Freight of All Kinds

What is Freight Classification?

Before discussing how FAK functions, here is a quick refresher on how freight is classified and priced.

The National Motor Freight Classification (NMFC) system defines standard pricing for carriers transporting freight. Items are sorted into 18 classes, ranging from 50 to 500, and based on four factors: density, handling, stowability, and liability.

Lower-numbered classes are more favorable for shipping due to their density, durability, and ease of handling. In contrast, higher-numbered classes are less dense, more fragile, and difficult to handle, so carriers try to avoid shipping them when possible.

Freight class notifies carriers about what kind of goods are being shipped. It also allows carriers and shippers to negotiate fair rates for shipments. When standard items have set prices, it’s easier for shippers to determine if a carrier rate is too high or low for the shipped item.

This is, of course, if each shipment contains the same items. But what happens if you have multiple types of items in one shipment? This is where FAK comes in.

How FAK Works

Let’s say you’re moving from one office to another in another state and shipping your items via freight. You fit your computer, monitor, metal filing cabinet, work desk, and a new, unassembled desk chair on one pallet. What freight class would a carrier assign your shipment to?

This would be a tough call for carriers, as each item on the pallet has a different freight class. You can’t assign one of the freight classes to the entire pallet and be done with it, as that could risk damaging any fragile items in the shipment. However, you also can’t price each item individually, as that would jumble up the classes and cause billing issues and lots of paperwork.

Instead, the carrier and shipper average the freight classes into one tariff. This price is negotiated between the carrier (or broker) and the shipper, with the four freight class criteria playing a role in the finalized rate. The shipment is then classified as “freight of all kinds” and shipped as one single shipment.

• Shipments with multiple items within each pallet
• Items with similar stowability (how easy is it to stow cargo in a container or trailer)
• Shipments that have a reasonable liability insurance cost

However, not every shipment containing multiple items simultaneously qualifies for FAK rates. Shipments that don’t usually receive FAK rates include:

• High-value items
• Hazardous materials
• Oversized items
• Very sporadic product densities