There are many carriers that specialize in or offer this service. LTL carriers move goods from many different customers on one truck and offer customers a more cost-effective method of shipping goods, as opposed to a full truckload service.
Unlike FTL shipping, which has rates based on a set-in-stone system, LTL freight rates can be very confusing. Many factors regulate LTL rates, largely impacting the cost of a shipment. Here are four of the most important factors that determine LTL freight rates:
LTL freight rates are structured so that the more the shipment weighs, the less you pay. As the weight of the shipment increases and approaches the lowest weight in the next heaviest weight group, it will be rated at the lowest weight category and rate in that weight group.
Typically, the longer the distance, the higher the price-per-hundred weight will be. Many LTL carriers only serve a specific geographic area, so it’s important to consider where you’re sending your product. If a shipment is sent to an area outside of a carrier’s normal service area, the company will transfer the shipment to another LTL carrier for final delivery. This may result in higher costs due to lower discounts and higher minimum charges.
Classification of Freight
Each piece of freight has a classification in the LTL world, and the classification is a huge factor in determining the LTL freight rate. The National Motor Tariff Association (NMTA) has established 18 different classes ranging from 50 to 500. The class of a piece of freight is determined by product density and value, stowability, handling and liability. Lower classes have lower rates because they are very dense freight that’s difficult to damage and is easy to handle. Higher classes represent lighter and less dense freight that tends to take up more space. The higher the class, the higher the rate will be.
Accessorial charges come from extra services performed by the carrier that go beyond the typical business to business pick ups and deliveries. Common examples of accessorial charges include lift gate service, residential pick up or delivery, limited access locations (think jails, prisons, churches, schools and storage units) and inside delivery. These charges can be negotiated or even waived altogether. The most common accessorial is a fuel surcharge, and it’s typically factored into every shipment.
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