Navigating the 2025 NMFC Freight Classification Changes

Welcome to Beyond Point to Point, the podcast where we go beyond pickup and delivery and dive deeper into the world of logistics, freight, and supply chain management. From industry trends to expert insights, we're here to help you navigate the complexities I'm Joe Greek, and I I'm Joe Greek, and I'm excited to kick off this podcast where we'll explore the latest trends, challenges, and solutions in logistics and supply chain management. At Averitt, we know that moving freight is about more than just getting from point a to point b. There's strategy, innovation, and a lot of moving parts behind every shipment. That's why we created Beyond Point to Point, to go beyond the basics and dive deeper into the topics that matter most to shippers. For our first episode, we're covering a major industry shift that's coming in July, the changes to LTL freight classifications under the NMFC. If you're in shipping, these updates could impact how your freight is classified and, ultimately, how it's priced. To break it all down, I'll be talking with experts who are on the front lines of these changes. We'll cover what's happening, what it means for shippers, and how to prepare. We'll also be heading over to our Cookeville service center to take a closer look at how accurate weight and density measurement plays a role in all of this. And, of course, we'll be diving into how packaging choices impact freight protection because cutting corners on packaging to cut costs could lead to bigger problems down the road. It's gonna be a packed episode with a lot of valuable insights, so let's get to the first point in today's route. To help us kick off this conversation, I'm joined by my very first guest on Beyond Point to Point, someone who knows this industry inside and out. Mark Davis is Averitt's vice president of pricing and traffic, and he's been part of the Averitt team for an incredible forty six years. Well, Mark, thank you very much for being the first guest on Beyond Point to Point. My pleasure. Glad to be here. Well, you know, I've only been in the industry for about ten years. You know, I've seen my significant events and disruptions in the industry, the Amazon effect, COVID, large carriers going bankrupt, even a very large cargo ship blocking the Suez Canal for a few days there. But I think over your career, you've seen some even bigger shifts. And what I'm really getting at is you got to experience deregulation in the early eighties. Could you kind of tell me what that was about and how it helped shape the industry as it is today? Yeah. Sure sure thing. Yeah. It was the deregulation act of nineteen eighty, and that deregulated rates and routes that had heretofore been super regulated where filings with the ICC were were mandatory. So it became kind of the, the wild west. And, promptly after, that legislation, came the onset of discounting that, you know, that that was a foreign term and and certainly, nothing had ever been realized in our industry. And, of course, it's still with us forty plus years later at this point too. So, what we're talking about today on on the, the, change with the NMFC, I I think it's got the potential to be the biggest change in in LTL pricing since discounting. So, you know, forty plus years, that's that's saying something. So we're not talking about coupon changes here. We're talking about some pretty significant shift. Could you give us a high level overview of of exactly what this is and what it means for shippers? Yeah. I I can. The, the classification looks at, four characteristics when coming up with a class for products, and that is, density, which is it should be density, density, density, and density, All four. But seriously, along with handling, stowability and liability. So for years and years, decades, our customers, shippers have complained that the the classification was too complex, too complicated. And so, what's going on with NMFTA now, it's kind of a decades long response, to this issue. So the NMFTA carriers and member member carriers and staff, have taken on this simplification initiative. So that's what it's about. And and what the outcome primarily will be is that the where the simplification comes in. More and more, if not most, commodities will become density related solely. And those other three factors for consideration, handling stowability and liability, as long as they don't have a significant impact on a commodity there to the subwayside. So simplification is is coming. That's great. So it sounds like there's a big benefit for carriers and shippers by simplifying the whole process. Correct? I certainly believe so. The, the the big question though is what does it mean for me? What if I'm if I'm a shipper, what does it mean for me? And the simple answer is it depends because all of these, class ratings had the the, potential for change just given what their actual density is. So, each each commodity will be rated off of a thirteen sub provision scale depending on what the density is. So with that, I think the big question on shipper's mind is how is it gonna impact pricing? And so how how would you go about explaining that to, shippers today? Well, first of all, they gotta know their freight. That's that's, that's that's the first thing. And and, unfortunately, many shippers, don't aren't that sophisticated to have that knowledge. But, they need to know what the density of their freight is. And I mean, density as package for for shipping. And, you know, Averitt, we have tools on our website. We have a density calculator, on our website that can walk, our customers through that. Well, Mark, you know, you've seen a lot of things over your career. So what are the most common mistakes that shippers make with freight classifications? Inaccurate information on the bill of lading and whether it's the, a bad weight or the wrong description, and and so so the description and the the weight and the handling units are are important. But in addition to those, what we're coming up with now, we need the dimensions. We need the the length, the width, and the height. We, we but with the weight, then, of course, we can calculate the density. But but if they have the NMFC item in their freight class, supply that as well. You know, it it may need corrected, but the more information and the best, accuracy possible that they can give us is is what's what the mistake not to make. So it really comes down to getting to know your freight. Absolutely. So well, you know, we've got this big shift coming in July. Are there any changes in the future for the LTL industry that you're aware of or that shippers need to be thinking and planning ahead for beyond just the NMFC changes? Well, first of all, the the the NFC project, it'll it will continue. And and just like today's current process, it's ongoing because new products come into the market, new packaging, new new, compositions. So so that will that process will keep going. But because of the the focus on density and because carriers have have invested in dimensional scanners, that, I believe, will proliferate more, even into the shipper's hands on shipper's docks. But what I think it will will morph to is more and different pricing formats that are based on dimensions and density, outside of the old freight class. For instance, Averitt, our exact rate is a is a dimensions based rating product today. So, you know, whether, units could be, you know, charged in pounds per or or dollars per cubic foot. You know, we we have the ability to do that now. But I think there's gonna be an acceptance when, more of this information on dimensions and density becomes more mainstream. Well, you're obviously the man with a wealth of knowledge on the subject of everything LTL, and I really appreciate you, joining me today on the show. And I look forward to having you on again in the future. Well, thank you, Joe. I appreciate it. Glad to be here. Averitt has been delivering success for over half a century with passion, pride, and a powerful network. Introducing the Power of One, your single source for transportation and logistics. Our comprehensive services include LTL, truckload, dedicated, distribution and fulfillment, and integrated global solutions. But what truly sets us apart is our people dedicated to serving you. For any need, local or global, trust Averitt, the power of one. Now we've talked a lot about freight classification, but another big part of this conversation is making sure shipments are measured accurately. For our next point, we're heading over to our Cookeville service center to get our hands dirty. Well, hopefully, not too dirty, and we'll take a closer look at how weight dimensions and density play a role in these upcoming changes. So buckle up. Welcome back. We're at the Averitt Service Center in Cookeville, Tennessee. We're miles down the road from our corporate headquarters and centralized call center. Each day, thousands of shipments move in and out of facilities like this across our distribution network. They're originating and destined for locations across the south, across the country, and across the borders with Canada and Mexico, and even around the world. Our next guest is Greg Hallmark. He is our area way and research leader. Let's go inside and meet him. Greg. Yeah. How's it going? See you today. Thanks for making the trip up from Birmingham. Yeah. Enjoyed it. Thank you. Well, let's go discuss, NMFC changes and density. Alright. Alright. It's a pleasure to have you on the show. With the upcoming NMFC changes in twenty twenty five Mhmm. What why does this matter more than ever for shippers? One of the main reasons is there's gonna be a lot of the freight that was not density rated that will be density rated now. I figure there'll probably be around eighteen hundred to two thousand different items in the NMFC that will be density rated. And for our shippers, it's gonna be imperative that they get the correct weight and the correct measurements on the bill of lading at that particular time. Now for for most of our customers, well, really for all of them on the bill of lading, they are required to list an actual NMFC, the actual weight, and the actual class. With the new, I guess, densities coming into place, it would also be beneficial for them to put the actual measurements on the billet lading as well also. So one of the things that comes up a lot in LTL operations is we reweighing the freight. So why does that occur? And can you walk us through the process? Well, one of the reasons that it occurs is, say we have a shipper that does not have scales, they do not know what their product weighs, and they put it at like an even three or four hundred pounds, and the actual shipment weighs ten to twelve hundred pounds, we would be taking a major loss on it. Now, if it's something that's a low class, a low density, that's not that big of a deal but say it's something like a step ladder or packing peanuts where it's a class three hundred or four hundred, that's gonna be a major deal. And all we're doing is protecting our own profits. Now from a customer standpoint, if we don't get the weights correct and we say we cut a trailer out here then it says it weighs thirty seven thousand pounds and it runs across the scales of any of these state lines and it weighs fifty seven thousand pounds because of incorrect weights, we're the ones that's gonna have to pay for that, not the customer. So we've got to make sure for our own our own equipment, for our own safety, and for our own profitability that the weights are correct. There are instances where we have shippers overstate the weight. When they overstate the weight, most of the time if it's a large enough weight difference, we'll cut that weight back and actually save the customer that much money. Well, I would assume that most of the time, it's generally gonna be a mistake when people are reporting Yes. Their weights and classifications. So what are the most common mistakes that a shipper makes that you see day to day? Really, it's not so much as mistakes. The majority of our shippers really do try to do the right thing and put the correct weights on. Some of them will have a book weight and they know exactly what their products weigh, where it's product a, product b, product c. And they may have a warehouse full of different products but they know on a computer screen exactly what that particular product weighs and they put down on the bill of lading what that product weighs and say it's on two or three pallets. Well, we've also got the weight of the pallet and the packaging that we need to put into place there and the majority of the time that's the biggest mistake that I see is they don't factor in what we call the tare weight. Other times is where we'll have bill of ladings that we preprint for a particular customer where it has an f a k which means freight all kinds and they've got certain parameters that they go by and what they're billed at. And say it's a class one hundred, say they're billed at a class one hundred, that's what they'll put on the bill of lading regardless of what class the freight actually is. And sometimes when we look at it, when we measure it, when we get the densities on it, it does not fall under that parameter and we and we actually make a class change on that. But the weights the weight is probably nine times out of ten, we do twenty weight changes for every one class change that we do, period. Because we have, scale lifts, we have floor scales, and they are accurate within one percent. Because if they're not accurate within one percent, we can't even use them. And one percent would be ten pounds for every one thousand pounds weighed. So that would be your one percent. So they're accurate within ten pounds for per one thousand pounds. Well, I think you've illustrated how important it is to keep the measurements and classifications correct. Mhmm. Would you be willing to show us how to go about measuring an actual pallet of freight out on top? Sure. Alright. Let's go right now. Let's go. Alright. Well, now we have some freight to measure. Would you mind, giving us, the walk through? Well, first thing we do, of course, we walk around the freight, make sure there's no damage visible whatsoever. Then we take length times width times height. Now when we do the length times width times height, we have to measure it from longest point to to longest point. You know, sometimes we have shippers that put a cone on top, but it says do not stack. Well, we'll have to measure to the top of that cone. Or sometimes we'll have shippers that have an oversized pallet. Well, we have to measure the pallet. And if the freight overhangs, then we have to measure the freight. Whichever one is longest point to longest point. And in this case, it's going to be the pallet. So we'll go down through here. So it's forty four. By thirty six by forty eight. And then we'll we'll write that down. We'll record that down. Now how we figure the densities on this, we'll take the length times width times height, multiply that altogether, and then we'll divide that number by seventeen hundred and twenty eight. Where we get seventeen hundred and twenty eight is twelve times twelve times twelve, which is how many cubic inches are in a cubic foot. Say this one comes out to fifty cubic feet, Then we'll take the weight and we'll say that it's six hundred pounds and we'll divide six hundred pounds by the cubic footage. So six hundred divided by fifty would be twelve. So the density of this pallet would be twelve pounds per cubic feet. Now on a density scale, you're looking at for anywhere from a class four hundred all the way down to a class sixty. So depending on where that falls, say twelve pounds per cubic foot would fall between twelve and fifteen, which would be a class eighty five. So this particular shipment would be a class eighty five, and that's how we figure that up. And if you're not an expert at math like myself, you you can also go on a rid dot com slash density dash calculator to input your numbers to get the actual density as well to help speed up the process. Yes. All you need to know is the measurements of your shipment and the weight of your shipment. You can put that into our calculator, and it will figure the density for you. Great. And we'll show how that works. Alright. Now that we're on the Averitt website, we can get to the density calculator. So when we're here, we can put in the number of pieces for the shipment, which was one. Then we can put in the length, which was forty four inches Then we can do the width, which was thirty six inches And then we can do the height, which was forty eight inches Finally, we'll put in the weight, which we said was six hundred pounds. Now that we've put those points in, we can calculate it. Now we have our measurements at forty four cubic feet with a density of thirteen point sixty four. Now that we've, shown how this tool works, we've gotta get back over to the studio to talk to our last guest, Jason Brewer. Voted the number one LTL carrier by shippers nationwide. You can always count on Averitt's industry leading low claims and superior transit times. For over fifty years, we've been your trusted transportation partner, dedicated to saving you time and money. From standard LTL to guaranteed service, we've got your supply chain covered. Experience professionalism with twenty four seven customer support and real time tracking at your fingertips. No matter the size or frequency of your shipments, whether regional, national, or cross border, we offer flexible and reliable LTL solutions under one roof. Avid, that's the power of one. Alright. We're back in the studio for our final point, and I've got a great guest to close things out. Joining me now is Jason Brewer, Averitt's loss prevention leader. Jason has been with Averitt for nearly thirty years, which means he's seen just about everything when it comes to keeping freight safe and damage free. With these NMFC changes coming, we know some shippers may be tempted to cut costs down on packaging to improve their density and lower costs. But as Jason will tell us, that can lead to some expensive problems down the road. Jason, thank you very much for coming on the show today. First question I wanna ask you, what are the actual hidden costs of reducing packaging practices to improve density? Oh, that's a very good question, Joe. One that I'm very passionate about. In fact, I I've seen it in action where less packaging equals more damage and more, reduction of, quality customer service. In fact, I would say that in LTL, packaging is probably one of the most, most important control variables that we can manage in an ever changing LTL transportation world that can create a successful delivery. Whenever we start removing packaging, or or maybe even, trying to configure it in a way maybe it's to reduce pricing on on density, but it could it could also be because they're trying to reduce packaging pricing. Ultimately, the shipper is responsible for packaging the commodity since they're the expert in the commodity. And then everything that the carrier does is in in order to, prevent any occurrences to affect that type of packaging in in a negative way. What happens is the NMFC starts the conversation by lay outlining the minimum standards of packaging that include general specifications, but also commodity driven requirements as well that have been deemed to best protect that product. It it that's the minimum, though. So a customer may still have to add additional packaging in order to protect what's, what may be more prone to being damaged based on whatever that specific commodity is. If not packaged to meet those standards, then a carrier could could ultimately decline a claim. So you have that cost. But it doesn't just stop at the claim. Even if the carrier filed the or actually paid the claim, then and there still is an increase in damages or shortages, the shipper risks losing sales. They risk dissatisfied customers, increased back orders, then increased production cost, and then increased freight cost. And, eventually, maybe when capacity tightens up, carriers aren't gonna wanna accept their freight for transportation because the the in essence, there's some liability there. Well, it really does sound like a double edged sword when you're thinking of compromising standard packaging procedures just to potentially reduce some costs. So, packaging is obviously very important in our industry. And at Averitt, we move freights of all kinds. We move LTL. We move full truckloads. We also move, ocean cargo containers. So could you give me some of the biggest, maybe packaging misconceptions when you're thinking of LTL versus truckload? Is there a difference in the way, people need to go about packaging their freight? Yeah. Actually, there are two recurring conversations that we have with our customers from the loss prevention or a claim standpoint. And, one is that a lot of customers believe that they received their freight just fine in the packaging that it's in. Why can't I just put it on one of your trucks and and the packaging be fine for that leg of transportation? Well, most likely, that packaging was designed to be loaded most efficiently in a container or a truckload, or maybe even a flatbed where it's not gonna come into contact with unlike freight stacked tightly against it. And and so it probably would ride along just fine in those transportation legs. But in in LTL, it it it's completely different because, like I was mentioning, there's so many other different types of freight that could potentially make contact, or even the physics in the rear of the trailer, along with that unlike freight, could cause unforeseen opportunities that packaging needs to be able to protect from. When it comes to LTL distribution, what does the actual process of freight and transit look like? What is occurring inside the trailer from pickup to final delivery? Well, that's a good question, Joe. To be a piece of freight in the back of the trailer could be very frightening. Only I only say that because you're surrounded by so many pieces of unlike freight. It's not just our customer's one type of product that's in the back of the trailer. And as it moves down the road, it's experiencing a lot of rigors such as freight shifting forward, shifting backwards, taking curves, taking turns, hitting potholes, a constant vibration. I've been behind a trailer where it's going down the highway, and you can actually just see the rear end of the trailer just constantly bouncing. You know? And, of course, I had my kids with me. I was like, look, kids. Look what that does. But the the important thing is that we understand that our customer's freight or my freight is not the only freight in the back of that trailer. From pickup to relay to delivery, while we're cross docking it, LTL is a fast paced industry where cut times are important. We have to hurry sometimes, And we also use a lot of tools that if the packaging isn't proper, then even the tools that we use to try to protect the freight could end up damaging it. Well, that is actually very fascinating. And just considering all the physics that are occurring inside the trailer from the point to point through the entire duration of the freight's journey. So given that you have all these variables within the journey, you know, when you're speaking with shippers, what are some of the damage prevention tips that you give them that they should be employing in their everyday, shipping practices? Well, yeah. If they if they focus on packaging and the different elements of packaging and understand what that means, that packaging isn't just providing a way for us to move it in and out of the trailer. But in LTL, the purpose of packaging is to protect the freight. It doesn't have to be pretty. You don't have to have your emblem all over it to make it protect freight, but you do have to have a the the the product covered, and that would need to be rigid material, which could be what? Cardboard, composite material material, plywood. It it would need to be rigid enough to withstand some type of impact. A well built crate offers the most protection. Then also then you move on to the interior packaging. Once it's once you know what your outside packaging is like, then you get interior packaging that's gonna protect from any shock, vibration, compression, or crushing. Think about a fiberboard box. You have, your product in there. There's a lot of stacking in LTL like we've discussed, and you'll you'll want some protective interior packaging that will keep that void space upright where where it will be filled and not collapse when something is stacked on it. Next, we have to move to what's the foundation like. Right? We want the foundation to be in a good order. We want, the the the pallet or the or the skid, should be right sized. It should be in good condition. By right sized, I mean, you don't want anything overhanging. Some of the overlinked freight, you want one solid right sized foundation. You don't wanna have two different pallets on on a long piece of freight, because one of those pallets more than likely will be torn off as a result of that. You you want your deck board spacing to be narrow enough, and you want it to be the support to be strong enough that your product doesn't fall through the spacing, but also when we're using our forks that something doesn't come up from underneath and cause damage to the undercarriage of that product. It may be tempting to make the pallet or skid shorter, because that may help your density a little bit or it may help the volume that you can place on the pallet or be able to increase weight with product, and that could change the density. But when you do that, when you have a shorter pallet, you risk, okay, our drivers use a pallet jack to unload freight. Well, suddenly, we can't get our pallet jack underneath that. How are we gonna unload it off of our trailer? So a standard four to six inch pallet is better than trying to reduce down to a a shorter pallet in order to gain some type of of of savings on on on freight, if if your ultimate goal is customer satisfaction. And then also, it would be tempting to narrow the footprint, of the pallet as well. Because if you narrow the footprint and your weight is is high and you got more freight on that, then that changes your density to a higher density. And what that will do is it could create a top heavy, product, or your your your pallet is suddenly top heavy. You really need a wider base whenever you have taller freight. So those things have to be taken into consideration. Finally, the product has to be secured. So many times we see product all wrapped nicely with plastic, but it's just sitting on top of the pallet. And those inertias and physics that we were talking about earlier, that's gonna slide that freight right off the pallet, and we're gonna have to recover from that. Hopefully, it's not damaged after it does that. So you wanna make sure the the wrap actually overlaps the pallet, probably about a couple layers over three inches at least, over the the pallet itself. And, using banding, you wanna make sure it's banded in in all directions. At Averitt, you know, we're very proud to have a industry leading low claims ratio. You know, we have great partnerships with our shippers. We work very closely with them. But at the same time, there's an internal element in how we train our associates to also handle freight. So could you tell us a bit about, you know, what Averitt does internally to protect our shipper's freight. Yeah. Thanks for asking that, Joe, because I I think it's very impressive myself because, we we get better and better at it the more we do it. And and our leadership out in the field, they do a tremendous job making quality a priority. And associates understand that that, hey. My leader wants this to be a priority for for them, and that means it's a priority for me. And we we we take that seriously at Lee and Averitt. And what's interesting to me is that whenever we're talking to customers about improving their packaging, that's one thing they bring up. They're like, well, if my packaging's so bad for LTL, why don't I ever experience damages other than periodically? And and that's when we get to brag. We get to say, hey. You're absolutely right. You you don't experience a lot of damages, but that doesn't mean your packaging is is, is spec for LTL. Every load is different in LTL. We invest in our teams. We do that, we do that in training and coaching. We do that in they're vested. And if the claims ratio is low, if the quality is good, they understand that we need to have good quality so that way our customers will wanna stay with us through thick and thin. They they they use a variety of tools. We invest in airbags. We buy cardboard. We we have we we buy a lot of straps. We we have load bars. We have pallet decks that we invest in to to reduce the stacking opportunity. All those things that we do on the dock using those tools and using them properly and holding each other accountable through photo feedback and coaching and, learning from each other, mentoring each other on the dock. Those things those things are the things that make us great. Well, thank you very much for giving us a little insight on what's happening behind the scenes at Averitt. And I think, this conversation was just very informational and very insightful for our customers and shippers, throughout the industry, and I really appreciate the time you gave me today. Yeah. Thanks for having me, Joe. Thank you very much. Now let's take a step back and recap what we covered today. We kicked things off with Mark Davis who broke down the upcoming NMFC classification changes and what shippers need to know. Then we took a trip to our Cookeville service center to talk with Greg Hallmark about why accurate freight measurement is more important than ever. And finally, Jason just walked us through the hidden risk of cutting corners on packaging and how shippers can protect their freight. These changes are coming fast, and shippers who prepare now will be in the best position to avoid surprises. If you have questions about how these updates might impact your business, reach out to your Averitt transportation specialist or visit avret dot com slash n m f c. And with that, we're wrapping up the very first episode of Beyond Point to Point. If you found this conversation helpful, be sure to subscribe wherever you enjoy your favorite podcast, and we'll catch you next time.