How Is a Truckload Freight Rate Calculated?

Jul 24, 2019 Elizabeth Raw Elizabeth Raw

The trucking industry in the US is growing at a rate of 4.2%. This may not seem like much, but it is causing steep competition among shippers to get their loads on the limited number of trucks. 

Curious how your rate gets calculated for your freight loads? If you know how trasnport companies come up with their rates, you can gain the advantage. You will have an opportunity to optimize your loads to receive the best truckload freight rate while ensuring your load gets to its destination. 


What Is Freight?

Freight is a consignment with weight over 100-150 pounds or has very large dimensions. These can be cargoes that are too big or overweight for small lot truckers. 


National Motor Freight Classification (NMFC) 

The number one action in figuring out your rate is to define your shipment's classification number. The NMFC specifies freight class by following these parameters: density, stow-ability, handling, and liability. 

The freight class of your consignment will significantly influence the cost of it. This is how freight rates are standardized. This way, the transporter can quickly and easily charge more for consignments that are large, valuable, or hard to transfer. 

There are 18 classes with range between 50 and 500. As a common dependence, the lower the class , the lower is the cost of shipping. 


Density 

The more compact an item is, the heavier it will way per foot, and accordingly it will take less capacity on the truck. So if you want to ship bricks, they take up less room than windblown baloons of the same mass. 

Because the bricks are denser, they have a lower freight class. Consequently, it will be cheaper to dispatch the bricks than the baloons.


Stow-Ability 

While most loads have no problem getting thrown on any truck with any other items, there are definite things where this is not possible. If you plan to ship food or dangerous goods, then expect these items to be less stow-able. 

Shipments that require special accommodations will incur a higher cost. Truckers have to go out of their way to ensure they have a dedicated truck that can handle your special needs shipment.


Handling 

If your shipment is a box of durable items on a pallet, then you have an easily handled shipment. However, if your item is glass, hazardous material, or an odd shape, then it needs special care. 

Carriers will charge you more as these items are not as quickly moved.


Liability 

Carriers will look at the likelihood of your shipment getting lost, stolen, or damaged. The more likely these things will happen, the higher the cost will be from the carrier. 

If your shipment is glass, explosives, or hazardous material, then the carrier is taking on a greater liability. Whereas if your shipment is books or linens than there isn't a significant risk to the carrier. 


Freight Class Examples 

Bricks are an excellent example of the class of 50 - the items with density over 50 lbs per square foot. 

Tires fall into a freight class of 77.5. These are commodities that are between 13.5 to 15 lbs per square foot. 

Some shipments automatically fall under a certain class, such as trade show exhibits - the class 125. 

Cabinets weigh about 2-3 lbs per square foot. So they are class at 300. Then even lighter would be ping pong balls at class 500. 


Calculate Density 

To understand how it works, we need to apply som mathematical approach. Define the dimensions of your consignment. Determine the biggest point and include the packing materials. 

If there is more than one pallet - don't forget to put dimensions of every of them.

Multiply the three dimensions to receive the volume. If you have many items, calculate the volume for each of them and sum them up.. 

Now the result must be divided by 1,728 to turn the cubic inches into the cubic feet. Then, if you divide the total mass by the resulted cubic feet - you will get exactly how many pounds per cubic foot your consignment weights. 


What If You Get the NMFC Wrong? 

You must do the math accurately and carefully. The carrier will check your cargo. If you get it wrong, the carrier will revertand adjust your rate. 

Carrier rate adjustments will result in a higher cost than if you had done the initial calculation correctly. 


Origin and Destination 

Once the carrier knows your freight class number, it will use your shipping time and locations to factor in the final LTL quote. The further your cargo needs to be delivered, the more expensive your rate will be. 

The carrier will also consider how often their trucks travel to your chosen origin and destination. There are certain geographic areas that the carrier will consider a "major lane" where the bulk of their shipment travel. These will typically be the cheapest rate as the carrier commonly goes here. 

If you want your shipment to go somewhere obscure, the carrier will charge you more. Remember, the carrier only makes money when someone is paying them to transport loads. So if your freight goes somewhere remote, it will be harder for the transporter to find other cargoes for that area. 

This means the truck may be empty on the return trip after dropping off your consignment. This is a loss for the carrier. So to recoup this loss, they will charge you more. 


Calculate Your Truckload Freight Rate

As you can see, figuring out your road freight rate isn't as complicated as it seems. All you need to do actually is define the measurementes and mass of your consignment

From there, you can define density and figure out your freight class. This will enable you to get a freight quote from multiple carriers and compare rates. 

Find the best rate for your load by using our freight quote search engine


Elizabeth works for R+R Packaging, providers of biodegradable and eco-friendly packaging materials for businesses within a wide variety of industries.

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