Freight Shipping Tips

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How can I save money on freight shipping?

Saving Money on LTL Freight Shipping

Major manufacturers and other companies can have annual freight shipping costs well in excess of a million dollars. If those companies are able to save ten to twenty percent on the transport of the items they ship, those savings go right to the bottom of the balance sheet as profit.

You do not need to be a freight broker or transportation expert to realize substantial savings if you understand how freight is classified and how weight can play an important part in your overall shipping costs. When items are shipped in less than truckload (LTL) quantities, the trailer can contain many different types of items.

The National Motor Classification is a reference guide that assigns a class to every item shipped. The class can range from 50-500. A lower number means that the item is shipped at a lower rate per pound. If you are able to ship an item at a lower classification, you will pay a lower freight bill.

Rates for each classification are further broken down into weight categories. You will pay more per pound if you ship 500 pounds than if you ship 5,000 pounds. When you have a load that is close to the next weight break, it is often cheaper to ship the item by its "as weight." For instance, if you are shipping 9,500 pounds of a class 70 item, it might cost you $12.50 cwt (cost per hundred pounds) at actual weight, but only $10.00 cwt if you ship it "as" 10,000 pounds.

Calculating the actual shipping charges at actual weight, it would cost you $1,187.50 (9,500 x 12.5 cwt). If you shipped the 9,500 pounds as 10,000 pounds, the same freight would only cost you $1,000 (10,000 x 10.0 cwt).

A second twist on using "as weight" instead of actual weight, is to add another item that has a low classification to your shipment to boost the weight of the main shipment up to a higher weight break. For instance, if you are shipping 3,000 pounds of a class 300 item, you can add another item that weighs 20 pounds and is a class 50 item. If you use the "as weight" and push the load up to 5,000 pounds, you will pay the lower class 300 rate on the 3,000 pounds and the remaining 2,000 pounds will be rated as class 50, a much lower rate.

Every situation is different and you have to do some quick calculations to see if it is worth boosting the weight to the next level. Depending on the class of the item and several other factors, it becomes advantageous to go to the next higher weight level when your actual weight is about 80 percent of the next higher category.

How can I avoid common problems with freight shipment?

Common Freight Problems

If you are shipping LTL (less than a full truckload), be sure you understand the route your goods will take, where and when they will switch trucks, and how long it will take them to reach their destination. Choose a shipper that will give you a tracking number, or at the very least a cell phone number, so that you can be sure of where your items are.

Before you commit to a carrier, ask about their policies in case a shipment is lost or damaged. Check with your insurance company about whatever coverage you may need.

Be sure you follow your shipper's recommendations on packing your shipment. Some shippers reserve the right to charge you for repacking a shipment that appears to be insecure.

I'm shipping freight into or out of the US. What do I need to know?

Issues with International Freight

Unless you're very familiar with the market, you will probably want to hire a freight forwarder to arrange your shipment. These companies will shop several different carriers to find the most advantageous rate and the fastest delivery.

To get an accurate quote from the freight forwarder, begin by compiling all the information you would put together for a domestic shipment: addresses, phone numbers, weight, dimensions, liftgate requirements, etc.

The forwarder may ask for a "dimensional weight." For an international shipment, multiply the length times the width times the height, then divide the result by 166. (For domestic shipments, divide by 194.)

Be sure to get a telephone quote confirmed by fax or e-mail. Ask the forwarder to include all fuel charges, customs fees,

Which freight shipper should I choose?

Choosing a Freight Shipper

Questions to ask a freight shipper:

-- What licenses do you have to ship freight? (Depending on the state, a carrier may have to have a special license to transport ANY goods for hire.

-- What does your insurance cover? What will happen if my goods become lost or damaged in during freight shipment?

-- What is the delivery schedule for my shipment? (A long delivery schedule may indicate a lack of efficiency.)

-- What is your on-time delivery rate?

-- What is your damage-claims ratio? (This is the percentage of revenue paid out as claims for damaged goods. Some experts suggest an average in the industry is about 1.25%.)

-- What level of tracking service is available while my goods are in transit?

-- What are your requirements for the packing, loading, and unloading of my shipment?

How should I pack my freight shipment?

Packing a Freight Shipment

If your goods are going in one or more boxes, be sure the boxes are new before you ship boxes; corrugated cardboard loses some of its strength with each use. If you need to use a printed or previously used box, be sure to remove or obscure any labels and bar codes.

Pack a minimum of two inches of cushioning material around each side of an item -- three inches for fragile items or cases where you're using polystyrene "peanuts," which tend to settle during shipping.

Wooden crating provides the best protection during shipping and is recommended for fragile, antique, or valuable items.

For large boxes and shipments with many items, your best solution may be a wooden pallet with the shipment loaded on top and wrapped securely with plastic overwrap.

All items should have addresses and telephone numbers clearly marked for both the shipper and receiver.

Can I ship freight overnight?

Freight in a Hurry

Most LTL (less than a truckload) carriers operate on a hub system, taking each load to a designated city and then shipping it out from there with goods going to nearby destinations.

If you are willing to pay a premium, you can find a carrier that will bypass the hubs and bring your shipment straight to its destination. Often, though, your best bet will be to choose an air freight forwarder to get your shipment there on time.

Of course, the most cost-efficient strategy is to plan so that you don't need to use a rush service. In some cases, however, such as perishable goods, it is worth every penny.

What are standard procedures for shipping freight?

Freight Procedures

After choosing a carrier for freight shipping, consult a representative to be sure you are following proper packing and labeling procedures.

Be sure you and your carrier are in agreement about the level of service required.

For instance, is there a loading dock at the start and finish of the journey, or will your goods require a liftgate? Such services will cost you more, as will any part of the journey that requires the driver to do more than drive the truck -- delivering your trade-show display inside the convention center, for example.

Also be clear on how and when payment will be made. If the driver is to pick up a check from your customer on the other end, expect a surcharge to be taken off the top.

Should I ship my item as freight or as a parcel?

Freight or Parcel?

When you have something small to ship -- a birthday present, a book, a computer -- you probably use the US Postal Service or one of the standard commercial services.

If you want to ship something that is too large or heavy to meet standard parcel guidelines, you will most likely find it worth your while to ship it as commercial freight instead.

Some freight haulers specialize in LTL (less than truckload) shipping, combining your goods with others going to a nearby destination at the same time.

If you ship a full truckload (FTL) instead of a partial one, it is likely to cost less per pound, take less time, and your goods will stay in the same trailer until they reach their destination.

What sort of insurance should I use to cover my shipment?

Insuring Your Freight Shipment?

Licensed freight carriers are required to carry insurance on the goods they ship, but this insurance can be as little as 10 cents a pound. (The exception is some "factory new and factory packed" items, which carriers will insure for up to $25 a pound.)

To protect yourself from losses if your shipment is lost, stolen or damaged in transit, you may wish to consider purchasing extra insurance.

First, however, consult your insurance agent. Your business coverage or homeowner's policy may already cover the sort of shipment you have in mind. In some cases, your credit card company may also insure goods in transit.

What factors will affect the price of my shipment?

Factors that Affect the Price of Your Shipment

When you're mailing a birthday present, it's relatively easy to figure out the delivery charge. Freight shipments are much more complex.

The American Trucking Association publishes a National Motor Freight Classification system, which rates shipments on a scale from 50 to 500 according to their density, value, fragility, and storage requirements. Higher numbers indicate a higher per-pound shipping cost.

To find out the NMFC classification for your shipment, you'll need to know its dimensions and at least its approximate weight. Ask your shipper to help you determine the proper number. Including your NMFC number on your labels will help ensure your shipment is properly treated and billed.

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