The freight sector can appear to be intimidating at first look. Even seasoned industry professionals with years of experience can feel overwhelmed when new intermediaries emerge or laws change. The reality is that in the freighting industry, the lack of standards and monopolies allows for the numerous elements of this diverse industry to coexist.
Sure, FedEx and UPS have become one-stop shops for clients looking to ship packages, but what about the backend? What about freight carriers that have to transport a product or good across a state or country?
This, of course, increased demand for freight brokers, who are now the industry’s gurus. Regardless of whether you are a newbie or an expert in the freight sector, you are bound to have questions concerning shipping. Perhaps even questions you’d prefer answered before putting your trust in a liaison. Any reputable middleman should be able to answer these questions, but it is always a good idea to be prepared.
In that case, if you have shipping issues and need answers, you’ve come to the proper location.
The Ten Most Often Asked Freight Transportation Questions
The variety of inquiries about the transportation business is extensive on both ends. There is no shortage of shipping-related questions, ranging from backend to frontend to general inquiries about the process. The ones listed below highlight what we believe to be the most crucial and fundamental aspects of shipping.
Is there a distinction between LTL and FTL?
The simple answer is yes. There is undoubtedly a distinction. If you read the terms ‘LTL’ and ‘FTL’ and think they’re jargon, remember that LTL stands for Less Than Truckload and FTL is for Full Truck Load.
Both of these words apply to a freight shipping method. They are, by and large, the most popular and widely used modes of freight shipment, but it is crucial to realize that there are a variety of other possibilities. So, what’s the distinction between the two?
LTL is defined.
Less than truckload shipping refers to shipments that weigh less than 4,000 pounds and do not require the use of a whole truck. In that instance, a freight carrier will consolidate many shipments from different shippers onto a single truck. Routes are optimized based on the shipment’s origin and destination, and shipments with the same or adjacent intended destinations are typically clumped together.
This method of shipping is advantageous since it lowers the cost and makes better use of space, which benefits both shippers and carriers. The package will be routed through a hub-and-spoke network with various unloading and loading sites until it arrives at its final destination. The main advantage of LTL is the low cost, while the main disadvantage is the nature of the route.
FTL is defined.
If LTL is less than truckload, then full truckload (FTL) is when a shipper uses the complete storage capacity of a truck for their shipment. This is often chosen when shipments weigh more than 15,000 pounds and require a large quantity of room. Because the variables are low, carriers will provide TL choices with a set fee.
Shippers who require TL shipping profit from having complete control of the shipment from start to finish because the route is dedicated to them, there are no offloading stops, and the transit time is shorter. The benefit is the speed and safety of the travel, whereas the negative is the cost.
Answer: To oversimplify, LTL shares space in a vehicle while TL owns every item of cargo in it.
Are freight brokers required?
As the freight sector began to expand in the middle of the twentieth century, a slew of intermediates and carriers strove to monopolize it. They desired to be the sole carrier and intermediary for all shippers’ shipping requirements. No such thing occurred. Instead, all of these would-be businesses made a place for more, and there was suddenly a slew of intermediaries and moving parts.
Enter freight brokers, the freight industry’s liaisons who work to establish connections between carriers and shippers while ensuring that the deal inked between them benefits both parties.
Answer: Due to the enormous complexity of the freight industry today, attempting to negotiate the terrain on your own is a bad idea. Freight brokers and similar services are highly recommended.
What exactly are freight classes?
The NMFC system was developed by the NMFTA (National Motor Freight Traffic Association) to standardize the ‘types’ of freight in the business. Their 18 classes span from 50 to 500, and each number serves as a catch-all for a variety of items and commodities. These freight classes are designed to standardize the cost of delivering a specific type of goods. Shipping a hazardous chemical will be more difficult than shipping wood pallets, and the freight classification assigned to each of these goods will influence the pricing.
Answer: Freight classes are classifications used in the freight sector to standardize pricing.
How are freight classes determined?
As a shipper, it is critical to understand how freight class is determined, as assigning the incorrect code to a certain cargo might result in heavy charges in the future, or have your organization paying far more than necessary. Freight classifications are generally determined by four factors: physicality, storability, ease of handling, and liability.
The physicality of the cargo refers to its size and density, storability to how well it retains within a storage area, ease of handling to the difficulty of physically handling the items or commodities, and liability to how risky it is to convey. Based on the outcome of these four parameters, a freight classification is allocated to the cargo.
Answer: Freight classes are determined by the physicality, storability, ease of handling, and liability of a cargo.
What exactly are accessorial fees?
Accessorial costs are additional charges that are added to the initial estimate. They could be looked at as extras that arise as a result of circumstances. For example, suppose you’ve decided to ship a large number of engine parts to a specific facility. If the warehouse does not have a loading dock where the truck can draw up and unload, you will require a liftgate truck to unload. There will be an additional charge for this.
Answer: Accessorial costs are additional charges incurred throughout the shipment procedure if an unusual variable occurs.
Is there a standard contract, such as a statement of work?
The SoW (statement of work) is a BoL in the freight business (bill of lading). This legally binding contract describes the shipping arrangement between carrier and shipper from beginning to end, including route, NMFC #, cost, and other information. Knowing the ins and outs of a BoL is critical for shippers because you never want to be caught off guard by the contract’s terminology. A BoL should be the receipt that establishes the standard.
Answer: Yes, it is known as a Bill of Lading.
What exactly is the distinction between a freight broker and a freight forwarder?
The primary distinction between a freight broker and a freight forwarder is one of obligation. A freight broker acts as a mediator between the carrier and the shipper, overseeing communication and fostering a positive relationship between the two sides. In cases where damages may occur, the freight broker is not liable for any claims that are handled.
A freight forwarder, on the other hand, will be in charge of the shipment. The BoL is typically issued in their name, and they are responsible for cargo insurance. Furthermore, they frequently supply storage in their own facilities and operate on a global scale.
Answer: A freight broker is similar to an agent, but a freight forwarder is similar to an agency.
Is freight insurance required for shippers?
While freight insurance is strongly recommended, there is no regulation that requires shippers to insure their cargo. Typically, a carrier will have liability coverage in place to safeguard their trucks and their own firm, but it will provide minimal protection for the shipper’s cargo. The government requires liability insurance.
When it comes to general liability, it is quite difficult to prove the negligence of a carrier if there is no insurance in place under our existing legislation and contractual language. The government adopted a theory at the beginning of the twentieth century that allowed shippers to seek justice against carriers, but due to how it was structured, the law now benefits carriers.
Answer: While it is not legally mandatory for a shipper to insure their freight, it is strongly advised.
How long does it take to ship freight?
While this question should not be asked as frequently as it is, it is undoubtedly one of the most frequently requested freight shipping questions. This is the most subjective of the freight questions we’ve covered thus far. Any carrier or intermediary will struggle to provide an accurate estimate of how long a specific sort of cargo will take. This is, of course, based on the origin and destination, kind of shipping (remember, LTL is much slower than FTL), whether it’s domestic or international, whether it has a stringent customs or unloading process, and so on.
While a carrier is going to be able to say ‘we can usually make it from California to New York in x amount of time,’ time spent in the supply chain is always going to be specific to a certain shipper’s needs and type of cargo. Because of the industry’s lack of uniformity, answering this issue without addressing the specifics can be challenging.
Answer: this depends on the details of the shipment.
Who handles claims?
The claim process of the freight industry is one that is extremely important to understand. The reality is that complications can arise owing to the nature of shipping. Damages, losses, and theft are not unthinkable dangers, ranging from pure coincidence to improper management. As a result, whether you have insurance (either freight insurance or your carrier’s liability coverage), you’ll want to know how to file a claim.
If you have a freight broker or freight forwarder, it should be their responsibility to handle the claim should something go wrong with the shipment. They will understand the communication process better than a shipper, ensuring that the claim is lodged accurately. The distinction is that a broker will manage the correspondence, whilst a forwarder should be in charge of the claim itself.
If a company does not have a liaison or middleman, then it is up to them to file the claim to either their or their carrier’s coverage provider. For freight insurance, if the damage is noted on the proof of delivery, the claim can be filed up to 9 months from the date the incident occurred. If damage is not noted on the proof of delivery, the claim must be filed within five days. For liability coverage, the claim can be filed up to 9 months from the date of the event.
Answer: A shipper’s liaison should handle the claim process from front to back.
Conclusion
The multilayered freight industry is not for the faint of heart. From the multiple moving pieces, and intermediaries, to the lack of standardization, navigating the shipping terrain can feel like running through a maze. However, the more you know about these freight shipping questions, the closer you come to grasp the intricate texture of the industry.
If you’re interested in learning more about shipping with Get Loaded and Rolling, now is the best time to get started. Sign up with Get Loaded and Rolling today.
