Why Accuracy Matters in LTL Pricing

Moving past estimates is the key to an accurate LTL pricing quote

Less than truckload (LTL) freight is highly efficient because it combines partial loads from multiple shippers to make a full truckload with multiple stops. The cost is based on the space you need, the NMFC freight class of shipping, and the pickup/destination locations. It’s a scalable approach. Smaller businesses especially benefit because they can take advantage of “big business” professional shipping services without paying big prices for space they can’t fill.

However, those savings could disappear if your pricing is based on an inaccurate estimate. In fact, you could end up paying much more than you bargained for.

In this article, we are going to discuss why accuracy matters in LTL pricing and how to make your estimates as accurate as possible, including:

• What to do before you start

• Incorrect weights

• Wrong Dimensions

• NMFC and commodity type

• Logistics and location

Before you start

According to a survey by SJ Consulting Group, the LTL industry has impressive billing accuracy, ranging from 94% to 99% depending on the carrier. The main contributor to this accuracy was a move away from the decades-old honor system backed by random testing, and the adoption of technology that captures actual weight and dimensions of every piece of freight. However, LTL carriers still make plenty of billing mistakes.

If your LTL shipping estimates are incorrect, your carrier will most likely catch it and adjust the billing for correct weight, size, freight class, or other characteristics.

Incorrect weights

Incorrect weights can happen because the wrong information is passed along to you, but as the shipper, you’re the one who has to pay for it. An estimate is inadequate for the LTL process. Your shipment’s total weight is used to determine the price. That price difference and a reweigh fee are additional costs to you if what you’re shipping weighs more than what you asked for in the quote. Providing incorrect weights is also a safety issue for the carriers; they need to ensure that the weight you are providing them is accurate so that they do not go over any weight limitations set by the federal and state governments.

Incorrect bill of lading weights usually occur because shippers do not have certified scales large enough to accurately measure the LTL shipment. Packaging and materials must be included in the total weight. If you’re shipping a multi-pallet load, each of those pallets will add up to 40 pounds of additional weight. Interior wooden stabilizers will increase the weight, as well. Even foam or molded plastic corner reinforcements can add measurable weight if you have a large LTL shipment.

Wrong dimensions

Keep Goldilocks in mind when working on getting a final LTL cost that matches the quote. Dimensional estimates can cause a big difference in pricing. Too little can lead to a price difference just as easily as too big.

Think of LTL like a three-dimensional puzzle. Yes, weight is a big piece of that puzzle, but so are the dimensions. Two pallets weighing the same but having a height difference of 12 inches will more than likely have different LTL charges. In this case, the shorter pallet may have a lower charge.

Make sure the final LTL charge will match your quote by sending accurate dimensions.

NMFC and commodity type

Correct weight and dimensions are big factors in getting an accurate LTL quote, but freight class matters, too. LTL freight pricing is determined by classified commodity types. The classification system is managed by the National Motor Freight Classification (NMFC).

The commodity you’re shipping has an NMFC code number. These codes are assigned by the NMFC to establish fair measures and standardize freight shipping. NMFC freight class is based on four primary factors: 

1. Density: The amount of space freight occupies relative to its weight

2. Stowability: Is it oversized, hazardous, or heavy? This makes it more expensive to stow and transport.

3. Ease of handling: If it’s difficult to handle, it will be placed in a more expensive, higher NMFC class.

4. Liability: Perishable or fragile freight needs more attention, perhaps even refrigeration or temperature control, which puts it in a more expensive, higher NMFC class.

You can have the right weight and dimensions, but if you provide the wrong NMFC code you could get an incorrect LTL quote.

Logistics and location

Weight, dimension, and class elements are key to getting accurate pricing, but you could still end up with a billing surprise if you neglect to consider added charges if your LTL partner has to pick up or drop off at a location other than a traditional warehouse.

These locations may not be able to facilitate proper loading or unloading, and extra equipment may be necessary. You’ll get a more accurate LTL quote by providing more information upfront about locations and handling logistics.

It’s all in the details. Be generous with them and be accurate with classifications, dimensions, and weights. It’ll reduce your chances of a final freight bill surprise.

Are you tired of LTL invoice surprises? Resource Logistics Group specializes in helping shippers find cost-effective and accurate LTL solutions. Read what our customers have to say about our service.