How do LTL shipping rates work?
LTL carriers will usually apply a discount on shipments as the freight moves up in weight, meaning there are various "weight break" discounts an LTL carrier may give.
Shipments larger than 6 pallets can still ship with an LTL carrier but these moves are normally considered volume moves and are spot quoted.
Factors That Determine LTL Shipping Rates
→ The more a shipment weighs, the less you pay per hundred pounds.
→ The total weight of the shipment is divided by the total cubic feet to determine density.
→ If the shipment is palletized, use the dimensions of the pallet, the combined height of the freight and the pallet, and the total weight of the shipment.
→ Once density is calculated, you can determine the freight’s class.
→ There are 18 different classes – ranging from 50 to 500.
→ Lower classes have lower rates and higher classes are subject to higher rates.
→ If a LTL shipment has to be interlined, then there could be more charges.
→ Interlining occurs when a shipment’s destination is outside the carrier’s standard service area and the carrier must find another LTL carrier to finish delivery.
→ LTL carriers establish their own base rates, which are quoted per one hundred pounds.
Freight All Kinds (FAK)
→ FAK is an arrangement between the client and carrier that enables multiple products with different classes to be shipped and billed as the same freight class.
→ LTL carriers apply a specific price point, an absolute minimum charge, which they will not charge below.
→ These charges are incurred if LTL carriers preform more duties than stated on the BOL. Usually these charges can be negotiated or avoided.