How Shipping Costs Will Change with the Upcoming LTL Classification Shift

The logistics industry is undergoing a significant transformation with the upcoming changes to the National Motor Freight Classification (NMFC) system. Scheduled for implementation in July, these updates will shift the way Less-Than-Truckload (LTL) shipping costs are calculated, with a primary focus on shipment density. As a result, businesses shipping high-density goods may see cost reductions, while those handling low-density shipments should prepare for potential rate increases. Understanding these changes is critical for shippers looking to optimize their logistics strategies and control transportation expenses.

Understanding the Impact of the New LTL Classification System

The upcoming changes to the National Motor Freight Classification (NMFC) system in July will significantly impact Less-Than-Truckload (LTL) shipping costs. The revised system will prioritize shipment density, meaning denser freight will benefit from cost reductions, while less dense shipments may see price increases.

For shippers, this shift underscores the importance of accurately measuring shipment weight and dimensions to avoid unexpected costs.

The Biggest Classification Overhaul in History

According to Joe Ohr, COO of the National Motor Freight Traffic Association, this update marks "the biggest changes in classification in the history of classification." Given the scale of the revision, it is crucial for shippers to engage with carriers and third-party logistics providers (3PLs) to understand the specific implications for their freight.

To provide a clearer picture of the potential cost variations, industry experts have analyzed the impact on shipments such as footwear, revealing significant price shifts depending on density.

Shipments That Will See Higher Costs

Less dense freight-defined as shipments with a density lower than 4 pounds per cubic foot—will experience price hikes. LTL carriers primarily calculate rates based on weight, but low-density shipments occupy more space on trailers without contributing much weight, leading to cost adjustments.

Key Takeaways:

• Shipments under 4 pounds per cubic foot will face notable cost increases.

• The pricing strategy ensures carriers are fairly compensated for trailer space utilization.

• Shippers handling lightweight, high-volume goods should prepare for higher shipping expenses.

Shipments That Will Become More Affordable

Industries that ship denser freight will benefit from the classification update. Shipments with densities between 4 and 6 pounds per cubic foot—and those exceeding 8 pounds per cubic foot—will see cost reductions under the new system.

Key Takeaways:

• Denser freight will receive more competitive pricing.

• This change benefits industrial and heavy freight shippers the most.

• Cost savings can be leveraged by optimizing shipment density.

Shipments That Will Retain Current Pricing

Freight classified between 6 and 8 pounds per cubic foot will not see any pricing changes. This stability ensures predictability for certain categories of goods.

Key Takeaways:

• Shipments within this density range will experience no cost impact.

• Businesses shipping these products can maintain their current pricing structures.

• A strategic approach to freight density classification remains important.

Worldcraft Logistics' Expert Perspective

At Worldcraft Logistics, we recognize that these LTL classification changes present both challenges and opportunities for shippers. Understanding the new NMFC system is crucial to managing costs effectively. We recommend the following strategies:

• Optimize Shipment Density: Consolidate packages to achieve higher density where possible.

• Leverage 3PL Expertise: Work closely with logistics partners to identify the most cost-effective shipping methods.

• Stay Proactive: Adjust your logistics strategy in advance to avoid last-minute cost surprises.

As a global logistics provider, we assist businesses in adapting to regulatory changes while ensuring efficient and cost-effective freight movement. Additionally, if you're looking for seamless international vehicle shipping, our International Vehicle Export Service ensures reliable and cost-efficient transportation solutions worldwide.

Conclusion

The upcoming NMFC classification shift is set to reshape LTL shipping costs, making shipment density a critical factor in determining rates. Businesses must stay informed and proactively adjust their logistics strategies to remain cost-efficient. At Worldcraft Logistics, we are committed to helping our clients navigate these changes seamlessly, providing expert guidance and tailored shipping solutions. Contact us today to learn how we can support your logistics needs in this evolving landscape.