Determining shipping rates for LTL freight isn’t always straight forward. There are various ways to determine fees, including a pallet shipping cost or a more complex freight cost incorporating multiple pricing elements. Shipping less than truckload (LTL) can be an expensive and slow freight shipping option, but the flexibility is helpful and sometimes it’s the only way to move the cargo in a cost-effective manner. Understanding the various pallet shipping cost options and how carriers factor into LTL shipment rates will help in planning for your shipment. Continue reading for freight shipping tips so that you can begin saving on pallet shipping.
The Importance of the Pallet and Pallet Pricing
Pallets help a shipper organize the freight and minimize damage to its cargo during transit. It also helps determine pricing, as the space used by a shipping pallet is somewhat standardized. When palletizing goods, it’s smart to use stretch wrap around it, so the goods remain securely in place. That helps protect them from damage, but also from falling off the pallet, where goods can be lost or even damage other cargo. Using the shipping pallet helps with storage as well.
Pallet pricing is the easiest way to assess the shipping rate. It’s standardized, as pallet shipping rates do not vary by factors like freight class, dimension, weight and density, but by pallet number or weight. The shipper provides the pallet dimensions (length, width and height) along with the weight. And the palletized cargo is then put into a rate bracket. If the next pallet size or weight is different, it goes into a different pallet shipping cost bracket. It’s easier to compare rates between LTL carriers, as the pricing is simplified.
When looking into LTL freight shipments where pallet shipping rates are offered, the carrier may have rules for shipment under that model. That might include the freight shipment using stretch wrap or secure strapping. The carrier may require that the bill of lading (BOL) is posted clearly on the pallet, noting that pallet rates apply. The driver might sign or account only for the pallet shipment by how many pallets there are, not the number of items on the pallet. The carrier may require that the shipper is responsible for unloading. The carrier may specify acceptable pallet sizes and maximum weight per pallet. They may not offer accessorial services, like lift gate, unloading or inside delivery.
Pallets come in varying sizes and materials. The carrier may have requirements for an acceptable pallet type for pallet shipping. The standard Grocery Manufacturer Association (GMA) pallet size is 48″L x 40″W, with heavy items not exceeding 4,600 to 1,650 pounds. More than 30% of U.S. pallets produced are GMA pallet size. But acceptable pallets can also be 42″L x 42″W or 48″L x 48″W. The slats may be 2” x 4” with the deck boards sometimes measuring 3 ½” W and 5/16” thick. The typical pallet is 6 ½” tall and weighs 30-48 pounds with no freight. The pallet weight can vary by material. Metal pallets might have a different weight than a wood pallet, plastic pallet or a paper pallet.
Pallets are made from various materials and with different features. A stringer pallet may be made from 2” x 4” slats, with slats or stringers turned on the 2” side sandwiches between the top and bottom layer on the sides and middle. A stringer pallet can be a wooden pallet, plastic pallet or metal pallets. A block pallet is the same as a stringer pallet, but the planks in the middle of the pallet are thicker blocks. Some prefer a block pallet as it may be sturdier. Pallets are built to allow forklifts to pick them up and transport them, from two or four of the sides.
LTL Freight Rates for Pallets
Cargo in full truckloads in a freight truck may be charged on a per-mile basis or may be quoted on a weight plus fuel rate. For smaller shipments, the carrier may offer LTL freight shipping rates or a pallet rate. LTL freight shipping is used for pallet delivery or any container load that is too large for parcel carriers but too small for a full truckload. Volume freight fits into this category as well, with a higher number of pallets or greater freight weight determining which cargo is LTL and which is volume freight.
LTL freight shipments are often between 151 pounds and 20,000 pounds. When a carrier is not giving a freight quote based just on pallet size and weight, the total weight may impact the pricing discounts from LTL carriers. LTL freight rates include distance and weight, but with additional factors like density and freight classification.
Freight Quote Breakdown
This is how carriers might break down freight quotes if they’re not using pallet shipping rates.
Distance: The further the distance, the more the pallet shipping cost. That’s because of labor, fuel, equipment use and opportunity cost for the driver and carrier. LTL carriers may specialize in specific regions, so that may impact which will offer freight quotes and which might transfer your pallet shipment to another carrier midway.
Weight: Carriers may use a base rate per hundred pounds, that pallet rate altered depending on the freight pickup and pallet delivery location. The higher the total weight, the lower the quote per hundred pounds of cargo. It may be worthwhile to distribute the palletized cargo differently to take advantage of weight breaks, or discounts for heavier freight.
Density and cube: Cubic meter volume is one factor in LTL shipping. Cubic meter volume is assessed by multiplying length x width x height. With pallet shipping, measure the entire pallet for cubic meter volume, not individual parcels. To determine density, divide the weight by cubic volume. Density may be used instead of weight to determine pricing.
Chargeable weight: A carrier may use chargeable weight, the larger amount of either the actual or dimensional weight. If your pallet shipment is going via air freight, the chargeable weight might be the actual weight, while via ocean freight in a shipping container, the ship would be more interested in volume and dimensional weight. A freight forwarder can help you determine these amounts.
Freight classification: Freight classification is important in LTL shipment rates. There are more than 18 National Motor Freight Classification classes, using value, product density, handling, stow-ability, and liability factors. Rates for higher classes cost more. Freight all kinds (FAK) allows products in different classes to be shipped and billed with one freight class, which can result in a cheap freight shipping cost for the shipper.
Base rates: LTL carriers determine their own base rates for each lane, the minimum freight cost to move and ship cargo.
Accessorial services: These additional services, like lift gate services, are not included in the price and are considered extra.
Fuel surcharge: Rates are set on a determined fuel rate, and surcharges are assessed to cover the difference in actual fuel rates.
Determining pallet shipping cost is easier using the simplified freight rate quote, versus the multiple factors involved in traditional LTL freight quotes. Using pallet shipping rates makes the planning process simpler for the shipper and carrier, and can make invoicing easier. The pallet shipping cost is agreed upon in advance, and slight variations in weight would not matter. If the pallet is a standard size, then the dimensions would not matter either. The invoice would be the same as negotiated before pallet delivery – no surprises.
LTL freight rates can change after the pallet delivery, however, if there are variations in what the shipper sent and what the carrier said they received. This can result in confusion and potential disagreement about the invoice. Perhaps freight classification was erroneous or the cubic volume was slightly off. The weight might be different. These can all result in audits and changed invoicing. The invoices may have inadvertent errors that the shipper would not understand or appreciate. Trying to find these errors or service level changes, especially if shipping many pallets and LTL shipments in various lanes and with multiple carriers, is a fool’s errand.
Shipware- Saving You LTL Costs
Fortunately, parcel and freight audit and recovery services can help with these issues. Using automated software like Shipware’s, invoices are analyzed daily for service level failures and invoicing errors. Identifying and investigating potential errors can result in found savings that are difficult and time-consuming to assess by employees. With the fine-tuned software, finding these errors is much easier and does not involve the shipper’s time. Shipware requests the carrier credit or refunds any errors, directly to the shipper. There is no out-of-pocket cost for this service, as the fee comes out of the shipper’s savings from the audit and recovery itself. If the shipper doesn’t realize any savings, the audit recovery service doesn’t either.
Shipware can also help with contract freight negotiation and modal optimization. Ensuring that the shipping service needs are met may include lowering the shipping cost, choosing the right carriers, and negotiating the right freight contracts. Shipware’s in-house experts come from the carrier side, where they negotiated shipping contracts on behalf of the carriers. They now use that knowledge to help shippers get the best shipping rate and contracts possible. Call Shipware to see how we can help you lower your shipping costs.