Reduce your cost with Density Pricing and Release Valuation

In the Policies and Directives Pertaining to the National Motor Freight Classification (NMFC):
The density guidelines are used in the assignment of classes where the average density of a particular commodity or group of commodities is representative or reflective of the range of densities exhibited by that commodity or commodity group. The CCSB (Commodity Classification Standards Board) has established class 50 as the lowest class in the NMFC and class 500 as the highest.

The National Motor Freight Classification Procedures (NMFC) explains density as: Density – It has been well established that, absent any unusual or significant handling, stowability or liability characteristics, density is of prime importance in the assignment of classes.

Density pricing requires the shipper to declare a release value on the Bill of Lading at the time of shipment The new NMFC Release Value dollar amount for NMFC class rated shipments is now in effect. As a shipper you will pay more per hundred pounds for higher NMFC classifications and be typically offered a higher release valuation, (liability per hundred pounds) on the shipment. If you elect to lower the release value per pound the carrier may lower the cost per hundred pounds it charges.

The NMFC Procedures describes density and Liability (release valuation) as:

Density – It has been well established that, absent any unusual or significant handling, stowability or liability characteristics, density is of prime importance in the assignment of classes. The CCSB has developed density guidelines that are used in the assignment of classes.

Liability 1– The liability characteristic includes susceptibility to theft, liability to damage, propensity to damage other freight with which transported, perishability, hazardous nature, and value per pound. Value per pound provides a measure of carriers' potential liability, and the CCSB has established value guidelines to assist in the assignment of classes. Where the other liability elements are found to present no substantial problems or concerns, value per pound is of less significance. As with handling and stowability, unusual or significant liability characteristics may be a contributing factor in the assignment of classes.

Some carriers will cap their liability in their pricing tariffs (pricing agreement) and/or rules tariff. To simplify freight classifications, it is common to see a freight classification system called Freight All Kinds, or FAK. An FAK is a group of freight classifications which will rate and have a liability for a single class. For example, FAK 50 could be used for actual freight class 50 through actual freight class 100 ( 9 Density scales priced at the lowest Class 50) as specified in your pricing agreement and/or carriers’ rules tariff. Pricing and liability for shipments within this FAK range will be rated at the class 50 level or as specified in your pricing agreement and/or carriers’ rules tariff. The liability or release value will be at the class 50 dollar amount.

Freight Classes can vary within a commodity based on the density (weight per cubic foot) or value per pound or other factors i.e. shipping configuration. For example, the freight classification for paper clips can vary from class 60 to class 400 depending on the density. The density must be shown on the bill of lading at the time of shipment. If it is not on the bill of lading, the carrier has the right to bill you at the lowest density (Sub 1, or highest applicable freight classification cost per hundred pounds).This is known as the Inadvertence Clause in the NMFC rule under Item 170.