Monday, March 30, 2009

Determining Freight Class

Trying to understand how freight company's class packages for shipping can be a bit confusing, but it is not as difficult to ascertain as one might imagine. Often time's calculations have to do with weight and whether or not the item is commercial or residential in nature.

Primary consideration for evaluating shipping classes include:

Density and weight

In order for the carrier to ascertain how shipments will be situated inside the transportation vehicle they have to assess your package in pounds by cubic feet. Extremely dense items such as equipment or heavy metals may receive low classifications and be the least expensive to ship.

Damageability

Extremely fragile items or those that can be easily damaged in transit are classed far differently and are more costly to ship. Bulky items may also be considered high risk and fall into this type of evaluation. When calling around to see which freight company you wish to use, be sure to tell them what you wish to ship. A reputable company should be able to give you a cost estimate for free.

Truckload pricing

If you choose to use a trucking company to ship your item, you may be able to get an affordable cost per mile rate. This is often calculated by a carrier who utilizes computer technology to get the best competitive rates. Go over their cost estimations so that you better understand associated pricing and won't get any nasty surprises upon final billing.

Contractor pricing

Commercial institutions who do a lot of shipping can usually obtain "Freight All Kinds" or "FAK" rates due to continuous bulk shipping. Sadly, regular individuals cannot take advantage of this type of pricing, largely because it is not in the freight company's advantage to give large discounts for single shipments.

Discount Pricing

That said, there are ways to obtain discounts even if you aren't a large company. These discounts can vary from freight carrier to freight carrier and will depend on what you want to send.

If you really want to find the best deals, you may wish to locate what is commonly referred to as a freight Broker. This broker can lower your overall cost because, just like a company that supplies the shipper with constant business, a broker can provide the necessary volume that effectively lowers pricing.

The great thing about dealing with the broker and not the shipping company itself is that you can negotiate an even lower rate on top of the automatic discounted rates.

To locate a fine broker, you can do an Internet search or ask friend or relatives who have used a reputable one in the past.

Avoiding damage

After evaluating the various opportunities available to you regarding shipment of your extra large item, make sure your shipment arrives in once piece. The best way to do this is with the appropriate packaging. While some shipping companies will offer to package your product for you, some do not offer this service.

If the item is too big for you to package alone look into crating companies and be sure to add this costs into your shipping budget.

Some companies offer airtight guarantees on their shipments, but these guarantees may be null and void if you improperly pack the item yourself so it may be to your advantage to consider a packing company regardless.

In the end, make sure you understand any added fees and charges that may be applied to your account before agreeing to anything.

With the right attitude and a proactive consumer approach, your parcel will arrive safe and on time to its designated location and you will have the name of a reliable carrier in your mental rolodex the next time you need something massive shipped.

Sunday, March 29, 2009

How Does 3rd Party Insurance Work for Freight?

Freight Insurance

When dealing with the freight industry, it is helpful to understand the responsibilities of:

* Your Logistics Company
* The Freight Carrier (The company that actually transports your shipment)
* And the Freight Insurance Company (Freight insurance provider)

THE LOGISTICS COMPANY:

FR8SHIPPER.COM is a logistics service and freight brokerage. As such, our function is to provide access to major freight carriers. In many respects our relationship is very similar to a travel agency, we help you find a carrier, but we are not the actual carrier. We never see nor handle your shipment. Your freight carrier is the company that did the actual pickup, transportation and delivery of your shipment. In the event of damage to your shipment, it is the responsibility of the carrier, their insurance company, and your private insurance to rectify the damages.

THE FREIGHT CARRIER:

The freight company that actual transported your shipment is exclusively responsible for it's transportation and delivery. (See documentation provided at time of shipping)

THE FREIGHT INSURANCE COMPANY

In addition to the general limited liability coverage offered by all US freight carriers, some shippers will optionally purchase additional insurance coverage from a freight insurance provider.

Your freight insurance company is the company that provides insurance coverage during transit with the freight carrier. This coverage is purchased independently from your logistics services and the freight carrier. If you have experienced loss or damage, you must contact your freight insurance company directly.

OTHER SOURCES OF FREIGHT INSURANCE

You may also discover that you already have some level of insurance already in place. Many personal and business insurance policies cover losses under "general loss" or "property in transit" coverage.

You may find your Credit Card company provides some level of coverage when you use their card.

You may choose to secure additional insurance from your personal, household or business insurance provider.

You may choose to purchase additional insurance directly from Freight Insurance Company

Or you may elect to move your freight using only the limited liability coverage provided by the freight carrier.

Neither you or the insurer are obligated. Insurance will not be enforced until:

You have reviewed, approved and returned the quote and the documentation that is being prepared for you

The insurance provider has also reviewed, approved your coverage, and sent you a Statement of Coverage.

Your Statement of Coverage has been returned to you and is in hand. You will not be able to process a claim without your Statement of Coverage.

Saturday, March 28, 2009

Packaging Tips

This includes all items that have been shrink wrapped and/or are on a pallet. Usually weighing in the 1,000’s of pounds.

TIPS ON WRAPPING A PALLET

1. Be sure to place your shipment on a pallet that is in decent shape. You don't want something that will fall apart in transit. Try to find a pallet that is just the right size to accomodate the amount of boxes or other materials you are palletizing. This will help to save you from tearing the plastic film on sharp corners of the pallet.

Try to place the items on the pallet as close to one another as possible. If they have room to shift around after you've applied the shrink wrap the entire unit will become loose and ineffective. Brace items against one another.

2. Set your pallet to be wrapped on top of other empty pallets. This will make it easier to wrap since you won't need to bend over so far. It helps to set your pallet diagonally at a 45 degree angle rather than square on the stack (so that the bottoms of each corner overlaps the top edge of the stack beneath). Make sure the pallet does not wobble up there!

3. Take your shrinkwrap roll and peel out a couple of feet of wrap. Squeeze 8 inches or so of the end together into a loose rope shape and thread this through and around one corner of the pallet. Don't try tying a knot. Simply hold the end snug as you fold the rest of the yard over it. The plastic sticks to itself so this should be sufficient to keep it from pulling loose when you begin to wrap.

4. Wrap around the base of the pallet in the same direction that was begun when you made the fold. Ensure that you wrap the base enough times so that your plastic will not slip off. This is the most important step since the goal is to keep your goods on the pallet. Wrap that base at least four or five times, being careful to allow the edge of the wrap to go underneath the corners. Pull the roll tightly just before going around each corner.

5. Basically you want the entire pallet to feel like a unit. Everything should move as one, without wobbling. With that in mind, work your way up from the base so that the bottom boxes are first to be "married" with the pallet. Continue wrapping so that the next layer is joined firmly to the first and so on. Be sure to take as much stretch as possible out of the plastic film while you are wrapping.

6. When you reach the top of the pallet you can either end there or wrap back down the pallet again. To decide what is needed, try pushing the upper boxes to see if the load seems tight or loose. If you see the plastic ripple or the stack wobble, you either didn't wrap tightly enough or it needs more layers. Go around it a few more times, working your way back down to the base.

When the stack is firm, tear the film apart from the roll and fold the end of it under the edge of one of the wraps at the side of the pallet. This will keep your wrap job from coming undone.

Friday, March 27, 2009

Shipping Tips

When shipping an item via Motor Freight take the time to compare all the options available to you. Be an informed shipper!

How Freight Pricing Works
Less than Truckload companies use several methods to determine the price they charge ship an item for you. The most common is Freight Class. The Federal Government issues a publication called the “National Motor Freight Classification” or NMFC. This serves as the rule and guide to the trucking industry and is used to determine the “classification” of shipments. The price you pay to ship an item is directly tied to its stated freight classification.
Shipment density is calculated to determine how many pounds per cubic foot your item is. This tells the carrier how many other shipments will practically fit into a trailer with your shipment in order to fill trailer. Dense items such as building materials, steel, engines, machinery, ect have low classifications such as Class 50 thru 85. The lower numbered classes are the least expensive to ship. Another factor that determines freight class is the item’s likelihood for damage. Fragile or bulky items fall into freight classes 125 to 500, and account for the highest of shipment cost. Your service provider should be knowledgeable in determining freight classifications and assist you in determining the freight class free of charge.
Brokers sometimes have been granted “FAK” or “Freight All Kinds” pricing with the carriers they contract with. What this means is higher classed items are shipped at a lower cost classification. As an individual shipper, the only way you can benefit from this type of pricing is to utilize a broker. Trucking companies do not offer this type of discounted pricing to private parties EVER!
Full Truckload pricing is generally computed by the mile. The trucking company factors the operating cost per mile, adds a markup which totals the rates you pay.

Obtaining Discounts:

More often than not you will realize a big savings by dealing with a freight broker instead of contracting directly with a trucking company. Brokers can instantly shop the marketplace and obtain lower rates for you than if you tried to hire a trucking company yourself. In the Less than Truckload marketplace, private individuals are usually only provided a "Courtesy Discount" from the carrier's published rates. By using a freight broker your pricing will be lower than dealing direct with the carrier because the broker's pricing is based on the shipping volume he provides the carrier. Brokers typically receive 50% to 85% discounts from published rates, where a private individual may only be offered 5%-30% discount by the carrier. Don't be afraid to negotiate with the broker on the price they give you, they are making a profit on your shipment and may be willing to negotiate the shipping cost with you. The worst they could say is no right?

Do Your Homework

Shop smart when pricing your shipment cost by sampling rates from several brokers. By obtaining rates from a few different providers, you will find quite a contrast in the pricing they offer. Ask the Broker or Forwarder for a copy of their Federal Operating Authority. Freight brokers / forwarders are required by Federal Law to be licensed by the Federal Highway Administration. Avoid unlicensed brokers and forwarders, if they working outside the law by not having a Federal Operating License, you will have no protection in the event of a problem. The internet is full of websites operated by unlicensed and inexperienced brokers and forwarders. Be sure to question the broker as to the amount of insurance coverage they will be offering on the shipment. Don't make the assumption that insurance is provided. Many providers offer little or no cargo coverage, and in the event of a damage claim, you may find yourself having to file a claim with the carrier directly without the assistance of the broker. Ask the broker the procedure they have in place regarding freight loss or damage claims. If they do not have a solid plan in place, BUYER BEWARE!


Accessorial Fees and Cost Saving Tips

Every time the trucking company performs any sort of special service outside their normal duties, additional fees are usually accessed. The amount of these fees varies by provider and quite often can exceed the base cost of shipping!
Liftgate:
This is a service that assists the driver in loading or unloading his truck when a loading dock is not available. The Driver’s trailer is equipped with a hydraulic ramp that lowers to the ground. Lift Gate service is almost always billed on residential pickups or deliveries and in commercial pickup and deliveries where loading docks or forklifts are not available. Only a small percentage of the trucking company’s trailers are equipped with liftgates so be sure to notify them of your need for one in advance.
Residential Pickup or Delivery:
Anytime a trucking company must pickup or deliver into a residential area a fee is charged. This is because in most cases the local laws restrict the size of delivery trucks causing the carrier to utilize a smaller truck to service a residential area. Smaller truck requirement equals less shipments per day picked up and delivered hence the fees are assessed to offset the carrier’s losses.
Appointment or Notify Pickup / Delivery:
By default, carriers make picks and deliveries in order arranged by geographic location (a route). If your shipment requires the carrier to call ahead, or schedule and appointment, the charge an additional fee for this service.
Inside Pickup / Delivery:
By requiring the truck driver to pickup or deliver inside a building his route takes longer to complete. The carrier will charge an additional fee for this service.

Cost Saving Hints:

Many carriers allow pickups from or deliveries to their terminals. By doing this, you remove any accessorial fees that would normally be charged for liftgate, residential pickup / delivery, inside pickup / delivery or appointments. Your provider will be able to provide you the address and phone number for the closest shipping terminal to the origin and destination.


Tips to Avoid Shipping Damage

Unlike small parcel shipping via USPS, Fed EX, UPS and DHL shipping freight yields a much higher likelihood of damage. The common misconception is that packaging is not required, or minimally required. Always ask the broker the packaging requirements for the type of freight you’re shipping. The trucking company that picks up the item may refuse to pickup if the packaging is not up to standard. They do this to avoid freight claims and the potential of damaging your item. Trucking companies don't want items to get damaged, so packaging guidelines are in place to prevent damage whenever possible.

The #1 reason for denial of freight damage claims is IMPROPER PACKAGING.

If the carrier deems the packing of your item to be below standard, they have the legal right to deny your damage claim. They also have the law on their side, so don't think your lawyer will be able to help you.

At a minimum your item should be secured to a wooden pallet. The pallet should be a minimum of 4” larger than the item secured to it on all sides. Trucking companies load and unload their trucks with forklifts and pallet jacks. Sometimes a dock worker will try to slide the lift truck forks under and item not mounted on a pallet which causes damage in most cases. Should this cause damage, the carrier will yell “improper packaging” and accept no responsibility for the damage. When freight is loaded into a truck it will shift and move around slightly while going down the road. By using a pallet should your item shift the pallet will in most cases prevent or reduce damage.

Rarely do trucking companies pickup at your door and go directly to the destination address. Instead, your shipment will go to a local warehouse or transfer facility where it will be unloaded from the pickup trailer, and sorted based on its final destination. Once sorted it is loaded onto another trailer along with other shipments heading the same direction. It is not uncommon for a shipment to ride on several different trailers prior to reaching the final destination. This is done to allow the trucking company to maximize the use of trailer space on each shipment, but at the same time greatly increases the opportunity for damage.

The best option is to have your item packaged in a wooden crate with a pallet used for a foundation. This provides the maximum protection you could ask for. The internet offers a wide range of crating and packaging services available to the general public. Think of these services as insurance policies. If you spend $750 or more on an item is it worth $100 or so in packaging costs to make sure it arrives undamaged?

Thursday, March 26, 2009

Spending too much for freight?

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