The concept of Domestic Heavyweight shipping is far from being a "no brainer" in today's Supply Chain. A customer really needs to be on their P's and Q's to maximize their business when shipping via the ground. Other than price there are several key factors that must be considered to get the most out of your carriers- transit time, region expertise, to name a couple. Something that I had a particularly difficult time getting used to when I started working in the Freight industry was the concept of Dimensional Weight vs. the Class system for Motor Carriers.
Freight Forwarders use dimensional weight vs. actual weight; Motor carriers use the Classification systems to determine liability, costs of shipment, susceptibility to damage, and value. In laymen terms, the class system rewards a shipper whose shipment is dense with "0" or little value. So a customer shipping 500 pounds of screws would get more benefits of a good rate than a customer shipping 500 lbs. of feathers.
A few years back, the thought process was when shipping LTL type shipments to always use a Motor Carrier such as Conway or UPS Freight because you are going to get better rates and service. But times have changed in that Freight Forwarders have become more competitive in certain situations, and more often than not they will offer a faster transit time. Forwarders use dimensional weight to help them assess the weight of shipments. If your shipment is destined to travel on the ground with a Forwarder they will be using a DIM FACTOR of 250; shipments traveling in the air within the United States would be using a DIM FACTOR of 194; and international would be D.F. 166.
Let's take an example to show how dimensional weight is assessed vs. actual weight on a ground shipment:
Customer is shipping a pallet of computers headed to Denver, Colorado. The pallet dims are 48x50x50 with a weight of 300 pounds. After multiplying the pallet dimensions together and dividing by 250 your dimensional weight would be 480 lbs. So the carrier would use 480 lbs. to determine the rate. On the contrary, let's take the same product with the dims of 30x30x30 with a weight of 300 lbs... Using the same DIM FACTOR of 250 you now get the dimensional weight of 108 lbs. so in this case you would take the actual weight of 300 lbs.
What I have used as a general rule to understand the best time to use a Freight Forwarder vs. a Motor Carrier to ship out freight are:
- 1) When time is of the essence
- 2) If you are shipping via a motor carrier and your Class is at a 92.5 or above there's a good chance the F.F. will be more cost effective.
- 3) If a shipment is high importance and damage is NOT an option- less handling.
- 4) If there other variables such as "blind shipments" and "COD's" involved.
- 5) If you have been experiencing theft or vandalism.
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EJ White is a 15 year veteran in the area of Supply Chain and Logistics. EJ has worked for companies such as Fedex Services, Yellow Transportation and Aeronet Worldwide. His area of expertise is Supply Chain solutions and he believes in taking a consultative approach to working with his clients. EJ is currently serving as Vice President of Sales and Service with a fast growing Freight Forwarder based out of San Francisco, Ca. EASCO has proven to be a company who offers their clients solutions to maximize their efficiency and achieve the utmost cost reduction possible.
