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Freight – The Wonderful World of Freight

10.19.2007 · Posted in Transportation Articles

The world of freight and shipping is an exciting and very broad field of activity. Whether you are thinking of becoming a shipper, a broker, or planning on shipping something yourself, there is a lot to learn.

Freight is a term employed to classify the movement of commodities and is commonly a commercial process. Items are for the most part listed into various shipment categories before they are sent.

This is dependent on a lot of factors:

The nature of the item being carried, i.e. a kettle could be expected to fit into the class ‘household goods’.

– Item size and number.

– How long the item for sending will be in transit.

– Cargos are generally tagged as household goods, express, parcel, and freight Goods.

Fine art, furniture items, and such things will normally be referred to as household goods.

Most small business or personal items, for example envelopes are considered as “overnight express” or “express letter items”. They are rarely over a few pounds, and almost always get sent in the carriers typical packaging. Depending on your choice as a shipper, the level of service varies.

Air transport is the normal choice for “Express” goods, at least for some portion of the journey. Even the humble envelope can arrive overnight or could take days.

Parcel or ground dispatches is the name given to bigger items such as small boxes. Weighing less than 50Kg, and with no single item over 35Kg. Boxing is the normal choice for these shipments, sometimes the shipper does this and at other times the carrier provides the boxes.

Service levels are again varying; but just about all ground consignments will move around 500-700 miles per day, going seashore to coast in around four days depending on origin. Parcel payloads do not usually move by air, and ordinarily move thru road and rail. Parcels constitute the absolute majority of business-to-consumer (B2C) loads.

Aside from Household goods and Parcels, the next categories are described as “freight”.

1. Less-than-truckload (LTL) freight:

LTL, Less-than-truckload generally means a 28 foot trailer used to capacity or less. Packaging and size requirements are similar for LTL shipments and air cargo. LTL represents the majority of freight shipments.

2. TL – Truckload freight:

Anything larger than 15,000 pounds will be classed Truckload (TL) in the United States of America. The most economical way to ship this size is on it’s own truck rather than sharing, like the LTL shipments.

80,000 pounds is the maximum weight that a truckload TL can be legally. That is the weight including the weight of the tractor trailer. Huge savings in shipment costs can be made by large companies by taking advantage of TL shipping, and it is very common to see these today, and it appears to be increasing. Under the current U.S. truck pricing model, adding more to a load costs nothing more.

Schemes for increasing load size include precise calculation of the load within the equipment specifications. This is predominantly done by taking demand from, for example, a Distribution Resource Planning system or a Vendor Managed Inventory system. When sending freight, it is highly significant to realize the facts about pricing, claims, and insurance.

How freight pricing works:

Often, an LTL shipper may realize savings by utilizing a freight “broker,” online marketplace, or other intermediary instead of contracting directly with a trucking company. Brokers can shop the marketplace and obtain lower rates than most smaller shippers can directly.

These discounts are negotiated by the shipper with individual LTL carriers. For example, a given LTL lane may have a rate of $50 cwt. If a shipment is 1,000 lbs at class 70, then the adjusted base rate is $35 cwt (70% of 50 cwt) or $350. If the hypothetical shipper had negotiated a 50% discount on published tariff rates, this would give a final price of $175 for the shipment.

To save on several charges like the lift gate, residential pickup/delivery, inside pickup/delivery or notifications/appointments costs, one can collect shipments at the carriers terminals.

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