When shipping large items or several items to the same location, it is beneficial to understand how you could save on cost by utilizing pallet freight shipping. By consolidating your goods onto a pallet, you also minimize the risk of damage to single packages in transit. A tightly bound, stretch-wrapped unit of packages or goods provides strength and extra protection, and the mobility of palletized goods provides the carrier with convenience for transportation and storage.
To understand how your goods will be transported, and subsequently, your pallet freight shipping cost, you will need to look at your product(s) from the perspective of the shipper. There are several keys to calculating pallet freight rates, and the better you understand these factors, the better you will be able to package your product for the best possible rate.
Cubic Meter Volume (CBM)
If shipping internationally or domestically, you should be aware of the CBM, or Cubic Meter volume of your pallet freight.
You can calculate the CBM by multiplying the width (W) x height (H) x length (L). If your shipment has different sized items or boxes, just measure each package and then add up the total. If using pallet shipping, you can measure the entire pallet for CBM.
If using irregular or cylindrical packages, check with your carrier to determine whether they “square” the package (the diameter is considered the width and height) or you will have to multiply the radius of the package by Pi and then again by 2. Then multiply that number by the length of the package. This will give you the volume, or CBM.
Volumetric or Dimensional Weight
Shipments that are large or bulky but relatively light for their size may be charged based on dimensional weight rather than actual weight. This creates a theoretical number to be used by carriers to account for when the size and weight are not proportional, such as a pallet of ping-pong balls. Even though ping-pong balls are very light, they still take up the same volume on an airplane as a pallet of dumbbells.
The Chargeable Weight is simply the greater sum between the dimensional weight and the actual weight. While ocean liners are less concerned about actual weight than they are volume, airline carriers are more sensitive to actual weight, and thus base their rates on dimensional weight.
Within the U.S., freight transportation is mostly handled by LTL or Less-Than-Truckload shipping. Understanding your domestic pallet freight shipping cost starts with understanding the freight class of your item(s). The NMFC, National Motor Freight Classification, published by the National Motor Traffic Association, sets the standard for shipping any range of commodities in the United States. Figuring out the freight class of your goods will provide you with a common, standardized code used by carrier companies to classify and price your shipment.
There are 18 freight classes set by NMFC guidelines based on 4 factors.
This is the primary factor in determining your freight class. Density is measured in pounds per cubic foot and will be calculated for each individual package, or for an entire pallet of items as a whole. To figure out the density of your shipment:
- Measure the height, width, and length, and then multiply them together. This will give you the total cubic inches. If you have multiple separate boxes to categorize but are combining them under the same shipment, measure each unit and then add the cubic inches to the total.
- Next, divide the total cubic inches by 1,728, the number of cubic inches in a foot.
- Divide the weight (in pounds) by the total cubic feet. This result is the pounds per cubic foot or the density.
The density gives the shipper a clear picture of how large your shipment is. When comparing prices and creating your shipping strategy, it could be beneficial to save cost by creatively manipulating the size and weight of your goods, especially when boxing and stacking your pallets.
For obvious reasons, carriers want to know how well your package or pallet will be able to be stowed alongside usually several other shipments. A stretched-wrapped pallet is a straightforward approach to storing goods on a ship, airplane, or truck, especially if it can be stacked. Unusual dimensions or hazardous materials will create extra care and increase the freight class, and therefore the cost.
As your freight is loaded and unloaded, how easy is it to handle? Pallets are very easy to maneuver unless they are not stacked or bound properly. The dimension, weight, fragility, and packaging of your items will have a factor in their freight class, and the more easily mobile they are, the less the cost.
Are you shipping perishable produce, flat screen TV’s, or an antique piano? The value of the shipment and the probability it could be stolen, damaged, or create damage to another product during the transport will be considered when creating your freight class. As you can imagine, the greater the liability risk, the higher the freight class number, and the greater the cost.
Calculating the freight class of your product based on these four factors is very important and should lead the way to developing a shipping strategy. Adjusting weight, dimensions, and packaging could possibly allow you to jump into a more advantageous freight class. Utilizing pallets are a great way to increase stow-ability, handling, and even liability ratings. Research common pallet and box sizes, and try to use the smallest size possible.
Not understanding your freight class is a missed opportunity to often times save money. Using the wrong freight class can lead to a mountain of problems, such as additional freight costs, carrier re-billing, shipment delays, invoice discrepancies, freight claim complications, and more.
Common examples of freight classes:
|Class Name||Notes, Examples||Weight Range/ft3|
|Class 50 – Clean Freight||Gravel, sheetrock, common building bricks, flour, cornmeal. Durable goods on a standard shrink-wrapped 4X4 pallet||over 50 lbs|
|Class 55||Bricks, cement, mortar, hardwood flooring||35-50 pounds|
|Class 60||Machinery in crates, crayons in boxes||30-35 pounds|
|Class 65||Car accessories & car parts, bottled beverages, books in boxes||22.5-30 pounds|
|Class 70||Luggage racks, food items, automobile engines||15 to 22.5 pounds|
|Class 77.5||Tires, bathroom fixtures||13.5 to 15 pounds|
|Class 85||Crated machinery, cast iron stoves||12-13.5 pounds|
|Class 92.5||Computers, monitors, refrigerators||10.5-12 pounds|
|Class 100||Boat covers, car covers, canvas, wine cases, caskets||9-10.5 pounds|
|Class 110||Cabinets, framed artwork, table saw||8-9 pounds|
|Class 125||Small Household Appliances||7-8 pounds|
|Class 150||Auto sheet metal parts, bookcases,||6-7 pounds|
|Class 175||Clothing, couches stuffed furniture||5-6 pounds|
|Class 200||Auto sheet metal parts, aircraft parts, aluminum table, packaged mattresses,||4-5 pounds|
|Class 250||Bamboo furniture, mattress and box spring, plasma TV||3-4 pounds|
|Class 300||Wood cabinets, tables, chairs set up, model boats, stuffed animals||2-3 pounds|
|Class 400||Bags of potato chips, deer antlers||1-2 pounds|
|Class 500 – Low Density or High Value||Bags of gold dust, ping pong balls||Less than 1 lbs.|
Many carriers offer a simplified Pallet Pricing rate, where a standard price for a pallet of goods— regardless of commodity—is charged, making it easier to calculate your shipping costs. The Pallet Pricing rate is based on the dimensions and weight of the entire palletized shipment and is set at 48” Length x 40” Width x 48” Height and less than 1650 lbs. in weight. If your shipment exceeds this standard size, your price will increase accordingly.
The Pallet Pricing rate is advantageous for your business because it saves money, but it also has other benefits for everyone involved in the transportation process. For one, a “pallet” is a common and straightforward term understood by everyone involved in the process. By using generalized terms such as this one, carriers are able to easily understand what they are getting and can conceptualize the load, which in turn allows them to make the appropriate accommodations quickly and accurately.
Additionally, you will receive more accurate freight invoices from your carrier using their simplified rate, reducing confusion about the size and weight of individual items which are subject to audit by the shipper. Your shipment’s total cubic space is more easily calculated than using several different freight classes based on the NMFC model, which can be confusing and time-consuming.
With exact weight being less of a factor, a slight increase will not generally result in increased cost. Pallet pricing allows weight adjustments to be easily incorporated, as most LTL carriers simply rate each pallet within a given range.
This method, when available, is convenient for you to shop and compare rates among carriers, giving you a clear understanding of the cost on a per-pallet basis.
When shipping overseas, international tariffs and duties must be factored into freight cost. Fortunately, there is a unified way to categorize products and therefore anticipate the appropriate tariff.
Similar to the NMFC, the international community has a system agreed upon by most trading companies across the globe. HS Codes, or the Harmonized Commodity Description and Coding System, or simply the Harmonized System, presents a standardized classification of the tariff and duty structure of over 205 participating countries. The system was first put to use in 1988 and is currently maintained by the World Customs Organization. HS Codes are used to ease interpretation of each nation’s tariffs and duties by creating a unified classification of different types of goods.
The Harmonized System categorizes approximately 5,000 commodity groups in simple six-digit codes, broken down by Sections, Chapters, and Headings. This is presented in an 8-10 numbered HS Code such as 0901. 21.0050
The first two numbers in the HS Code are the Chapter, one of 96 distinct categories. In the above example, 09 refers to the Chapter: “Coffee, tea, maté, and spices.”
The next two numbers refer to a category within any particular Chapter. In the example, 01 is the Heading “Coffee.”
The last two digits recognized by the international Harmonized Code continue to get more specific, describing sub-categories of products. For instance, caffeinated coffee beans would be listed under 0901.21, but decaffeinated coffee would be 0901.22. Interestingly, instant coffee is in a completely different Heading; 21 for “miscellaneous edible preparations.”
You may notice the HS Code in the above example doesn’t stop there. Countries will use an extra 2-4 digits for country-specific classification. For instance, the 0050 in the example is used in the United States for non-organic coffee. Because these last few digits are unique, non-organic caffeinated coffee in a different country would have the same first 6 numbers, but the last 4 digits would probably be different.
Harmonized System Sections are the broadest type of classification, and Chapters (as well as Headings and Sub-Headings) are placed in one of 21 HS Code Sections. These sections are dictated by the WCO and are unified across every member country.
The HS Code Sections are:
Section 1: Animal & Animal Products (Chapter 1-5)
Section 2: Vegetable Products (Chapters 6-14)
Section 3: Animal or Vegetable Fats and Oils (Chapter 15)
Section 4: Prepared Foodstuffs (Chapter 16-24)
Section 5: Mineral Products (Chapter 25-27)
Section 6: Chemicals & Allied Industries (Chapter 28-38)
Section 7: Plastics / Rubbers (Chapters 39 and 40)
Section 8: Raw Hides, Skins, Leather, & Furs (Chapter 41-43)
Section 9: Wood & Wood Products (Chapters 44-46)
Section 10: Pulp of Wood or of Other Fibrous Material (Chapters 47-49)
Section 11: Textiles (Chapters 50-63)
Section 12: Footwear / Headgear (Chapters 64-67)
Section 13: Stone / Glass (Chapters 68-70)
Section 14: Natural or Cultured Pearls (Chapter 71)
Section 15: Base Metals (Chapters 72-83)
Section 16: Machinery / Electrical (Chapters 84-85)
Section 17: Transportation (Chapters 86-89)
Section 18: Precision Instruments (Chapters 90-92)
Section 19: Arms and Ammunition (Chapters 93)
Section 20: Miscellaneous Manufactured Articles (Chapters 94-96)
Section 21: Works of Art (Chapter 97)
When you begin to understand the enormous effort it takes to coordinate and deliver products either domestically or internationally, it becomes easier to understand how price can fluctuate based on the controllable factors. With a little knowledge and effort, you could save your company a considerable amount in shipping costs.