Technology is now an integral component of supply chain efficiency. As such, providing customers with accurate shipping quotes is extremely important as a business owner.
However, discussions surrounding the basics of the industry are often lost as new innovative technologies continue to emerge. One such concept is the National Motor Freight Classification or NMFC codes.
Keep reading to learn more about what these codes are and why they are so important to the shipping industry. Let’s start off by defining what NMFC codes are.
What Are NMFC Codes?
When you’re running a business, the bureaucracy involved in supplying your product to customers is rather complicated. How do you determine shipping rates, especially when dealing with various items that range in shape, size, and weight?
The National Motor Freight Traffic Association (NMFTA) devised a system to standardize freight transport costs. The goal was to classify commodities and provide transparency so that transporters can provide their clients with fair quotes when said clients are looking to utilize their services.
The goods are divided into 18 freight classes, and every product shipped out is given a specific code. Each freight class is identified by a number ranging from 50 and 500. These NMFC codes are stored on a database that is updated and easily accessible to carriers.
Obtaining the correct code is the first step in determining the item’s freight class as it establishes its transportability, which will be discussed in the next section.
What Is a Freight Class?
Freight class is the standard the shipping industry uses to categorize commodities for freight identification. Each commodity has an NMFC code and a freight class.
The freight class is the category of items the shipment belongs to, while the NMFC code identifies the item that is being shipped. Freight classification is used for interstate, intrastate and international movements of freight shipments.
The NMFC coding system provides a common ground for shippers and carriers to facilitate logistics and freight rate negotiations.
What Is Freight Classification Based On?
There are four major factors that serve as the basis for the classification system:
The amount of space the item occupies in the trailer is considered its density. The density is found by using the item’s weight and dimensions in pounds per cubic foot. If the item has a high density, it belongs in a lower class and it will cost less to transport than lower-density items. This is great news for shippers and carriers as transport companies will want heavy items that don’t take up as much space in the trailer. That way, carriers can transport more items and yield more cash.
Stowability is how well the item fits with the other freight that is being transported. Does the shipment contain hazardous materials? Does it have odd dimensions that would make storing other items difficult? The answers to these questions will be taken into consideration when determining the stowability of an item.
An item’s liability factor is the likelihood of the shipment being damaged, lost, stolen or resulting in damage to various other freight. The perishability of the shipment is also a component of its liability.
Ease of Handling
This is the shipment’s ability to be loaded and unloaded as it is transported from one terminal to the next. The fragility, dimensions, and packaging details of the shipment aspects are used to determine how difficult it will be to move the freight.
How Does Freight Class Affect Quote Prices?
A lower freight class means you’ll pay less for shipping. As such, freight with a class of 60 has a lower shipping rate than an item with a class of 300.
For example, car parts have a class of 60, so they would be cheaper to ship than a wood table with a class of 300. You’re probably wondering if the only way to ship freight is by using the NMFC system, so let’s explore the answer to this question now.
Is There Any Way Around the NMFC Classification?
There are two ways to avoid shipment delays and unplanned costs. The first is to dedicate time to studying the NMFC codes and staying on top of the updates or reclassifications as they arise.
You are aware of the items that you’re going to ship to the customers, so make sure you find the NMFC codes for them instead of depending on the carrier to correctly apply them for you. That may not sound like fun, but there’s another straightforward method that will simplify the entire process for you.
It might even decrease costs on your end, and that method is pallet freight shipping. Wood or plastic pallets that weigh anywhere from 20 to 70 pounds are typically used to transport freight. The pricing is upfront as you’ll be charged a flat rate, no matter the item’s classification.
Rates are calculated based on a standard-sized pallet, but adjustments are made when a special pallet needs to be used instead. There are benefits to using pallet freight shipping, and invoice accuracy is a huge one.
You also won’t have to worry about additional costs springing up at the last minute due to the shipment being misclassified. This will allow you to offer more competitive shipping rates as your exact out-of-pocket cost.
However, if pallet freight shipping isn’t what’s best for your business, we’ll cover how to locate the NMFC codes needed for your shipments next.
How To Find Your Correct Freight Class or NMFC Code
Most carriers have a tool or calculator on their site you can use to find your item’s freight class and NMFC code to estimate shipping costs. The key word here is an estimate – you may not choose the correct code and incur additional charges.
To avoid having your freight reclassified, you need access to the NMFC database, which freight companies have. Speak with the carrier, and they’ll help you classify the shipment correctly.
If you are using an NMFC classification tool, here are the steps to finding the right freight class and NMFC code.
- Conduct a search for the item, and be specific.
- Choose the commodity that best describes the freight being shipped.
- Use a freight calculator to find the item’s density.
- Pick the right class based on the item’s density.
Freight Class Tips
Here are a few ways you can keep shipping simple and hassle-free.
- Always place the NMFC code on the Bill of Lading (BOL) for the carrier to see.
- Always provide the freight description directly on the BOL, as the item is less likely to be re-classed if the carrier knows what it is.
- While class calculators can indicate a shipment’s density, the classes are estimates. Not all commodities have density-based classes.
- Know your carrier’s habits and limitations. Some conduct more thorough inspections and are harder on re-classes.
- Don’t try to trick the freight shipping company by cheating on your freight class. Be honest and avoid the penalties associated with constant re-classes.
Understanding the Importance of NMFC Codes
The classifications used to determine NMFC codes are essential when determining your freight shipment’s cost. The type of freight you ship and the costs to get the product to the end-user play a key role in your company’s profit projections.
As such, it should be taken seriously. The NMFC system simplifies the process and provides shippers and carriers with a clear and precise method, permitting them to run their businesses efficiently.