Beginners Guide to Freight Shipping: Understanding Freight Basics
Dave Loggie
started a topic
about 1 year ago
Freight shipping is the transportation of commodities, commercial goods, and cargo via land (truck or rail), air, or sea. Unlike parcel shipping, which typically involves small, individual packages, freight shipments are larger and may be palletized or crated for transport.
Freight Shipping vs Parcel Shipping
Freight shipments are distinguished by their size, weight, and mode of transport. Parcel shipments, on the other hand, involve smaller packages shipped individually, often via courier services.
Types of Freight Carriers
1. Road:
Less Than Truckload (LTL): Suitable for shipments that do not fill an entire truck. Multiple LTL shipments are often consolidated onto one truck, allowing for cost savings. U.S. carriers typically rate based on NMFC Classification. Canadian domestic carriers usually rate based on the greater of actual or dimensional weight, while Canadian-based cross-border carriers may provide rates based on the number of pallets shipped.
Partial Truckload (PTL): Falls between LTL and FTL in terms of shipment size. Transit times are typically shorter than LTL, reducing the risk of damage.
Full Truckload (FTL): Fills an entire truck and is the most efficient option for bulk shipments. While seemingly costly, FTL is efficient for direct point-to-point transport.
2. Air:
Best for timely shipments but comes with a higher cost compared to other modes. Strict regulations govern air freight, particularly regarding prohibited goods.
3. Sea:
Cost-friendly for transporting large quantities of goods over long distances. Classifications include Full Container Load (FCL) and Less than Container Load (LCL).
4. Rail:
Cost-effective, reliable option for large quantity shipments. Trains transport goods in rail cars, offering stability and consistency in transit.
How Freight is Priced: Standard Freight Pricing
Freight Classification (NMFC): Determines pricing based on commodity type and characteristics. Common method used by U.S. LTL carriers for shipping LTL within the United States
Hundred weight (cwt) Rates: Rated as a rate per pound or 100 pounds, based on the greater of the actual shipment weight (including pallets & dunnage) or the dimensional weight
Pallet Rates: Common among Canadian LTL carriers who may offer rates based on the number of pallet positions a shipment occupies in a trailer.
Handling: Ease of loading influences pricing, with more manageable shipments costing less.
Density: Weight relative to size impacts classification and pricing.
Stowability: Easily organized shipments are priced lower.
Liability: Risk factors like fragility and perishability affect pricing.
Shipment Time Frame: Expedited services come with higher costs.
Special Needs: Additional services, like lift gates or refrigeration, incur extra charges.
Average Daily Shipment Volume: Carriers may offer better discounts to shippers with greater shipment volume because it is more efficient and cost effective for a carrier to pick-up multiple LTL shipments from a single location compared to one shipment,
Preparing for a Freight Shipment:
Inventory: Confirm shipment contents and document their value.
Packaging: Proper packaging prevents damage during transit.
Choosing a Pallet: Select a durable pallet suitable for the shipment weight.
Labels: Clearly label shipments to minimize the risk of loss.
Corrugated Pads: Provide additional protection for shipments.
Shrink Wrap/Stretch Wrap: Secure shipments and protect from moisture.
Straps/Bands: Prevent movement and ensure stability during transit.
Stacking: Properly stack boxes on pallets to maximize stability.
Weighing Your Shipment: Accurate weights ensure correct pricing.
Dimensions: Precise measurements help carriers allocate space efficiently and will ensure accurate rating.
Documentation:
Bill of Lading: Essential for all freight shipments, serving as a legally binding contract and a receipt for goods.
How to Choose a Carrier Service:
Considerations: Evaluate speed, reliability, cost, and services offered.
Reputation and Reliability: Research customer reviews to gauge reliability.
Cost to Value: Balance pricing with services offered to determine value.
Proof of Delivery and Tracking: Ensure transparency and accountability with tracking services.
Insurance: Review carrier insurance policies and consider additional coverage options.
With a solid understanding of freight shipping basics and careful consideration of carrier options, businesses can streamline their logistics operations and ensure timely, cost-effective delivery of goods.
Dave Loggie
Freight shipping is the transportation of commodities, commercial goods, and cargo via land (truck or rail), air, or sea. Unlike parcel shipping, which typically involves small, individual packages, freight shipments are larger and may be palletized or crated for transport.
Freight Shipping vs Parcel Shipping
Freight shipments are distinguished by their size, weight, and mode of transport. Parcel shipments, on the other hand, involve smaller packages shipped individually, often via courier services.
Types of Freight Carriers
1. Road:
Less Than Truckload (LTL): Suitable for shipments that do not fill an entire truck. Multiple LTL shipments are often consolidated onto one truck, allowing for cost savings. U.S. carriers typically rate based on NMFC Classification. Canadian domestic carriers usually rate based on the greater of actual or dimensional weight, while Canadian-based cross-border carriers may provide rates based on the number of pallets shipped.
Partial Truckload (PTL): Falls between LTL and FTL in terms of shipment size. Transit times are typically shorter than LTL, reducing the risk of damage.
Full Truckload (FTL): Fills an entire truck and is the most efficient option for bulk shipments. While seemingly costly, FTL is efficient for direct point-to-point transport.
2. Air:
Best for timely shipments but comes with a higher cost compared to other modes. Strict regulations govern air freight, particularly regarding prohibited goods.
3. Sea:
Cost-friendly for transporting large quantities of goods over long distances. Classifications include Full Container Load (FCL) and Less than Container Load (LCL).
4. Rail:
Cost-effective, reliable option for large quantity shipments. Trains transport goods in rail cars, offering stability and consistency in transit.
How Freight is Priced: Standard Freight Pricing
Freight Classification (NMFC): Determines pricing based on commodity type and characteristics. Common method used by U.S. LTL carriers for shipping LTL within the United States
Hundred weight (cwt) Rates: Rated as a rate per pound or 100 pounds, based on the greater of the actual shipment weight (including pallets & dunnage) or the dimensional weight
Pallet Rates: Common among Canadian LTL carriers who may offer rates based on the number of pallet positions a shipment occupies in a trailer.
Handling: Ease of loading influences pricing, with more manageable shipments costing less.
Density: Weight relative to size impacts classification and pricing.
Stowability: Easily organized shipments are priced lower.
Liability: Risk factors like fragility and perishability affect pricing.
Shipment Weight: Heavier shipments incur higher costs.
Distance and Speed: Longer distances and expedited delivery options increase costs.
Fuel Costs: Fuel surcharges reflect fluctuating fuel prices.
Shipment Time Frame: Expedited services come with higher costs.
Special Needs: Additional services, like lift gates or refrigeration, incur extra charges.
Average Daily Shipment Volume: Carriers may offer better discounts to shippers with greater shipment volume because it is more efficient and cost effective for a carrier to pick-up multiple LTL shipments from a single location compared to one shipment,
Preparing for a Freight Shipment:
Inventory: Confirm shipment contents and document their value.
Packaging: Proper packaging prevents damage during transit.
Choosing a Pallet: Select a durable pallet suitable for the shipment weight.
Labels: Clearly label shipments to minimize the risk of loss.
Corrugated Pads: Provide additional protection for shipments.
Shrink Wrap/Stretch Wrap: Secure shipments and protect from moisture.
Straps/Bands: Prevent movement and ensure stability during transit.
Stacking: Properly stack boxes on pallets to maximize stability.
Weighing Your Shipment: Accurate weights ensure correct pricing.
Dimensions: Precise measurements help carriers allocate space efficiently and will ensure accurate rating.
Documentation:
Bill of Lading: Essential for all freight shipments, serving as a legally binding contract and a receipt for goods.
How to Choose a Carrier Service:
Considerations: Evaluate speed, reliability, cost, and services offered.
Reputation and Reliability: Research customer reviews to gauge reliability.
Cost to Value: Balance pricing with services offered to determine value.
Proof of Delivery and Tracking: Ensure transparency and accountability with tracking services.
Insurance: Review carrier insurance policies and consider additional coverage options.
With a solid understanding of freight shipping basics and careful consideration of carrier options, businesses can streamline their logistics operations and ensure timely, cost-effective delivery of goods.