationships because of these issues, which sends a warning to your current carriers to not get overly creative in their invoicing. Good carriers do not have to resort to these types of practices. It’s one thing if the weight or class is actually wrong, but it’s another if someone is trying to just boost their bottom line (watch for this in companies who are getting bought out or in financial troubles.

  • A company made the majority of motor freight shipments on pallets and each shipment was weighed on a pallet scale integrated with the stench wrapper. Yet, they received way too many corrected freight bills based on dimensional weight recalculations done at carrier terminals. Sometimes this was based on measurements to the fraction of the inch. Sometimes, these made only a small change in the billable weight and in other cases it resulted in a classification to a lower density and higher rate. In all cases, additional charges had been added to the freight bill for recalculation.

    To address this problem, the company documented their palletizing/shipping process. Only standard 40 x 48″ pallets were used and absolutely NO overhang was allowed. A key piece was was to have the maintenance department add a height scale to the arm of the stretch wrapper and a pointer to the scale that correlated to pallet height. Now, in addition to recording the pallet weight, height was also recorded so the cube of the pallet and dim weight could be easily calculated.

    After this was implemented, every recalculated freight bill received was check against the documentation. What it showed was that the vast majority of recalculation measurements were either sloppy or grossly wrong.

    When bills were rejected back to the carrier, they were corrected back to the original weights and dimensions, and the number of recalculated bills dropped almost to zero.

  • Randy

    Here’s one to really watch out for…if your freight is classified by the density..IE: Plastic articles, clothing, hardware…etc…
    The carriers have a tendency to reweigh shipments but not recalculate the density. If the weight increases, so does the density. Often it changes enough to lower the classification. I have had many of our customer’s freight bills reduced just by being aware of this carrier practice!!

  • That’s a really useful article. Thanks for taking the time to put it together, we’ll share with our customers!

  • Ray Kremer

    Reweighs are often fraudulent as well. We get hit with reweighs all the time and it is 100% fraud. Typically it is 200-250 lbs added to a 600 lbs load that could not possibly weigh more. Claiming we were off by five or ten percent I could handle, but it sounds like they have a worker stand on the scale with our shipment during the reweigh. They have tried to tell me their scales are accurately calibrated by way of excuse, but no amount of calibration will help when they are running a scam.

    I’m not saying that mistakes on behalf of the shipper do not happen, but I know for a fact that multiple shipping companies pull this very often and count on companies where the person paying the invoices doesn’t care enough to check the charges against the quoted price before writing the check.

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