How to use the NMFC and classify LTL freight

Among the many factors that go into effectively managing LTL shipments, the classification of freight ranks as one of the most important. The National Motor Freight Classification (NMFC), which is set by the National Motor Freight Traffic Association (NMFTA), provides an industry standard that LTL carriers must use to determine shipment costs based on a variety of factors. In this workshop, we were joined by Adam Mercer and Larissa Franklin from NMFTA. Adam works as a Research Analyst and Larissa serves as a Packaging Development Manager, so both come to the table with loads of expertise on this topic.

SMC³’s LTL Online Education course LTL203 provided an overview of NMFC guidelines, complete with insight into the factors that determine freight classification and several examples.

Classification factors

As many know, LTL freight involves many types of freight with many variances in terms of how it is packaged and how it might fit in a trailer. This diversity presents an issue: How should we evaluate and assign shipping costs to these diverse sets of items? The answer is NMFC classification.

NMFC classification is based on four factors:

• Density –– What is the weight (in pounds) per cubic foot of each item?

Items with higher density tend to be less expensive to ship than low-density items and are scored according to this chart:

When evaluating an LTL load, the average, and the median density of a load both come into play. For more on this, see the difference between electric toasters and clothing in the examples below.

• Handling –– How easy is it to move the item around?

Size, shape, and weight all play a role in determining an item’s handleability. Fragile, hazardous, and otherwise difficult-to-handle items tend to incur higher shipping costs.

• Stowability –– How easily can the item be transported alongside other items?

Some items are uniquely shaped, extremely heavy, or even flammable––this all impacts how difficult it is to stow in an LTL context. The more difficult to stow, the higher the cost.

• Liability –– What other qualities does the item have that may impact shipping?

Is the item easily damaged, or is it likely to damage nearby loads? Is it at risk of being stolen? Is it perishable? All these factors increase the liability associated with a load, which increases how expensive it is to ship.

Crucially, NMFC codes are different than LTL freight classes and the two should not be confused. Freight classes are primarily determined by density, whereas NMFC codes are based on a wider array of factors. It’s also worth noting that NMFC classifications do not consider the revenue that will be derived from the shipments of a commodity in its scoring process, except for how that value may impact the “liability” factor listed above.

Examples

To better understand these four factors, let’s see them in action in the following examples.

• Electric toasters

These items don’t come with any stowability, handleability, or liability issues. They come in boxes and can be easily stacked, wrapped, and banded, which means that density will be the primary factor impacting cost. These items are also consistent in their density––both the mean and median density comes in at around 6.37 pounds per cubic foot (PCF)[1], which lines up with a class of 150 on the density chart. Because there are no other issues to consider, you can write your provisions at a straight class of 150.

• Clothing

Again, there are no stowability, handleability, or liability issues here. However, unlike the electric toaster load described above, the median and mean density of this load are not at all close. In other words, the load varies in density, which means that the load must be split up into subcategories based on the density of specific items.

• Panes of glass (eight feet long)

In this case, the fragility and large dimensions of the item being shipped impacts handleability, stowability, and liability. It will be relatively difficult to get the item in and out of the trailer and simple transport may require multiple hands. Damage to the item is also very possible. This all affects the NMFC classification, as does the density of the glass.

• Hazardous materials

The USDOT has co-loading prohibitions and segregation requirements that impact NMFC standards for liability and stowability in this case. Here, USDOT dictates certain “packing groups” that correspond to different classifications based on the specific hazardous qualities of the material.

• Mirror doors

Like the panes of glass, this example carries stowability, handleability, and liability issues. Unlike the glass, however, these issues can be significantly mitigated by robust packaging. If this packaging meets certain requirements, the total cost of shipping can be reduced. The NMFC provides general packaging definitions and specifications that impact classification in cases like this. Of course, this presents carriers with a strategic calculation: Does the cost of additional packaging offset the savings in shipping costs? Answering this question comes down to the item in question, as well as the “acceptable level of damage” the carrier/client is willing to tolerate.

Looking for more information on LTL shipping standards and procedures? SMC³’s FastClass solution provides accurate and timely LTL freight classification date.

Check out our online learning center to grow your skillset and accelerate your supply chain career!

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[1] These numbers are based off NMFTA’s Commodity Profile Database