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NMFC New Rule for LTL Shipping: Supplement 5, Item 680-B, Note 2

A new rule in the NMFC may have significant consequences for LTL shippers.  This new rule went into effect on November 29, 2014 and CT Logistics has already begun to see repercussions of it.

 

NMFC, Supplement 5, Item 680-B, Note 2 reads as follows:

“Unless otherwise provided, commodities in shipping containers shall be deemed to be in compliance when filled to not less than 65 percent of the capacity of such containers.  When filled to less than 65 percent of capacity, the gross weight of the container and its contents will be subject to the class applicable to either the container or its contents, whichever is higher.”

 

The implications are that:  If there is any shipment where the freight occupies less than 65% of the surface area of a skid or pallet, it could be rated as a density item. So if you are shipping boxes of nails and the boxes take up less than 65% of the surface area of the pallet; you will likely end up paying a higher rate than the actual class of the product since the item will now conform to this container rule, the same capacity that applies to items like plastic articles or puzzles.

Because the gross weight will include the container(s) and its contents, the pallet weight will be calculated for the total weight of the shipment, including the density premium charge.

Changes like this to the NMFC are becoming more and more common as there is a push toward density based rating. What this means for shippers, who don’t maximize pallets, are higher classified shipments. The NMFC rules apply to almost all major LTL carriers. So if you have a shipment that falls under this rule you simply cannot avoid certain carriers to bypass this rule, as carriers that follow the NMFC rules do not have a way to bypass these NMFC provisions. 

CT Logistics has found examples of this new rule being applied to our clients: One example is Con-way has implemented this rule and is currently charging some shippers under this provision for pallets filled to less than 65% capacity.  Note:  The class of a standard wooden pallet is typically class 150!

If you have any questions regarding this new NMFC pallet rule or any traffic management study, please email your CT Logistics Team, salesperson or manager.