To the seasoned industry specialist, transportation lingo might not be a problem. However, the same cannot be said for the customers we serve daily. In a world filled with so much information, it is important to ensure that certain basics are covered, such as the NMFC codes freight classification.
Unlike the latest developments within the freight industry that seem to take all the headlines in 2018, such as capacity crunch or autonomous vehicles, NMFC is pretty basic. It is easy to move hundreds of packages every day with the NMFC tag on them without actually knowing what they actually stand for.
NMFC Codes and why we use them
These codes are created out of the need for ample standardization and control in the freight industry. The regulators that instituted this standard was the National Motor Freight Traffic Association (NMFTA).
In a bid to institute fair pricing and procedures, the association classified freights into eighteen (18) different classes that are categorized within the 50 to 500 number range. NMFC stands for the National Motor Freight Classification Number and it estimates the shipping rate and associated tariffs on that item.
This code is important because it helps freight companies to accurately charge their customers in relation to the standards set by the organization. The categorization of packages into these classes is dependent on four (4) factors listed below.
- Density: This is the standard measure of the weight of a package when compared to its weight. The higher the density, the higher the class of the freight.
- Ease of Handling: The more difficult a freight is to handle, the higher its class and vice-versa.
- Liability: Items that are less durable such as perishable, refrigerated or fragile items pose greater liability and therefore are higher up in the class.
- Stowability: This refers to how easily the dimensions of a product fits the dimensions of the carrying vessel or container. The lower the stowability, the higher the classification of the freight.
Using NMFC codes for LTL shipping
LTL shipping refers to Less Than Truckload shipping and defines the freight that doesn’t require the use of an entire truck but instead moves relatively small freight.
The NMFC code plays an important role not only in the determination of the costs a freight incurs but also in resolving freight claims whenever necessary. Companies that specialize in LTL logistics are particularly motivated to get the classification of the NMFC codes on their freights accurately as it can greatly impact their bottom line.
The reason being that their goods are typically less pricey to transport, thereby accurate NMFC classification ensures they have enough margin for profits. Also, because LTL customers only pay for the space that their items need, their accurate classification ensure items of similar classes are grouped together and thereby eliminating the risk of damage.
The LTL operating model is considered the carpooling model in freight logistics and is made more profitable with accurate NMFC classification.
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