LTL carriers impose minimum cubic capacity rules to effectively counter very light, fluffy shipments that take up more than their fair share of a trailer.
I am seeing an increasing number of freight bills being hit with a “minimum cubic capacity rule.” This rule can appear to be complex and it is contained within the LTL carrier’s rules tariff. Those rules tariffs are long, detailed and sometimes arduous to read and comprehend. Let me define the rule and illustrate some of the differences in the rule by different carriers. As I always state, and hopefully will demonstrate here, it’s important to know the rules and how to avoid the additional costs.
LTL Minimum Cubic Capacity Explained
LTL carriers impose minimum cubic capacity rules to effectively counter very light, fluffy shipments that take up more than their fair share of a trailer. In most cases, LTL carriers state that if a shipment consumes 750 cubic feet of space or more, AND the shipment has a density of less than 6 pounds per cubic foot, it’s not paying it’s fair share. While the rule varies dramatically amongst carriers, most artificaially adjust the weight to a minimum of 6 pounds per cubic foot, AND apply a 125 or 150 commodity class to the shipment with those associated tariff rates. Most carriers use the 750 cubic feet as the threshold, but not all. One national carrier uses a threshold of 250 cubic feet and another 350 cubic feet (if less than 3lbs/ft3) as the threshold before implementing the rule. Thus, some shipments as small as 3-4 pallets might have the rule applied.
There is no standard. In fact, some carriers force class 100 or 125, some class 150, and in one instance I found where a class 250 is applied. The real difference is in the pricing that is applied. In many cases, the carrier dictates that their current base rates be applied. Some carriers apply no discount, some 50% while others allow the clients negotiated discount to be applied. They generally don’t allow an FAK structure to be used. Some carriers specify that they will include unused space in the calculation, especially if your shipment cannot be stacked upon. For example, pallets configured with a pyramid to prevent stacking, will be adjusted for the space up to the top of a trailer or 8 feet. Again, the rules vary and some carriers use very elaborate language with various exceptions.
Here is why this is important. The minimum cubic capacity rule will increase your freight charges.a lot. One of our clients, unaware that their carrier implemented the minimum at 250 cubic feet was under the assumption their shipment would cost around $600. The bill came in at slightly more than $1,300. The rule was there and the client had no recourse.
Managing LTL Minimum Cubic Capacity
So what should one do? First, know the cubic capacity rules with the carriers you use, or the carriers your 3PL uses. Know approximately how the carrier determines the price so if you have a shipment that will have that rule applied, you can at least route the shipment with the lower cost carrier. You can try splitting the shipment into two shipments, but some carriers have rules against that and will apply it even using multiple bills of lading. You can increase the weight of your shipment on the bill of lading to ensure you are at least 6 pounds per cubic foot. However, with weight corrections possible, a carrier could adjust your weight down and apply the rule. In that case, you could include rocks that actually increase the weight of the shipment beyond 6 pounds per cubic foot.
Any way you go, knowledge is important and you will have to become proficient at math (to calculate density) and apply rates. A good TMS will help you in this
See the original article – LTL Minimum Cubic Capacity Rules
About the Author
Jim Bramlett is a 35 year transportation and logistics veteran and is COO of SmartFreightWare, a shipping software and consulting company helping clients optimize shipping costs. Connect with Jim at
[email protected] / 913-529-2346. Website: www.smartfreightware.com