7 Components of an LTL Freight Quote

Timothy Dooner • February 8, 2019

(Listen to this article at 13:44 on the above player)

When's the last time you received a freight quote and wondered, "Where in the blue hell did that number come from?" Less than truckload (LTL) shipping can save companies a fortune in freight spend but first we need to understand what components determine the cost. If you're used to full truckload shipments you're likely thinking in prices based on a per-mile or per-hundred pound basis plus a fuel surcharge (FSC). LTL rates are a bit more involved than that and require us to fill in a few more blanks. Since shippers often have a diverse and wide range of needs that directly influence all of these factors it's important to review them all in order to arrive at the most cost effective solution for each move.

Here are 7 of the key components that make up the cost of an LTL shipment :

1. Classification of Freight What are we moving? Just as US customs has a classification for all goods entering the country, every piece of LTL freight has its own as well. The National Motor Freight Classification tariff breaks it down into 18 different classes ranging from 50-500. A higher class means a higher rate for every hundred pounds moved. The four characteristics you need to know in order to classify your freight are.

Density and value (i.e. $ + cubic feet Length x Width x Height/1728)

Stow-ability

Handling

Liability

The buck stops here. If a product is moved under the wrong classification it can cost you money in one of two ways:

(1) overpaying on a higher classification and/or
(2) violation of transportation law which can result in hefty fines.

2. Weight How heavy is it? Typically, the more it weighs the less you pay as LTL rates are often structured around weight breaks. Weight breaks are cost tiers set by the price per hundred pounds. As you meet the minimum for each tier and your weight goes up the cost per pound goes down.

3. Distance Where's it headed? This is important for a variety of reasons. First being that the longer the haul the higher the price per-hundred weight will be. The second is that many carriers are regionally based. This means that they only service specific zip codes or geographical regions. So, if you're sending a shipment to a zone outside your carrier's service point than it will be transferred to another trucking company. This is known as interlining. Interlining often increases both risk and cost as you're adding additional hands to the move as well as having to pay rates based on the secondary carrier.

4. Minimums The cost to turn the key in the ignition. Almost all carriers are going to set a floor to make a move worth their while. This is the absolute minimum charge (AMC) that you'll pay. The charge is as it sounds. Anything at or below a certain threshold will cost x amount. During annual contract negotiations this is often a number that carriers will try to add to as minimum weight shipments drive up their cost.

5. Base Rates Your basic "off the rack" rates. When spot quoting or trying to get a ballpark figure carriers will offer up their own base rates. These rates are quoted per 100 pounds (CWT). Base rates may go up and down depending on the space each carrier has available and can vary widely between lanes.

6. Freight All Kinds (FAK) One size fits all. FAK freight can be negotiated between the client and the carrier to allow multiple classifications of freight to move under the same tariff/rate. Let's say you ship goods that range from class 50 to 150, you may want to negotiate an FAK classification of 100 for all shipments within the range. This could lead to significant savings (or over payment) if arranged properly.

7. Accessorials Everything else. Accessorials cover a wide array of charges from the typical to the esoteric. What you'll almost always see is a fuel surcharge (FSC). Beyond that some common charges are residential pickup or delivery, lift gate, special equipment, etc. Accessorials should not be ignored when negotiating rates as they can be reduced, flat-rated, or even removed. In addition, if a carrier isn't informed that they'll need any special equipment this can lead to delays, delivery failure, lost time, and added fees.

Companies looking to protect themselves from market volatility and reduce freight spend can benefit greatly from reviewing their current LTL offerings. An outside service like a 3PL or a 4PL may be able to help you negotiate discounted rates along all of your lanes from a deep pool of carriers.

Think it's time to get the best value possible for your LTL freight? Reach out to us today for a free consultation.

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Brendan Lawler Joins FreightPlus as Senior Manager, Strategic Planning and Customer Service

October 4, 2022

Innovative managed transportation provider continues to invest in hiring and developing the best talent within the logistics space QUINCY, Mass — FreightPlus, a data-driven managed transportation solutions provider, announced Brendan Lawler has joined as Senior Manager of Strategic Planning and Customer Service. Lawler brings in over seven years of experience leading diverse, cross-functional teams in challenging, chaotic, and ambiguous environments. In his new role, Lawler will own all aspects of planning, optimizing, appointing, tracking and servicing customers’ freight. He looks forward to standardizing the planning and customer service functions within the department and incrementally improving the throughput of the team through process improvement and technology integration. “I am energized by the opportunity to help continue FreightPlus’s growth as a data-driven transportation management solutions provider,” says Lawler. “I’m eager to use my experience in leading teams toward operational excellence to enhance the customized service for our clients. FreightPlus's mission to ‘simplify complex logistics together’ embodies the people-driven culture that I value so deeply. I look forward to joining a company that is team-focused and has a proven track record of transforming ideas into innovative solutions that create sustainable impact.” Lawler previously served as a Captain in the Marine Corps and as Senior Operations Manager within Amazon Transportation Services, where he focused on driving operational excellence and utilizing new technology to drive process improvements. In his tenure, he was responsible for developing and implementing new network-level process improvements for both under-the-roof (UTR) and over-the-road (OTR) operations, as well as spearheading the effort of optimizing the synchronization of warehouse and transportation operations. With revenue and employee count quadrupling over the past five years, FreightPlus was listed no. 184 on the Inc. 5000 list of fastest-growing private companies in America in 2022. Chief Operating Officer Ben Graeff comments, “I am so excited to welcome Brendan to FreightPlus. Brendan brings a deep background in operational excellence from his time in the Marine Corps and Amazon Transportation. He is a quiet leader that leads by example, lives in the day-to-day details, and is the exact right person to help us scale our operation and customer service teams through our continued growth.” About FreightPlus FreightPlus is an industry provider of data-driven transportation management, offering businesses customized and fully tailored managed transportation solutions in a boutique environment where clients get the individual attention they deserve. FreightPlus combines first class customer service with innovative technology and industry best practices to help mid-size and growing companies work efficiently in the $800B domestic transportation market. Visit FreightPlus.io for more information. ### Media Contact: Courtney Conyers Marketing & Communications cconyers@freightplus.io

FreightPlus Ranks #184 on the Inc. 5000 List

August 16, 2022

For the 2nd Time, FreightPlus Appears on the Inc. 5000, Ranking No. 184 on the List of Fastest-growing Privately Held Companies in America FreightPlus recognizes a three-year revenue growth rate of 2,846% NEW YORK, August 16, 2022 – Today, Inc. revealed that FreightPlus is No. 184 on its annual Inc. 5000 list, the most prestigious ranking of the fastest-growing private companies in America. The list represents a one-of-a-kind look at the most successful companies within the economy’s most dynamic segment—its independent businesses. Facebook, Chobani, Under Armour, Microsoft, Patagonia, and many other well-known names gained their first national exposure as honorees on the Inc. 5000. “We are honored to be featured on the annual Inc. 5000 list for the second year in a row,” said Stephen Aborn, FreightPlus Chief Executive Officer. “This award and our ranking reflect the continuous dedication from our team to providing our customers with the people, technology and processes to build best-in-class logistics programs. We are thrilled to be recognized as we strive to bring customer-centric and innovative solutions to the world of logistics.” The companies on the 2022 Inc. 5000 have not only been successful, but have also demonstrated resilience amid supply chain woes, labor shortages, and the ongoing impact of Covid-19. Among the top 500, the average median three-year revenue growth rate soared to 2,144 percent. Together, those companies added more than 68,394 jobs over the past three years. Complete results of the Inc. 5000, including company profiles and an interactive database that can be sorted by industry, region, and other criteria, can be found at www.inc.com/inc5000 . The top 500 companies are featured in the September issue of Inc. magazine, which will be available on August 23. “The accomplishment of building one of the fastest-growing companies in the U.S., in light of recent economic roadblocks, cannot be overstated,” says Scott Omelianuk, editor-in-chief of Inc. “Inc. is thrilled to honor the companies that have established themselves through innovation, hard work, and rising to the challenges of today.” About FreightPlus FreightPlus is an industry provider of data-driven transportation management offering businesses customized and fully tailored managed transportation solutions in a boutique environment where clients get the individual attention they deserve. FreightPlus combines first class customer service with innovative technology and industry practices to help mid-size and growing companies work efficiently in the $800B domestic transportation market. Visit https://www.freightplus.io/ for more information. Media Contact: Courtney Conyers cconyers@freightplus.io

FreightPlus Names New Senior Vice President of LTL

July 26, 2022

Innovative managed transportation provider brings on LTL industry leader to continue to support rapid growth QUINCY, Mass — FreightPlus, a data-driven managed transportation solutions provider, has announced the expansion of their company with the hiring of Curtis Garrett, joining as Senior Vice President of LTL. Garrett will focus on improving carrier relationships and interactions through utilizing technology and strategic processes. With revenue and employee count quadrupling over the past five years, FreightPlus was named the second-fastest growing privately held company in Massachusetts by the Boston Business Journal. FreightPlus was also listed as the 783 rd fastest-growing company on the 2021 Inc 5000 list. CEO Stephen Aborn commented, “I am thrilled to have the opportunity to work with Curtis. Expanding our team with his experience is a great step in the right direction for FreightPlus as we continue to look for the most innovative and ambitious thinkers in the logistics space.” Garrett brings fifteen years of LTL experience prior to joining FreightPlus, including eight with ODFL in operations, driving, pricing, yield, and W&I. Since departing from ODFL, he has spent six years on the 3PL, software and consulting side of the industry, recently serving as Vice President of Pricing and then Chief Strategy Officer at Reconex. Garrett is fascinated with technology and is truly a student of the industry. Having overseen hundreds of millions of dollars in revenue on the business profitability side, as well as pricing and carrier relationships and procurement, Garrett is more determined than ever to break down silos and get everyone on the same playing field. “I am beyond excited to join FreightPlus”, said Garrett on his new role. He continued, “from what I have witnessed, this company has all the right parts and pieces – customer obsession, innovation, and grit – to do big things in the freight industry and I could not be more excited to be a part of it.” About FreightPlus FreightPlus is an industry provider of data-driven transportation management offering businesses customized and fully tailored managed transportation solutions in a boutique environment where clients get the individual attention they deserve. FreightPlus combines first-class customer service with innovative technology and industry practices to help mid-size and growing companies work efficiently in the $800B domestic transportation market. Visit https://www.freightplus.io/ for more information. Media Contact: Courtney Conyers cconyers@freightplus.io

FreightPlus Named to Boston Business Journal's Fast 50 List

FreightPlus Named to Boston Business Journal's 2022 Fast 50 List

March 28, 2022

FreightPlus has been named to Boston Business Journal's exclusive 2022 Fast 50 list for the first time.

Ben Graeff Appointed as FreightPlus Chief Operating Officer

FreightPlus Expands C-Suite with the Appointment of Ben Graeff as Chief Operating Officer

March 7, 2022

Innovative managed transportation provider continues to invest in executive team to support the company’s rapid growth. QUINCY, Mass — FreightPlus, a data-driven managed transportation solutions provider, announced Ben Graeff has joined as Chief Operating Officer, the first in company history. Graeff will be responsible for the company’s operational, managerial, and product strategy, as well as driving day to day and quarterly results and innovation in FreightPlus’ next stage of scale and growth. With revenue and employee count quadrupling over the past five years, FreightPlus was named to The Inc. 5000 list of fastest-growing private companies in America in 2021. CEO Stephen Aborn commented, “I am thrilled to welcome Ben to FreightPlus. His natural ability to lead and his experience scaling large businesses at the intersection of technology and operations will be invaluable to our growth story. Every person or partner that works with Ben will be better for it.” Graeff brings over 10 years of experience building technology and businesses at Amazon. Prior to joining FreightPlus, he served as Sr. Manager, Product Management and Data Analytics within Amazon Transportation Services. During his tenure, Graeff was responsible for P&L ownership in Amazon’s consumer retail division, developing new software and customer experiences for Amazon Prime, as well as product development and business results in operations and logistics across the globe. “I am excited to join a company whose mission embodies solving complex problems in partnership with its customers,” said Graeff on his new role. He continued, “Like all great organizations , FreightPlus is powered by its people. I’m eager to join this growing team and blend my experience in building and developing organizations with delivering fast-paced results through people, process and technology. FreightPlus’ commitment to driving long-term partnerships, cost savings and strong service for our customers aligns closely to my core values. I look forward to continuing to build the products, processes, programs and technologies to drive FreightPlus’ future growth as a data-driven transportation management service.” About FreightPlus About FreightPlus FreightPlus is an industry provider of data-driven transportation management offering businesses customized and fully tailored managed transportation solutions in a boutique environment where clients get the individual attention they deserve. FreightPlus combines first-class customer service with innovative technology and industry practices to help mid-size and growing companies work efficiently in the $800B domestic transportation market. Visit https://www.freightplus.io/ for more information. Media Contact: Courtney Conyers cconyers@freightplus.io