As the demand for freight shipping increases with the influx of e-commerce, and the driver shortage continues, freight pricing is moving from weight to freight density. This is because carriers that are charging shippers based purely on the weight of their product are losing space and money.
In this article, we will review exactly what freight density and dimensional weight pricing are, and how it will affect your freight costs.
Freight density is the space an item occupies in relation to its weight. This is determined by dividing the weight of the item in pounds by the volume in cubic feet. You find the total cubic feet by taking height x width x depth and diving that number by 1,728 (the number of cubic inches in a cubic foot).
For example, your 40” by 48” pallet has a height of 48” and a weighs 425lbs. (40 x 48 x 48)/ 1,728 gives you a volume of 53.33 cubic ft. You would then take your weight of 425/53.33 to give you a density of 7.97.
Dimensional weight pricing takes into account the space occupied by the package, along with its weight, rather than just its weight alone. It takes into account its freight density. Although, between the dimensional weight, and the actual weight, whichever is larger is the billable weight.
For example, if a customer purchases a pair of socks, and the warehouse packages them in a considerably larger box than needed, then the shipper will be charged much more for this package based on dimensional weight pricing. Because although the package is very light, it is taking up unnecessary amounts of space that could be used for other products on the truck.
Freight classes are designed to help form common standard freight pricing for shipments, which is useful when using multiple carriers, warehouses, and brokers. Freight classes are defined by the National Motor Freight Traffic Association (NMFTA) and are based on weight, length and height, density, ease of handling, value and liability from things like theft, damage, breakability, and spoilage. There are 18 freight classes, ranging from 50 to 500.
Your freight density is a major factor in determining your freight class. Essentially, the higher density your product is, the lower classification (typically 50-85), and the more fragile/less dense the product usually have higher classifications (usually 125-500).
Now that we’ve learned how density affects your classification, it’s time to get into how all of this ultimately affects your cost to ship. As stated above, the end price is going to be based on whichever is greater, the dimensional weight or actual weight.
When the dimensional weight is larger than the actual weight, it may seem unfair to the shipper. It will look like you are paying for imaginary weight. The important thing to remember is to make your package as small as possible. You want to make your dimensional weight smaller than your actual weight.
To sum this up, the higher your density, the less space it takes on the truck and the lower your classification, which decreases your rate for every hundred pounds you ship. In addition to cost savings, the denser your package the lower risk of potential damage.
A solid 3PL partner can help you define your class, and give advice on the best packaging for your product. In addition, they can help assist you with other ways to reduce your LTL freight costs overall. To learn how LTX can increase your bottom-line by decreasing LTL Freight costs, contact us below.