Freight shipping, in theory, is a rather simple concept. The idea is to move a large shipment of goods from point A to point B in the most efficient manner possible. However, the logistics involved in making these transfers a reality can pose a real challenge.
Freight shipping involves a number of different modes of transportation; namely trucks, boats and airplanes. Understandably, managing the transport of large shipments between these vastly different modes of transportation and delivering them in a predictable, timely manner requires a great deal of care and cooperation. Fortunately, the freight shipping industry, with direction from the Department of Transportation and the National Motor Freight Traffic Association, has devised an efficient method that allows even the newest business owners or consumers to make freight shipments. Here are some of the most important things to consider when arranging a freight shipment.
Verify Your Carrier’s Authority
The first thing you will want to do when arranging a freight shipment is to verify the authority of the carrier you are considering for the job. To verify a carrier’s authority, you will need the number issued to them by the United States Department of Transportation (USDOT) as well as their MC number. All carriers are required to be authorized by the Department of Transportation, so they should have this number readily available. The only exceptions to this rule are for freight forwarders, and freight brokers, which serve slightly different functions—these may have MC numbers only. You may look up the credentials of any company using either of these numbers, or by the company name.
Verify Your Carrier’s Cargo Insurance
The next step in the process is to verify your chosen freight carrier’s cargo insurance. Every authorized freight hauler is required to carry a minimum amount of insurance to protect all parties from misfortune during transit. If you are shipping items that are particularly valuable, or not easily replaceable, you may want to consider purchasing additional insurance from a third-party insurance provider.
In addition to verifying the degree to which your shipment is insured, it is also important to consider your carriers track record for delivering shipments safely. The key statistic to look for here is the company’s claims-to-damage ratio. This ratio is generated by analyzing the number of insurance claims paid out due to loss, damage, or theft of parcels under that company’s care. To be considered reliable, a company should be able to show a claims-to-damage ratio below 1.5 percent.
Verify Your Carrier’s References
There is a multitude of ways to verify that your chosen carrier is a reputable one. Start with a basic web search on your favorite search engine to look up the company’s customer-related feedback and transaction history. By reading these, you should be able to ascertain whether or not the company has a strong reputation amongst fellow transport companies and whether they are held in a positive regard by those who have utilized their service in the past. Any reputable carrier should have no problem furnishing you with positive references from past customers. If you find that they have mixed or poor reviews from either their colleagues or previous customers, you may want to reconsider using that carrier and begin researching other options. If you have any doubt as to the reputability of your chosen carrier, consider looking them up on the Better Business Bureau website to see if any formal complaints have been lodged against them.
Are They The Best Freight Carrier for Your Needs?
While a freight carrier’s professionalism and reliability are both easily attained and important considerations, they are not the only items to consider when arranging a freight shipment. It is most helpful to start by reviewing the projected transit time and number of transfers your parcel will make between pickup and destination. These numbers will vary from carrier to carrier and also depend on the specifics of your package including:
- Overall size
- Package Density
- Ease of Handling
- Special needs such as refrigeration
- Special handling needs such as a lift or crane
- Hazardous Contents
If your carrier quotes a particularly long transit period or multiple transfers along the way (known as “interlining”), this may be an indication that another carrier may be a better option. As a rule of thumb, attempt to hire a carrier that will minimize the amount of interlining involved in the transportation of your shipment, as each transfer requires additional transit time and typically involves additional cost.
On-Time Delivery Rate
Another useful metric to consider when choosing a carrier is the rate of on-time delivery. This statistic keeps track of how often a freight carrier successfully delivers cargo within the quoted timeframe. While unpredictable weather, interlining and other holdups pose a threat to on-time deliveries, the best carriers will take these possibilities into account when quoting transit time and deliver with consistency. When considering a company’s on-time delivery rate, look for a mark somewhere above 90%. Company’s reaching the 90% mark or higher may be considered reliable.
Create a Bill of Lading (BOL)
Your Bill of Lading is the single most important document involved in the transportation of your shipment. The Bill of Lading is a legally binding document that acts as a contract between a freight shipper and carrier and also acts as a document of title. The Bill of Lading provides both the driver and carrier with all information necessary to process and properly invoice each freight shipment.
What Information is in a Bill of Lading?
Currently, most services will automatically generate a Bill of Lading for you based on a standardized questionnaire that you fill out up your initial request for service. This helps to ensure that all necessary information is accounted for and processed in a uniform manner. Items found in your Bill of Lading include the following:
- Names and addresses: The full legal names of both parties, the shipper and consignee (receiver) should be included legibly on the Bill of Lading. If for some reason a shipment goes awry, these are the names used to establish title and produce the shipment to its rightful owner.
DateThe date on the Bill of Lading will reflect the pickup day- the day that a shipment embarks from the shipper. This is the date that will be used to reconcile shipping invoices and track freight shipments.
- Description of Contents: In this section, the shipper should provide all pertinent details pertaining to the contents of their shipment. This should include the dimensions of the package, the number of shipping units, the overall weight, as well as details regarding the material and makeup of contents.
- Packaging Type: This section will describe the packaging of your shipment. Common packaging options for freight shipments include pallets, drums, crates and cartons.
- NMFC Freight Class: There are 18 different freight classes that the NMFC (National Motor Freight Classification) system uses to determine the cost of a particular shipment. Shipments are classified based on the combined input of physical dimensions, overall weight, density, ease of handling, storage capability, value, and liability- which takes into account possible health hazards due to the nature of contents, and other considerations.
- Department of Transportation (DOT) hazardous materials designation: As alluded to above, hazardous shipments are handled uniquely, which is accounted for not only in the price tag but also in the manner of handling. A hazardous shipment must be clearly designated in the Bill of Lading and carriers must follow special rules and requirements during transit.
- Purchase orders or special reference numbers: These numbers are typically used by shippers and/ or consignees for the purposes of releasing orders for picking up or accepting them at delivery.
Calculate Your Freight Class
In order to complete the accompanying section on your Bill of Lading, you will need to calculate your shipment’s NMFC Freight Class. As previously mentioned, most professional carriers will be able to help you with this by taking into account your shipment’s density, stowability, handling and liability. As any of these poses greater challenge or risk to the carrier, the freight class and cost of transportation also rise.
The manner in which your shipment is packed has a profound influence on both the pricing of your shipment and the reliability with which your shipment can be delivered. The following are some of the most common packaging options that you might choose for your next shipment.
Pallet shipping is the most commonly used method in the freight shipping industry. A standard pallet is a 40 x 48 inch portable, wooden platform that is used to package items that do not need to be enclosed. Though the 40 x 48 size wooden pallet is the most common, pallets may also be made in other sizes and, more seldom, other materials. Pallets are important for a couple of reasons. First, they make items easier for carriers to load and offload. Pallets create a uniform space under each load for a fork lift or other machinery to fit into and move your shipment as easily and efficiently as possible. Additionally, use of pallets greatly reduces the risk of damage to your shipment, particularly the bottom portion where a lift slides underneath.
Crate shipping, while less common than pallets, is widely used in freight shipping. In addition to the protection and ease of use afforded by pallets, crates offer additional protection to the top and sides of a load and offer greater stacking capability for carriers.
Know Requirements for Shipping Locations
This is the type of the information that may be overlooked in the process of arranging freight shipping, particularly by first-timers. We assume that places like warehouses and grocery stores will have shipping docks where they handle shipping and receiving, however not every location is so equipped. As a measure of courtesy, and a means of keeping costs as low as possible, be sure to familiarize yourself with the specifics of each location involved in the delivery of your shipment. Some places may require a hydraulic lift, fork lift, boom or crane in order to deliver or receive your shipment. If accounted for in the Bill of Lading, these services can be arranged ahead of time and the cost on your end can be minimized. If these arrangements go unaccounted for, carriers and consignees may be forced to improvise, resulting in a steeper price adjustment on your end.
Freight Rate Calculation
Once you have nailed down all the details of your shipping route, method and packaging, you will want to calculate the total cost of the endeavor. At this stage it is extremely important that you verify every detail included in the Bill of Lading so as not to incur additional fees down the line. Carriers are subject to regulations on the roadways, shipping lanes, and airways that they use to transport freight, so any violation that results in a fine on their end will most certainly be reflected on your end with a price adjustment. To avoid this, be sure that all weights and measurements have been recorded accurately in the Bill of Lading. Also, be sure that all handling instructions and loading/unloading needs are also accounted for, as any inaccuracies could result in damaged freight or a delay in delivery. Be sure to account for all of these so that you can accurately project costs and protect your bottom line.
Ultimately, whether you are a private party or a new business making your first freight shipment, your overriding concerns are going to be to move your freight safely with the lowest possible cost. By carefully researching the different carriers available to you, you greatly reduce the risk of your shipment going awry and increase the odds that it will be delivered in a timely manner. Remember to take care in the preparation of all documentation, particularly the items listed in the Bill of Lading, and take the time to make informed decisions so your operation may continue to run smoothly.