(2nd in a series of 5 posts)
Shipping freight can be an easy and beautiful thing for your business. If your shipment picks up, moves and delivers without any complications you can make people on the other end very happy. On the flip side, things can go sideways quickly if you miss even a single seemingly small detail. By following a few simple steps you can avoid a lot of headaches and keep your (ware)house in order. Whether you ship freight regularly and just looking for a refresher or completely new to shipping because of a job or company you started this post is for you.
First, let’s zoom out and take a look at the steps from a high level then we can jump into each one in more detail. Over the next few weeks, I’ll put out a post hyper-focusing each one individually:
Correct NMFC Classification (freight class)
Adequate Insurance Coverage
Accurate & Complete BOL
Actively Track Shipment
Invoice Audit
Step 1: Correct NMFC Classification:
A wise man once told me to knock over the lead domino or that which makes everything else in your way easier or unnecessary. The NMFC item and classification code affects ¾ of the next steps and it’s importance cannot be understated: it is your lead domino.
Your LTL shipping class, indicated by the correct NMFC item #, determines your ltl freight shipment cost, how it is covered for insurance and what to put on your BOL. You can use reason to figure out everything else on this list, but NMFC classification follows very little reason. Ask your chosen carrier or freight forwarder to classify or double check your chosen NMFC code/shipping class if you are unsure.
Please see the 1st post in this series for a granular level examination of NMFC Freight Classification. Or contact us for a personalized freight class chart & freight class calculator or freight density calculator.
Step 2: Adequate Insurance Coverage:
This is blocking & tackling. Please confirm having adequate insurance coverage for each shipment. Once established for a specific product and carrier, you only need to re-confirm when shipping a new product or using different LTL trucking companies.
This relates back to step 1 and your NMFC item#, it’s important that you have the right one because it determines coverage and shows any reduced liability or a “released valuation”.
New vs Used - Used items have limited liability.
Confirm your packaging meets NMFC standards to ensure claims are not denied.
Confirm carrier or broker’s maximum liability with your total shipment invoice value
In some cases, your value will not be covered. Here are your options:
Carrier’s Excess Value Coverage (if offered)
Freight Broker’s “All Risk Insurance” coverage
Your own insurance
While it is a pain to have to explore these options at only step 2 it is MUCH better than finding a coverage gap during a claim.
Step 3: Accurate & Complete BOL
The Bill of Lading is the legal contract issued by a shipper or consignee to a Less than Truckload carrier that specifies product details, parties involved and all pertinent shipment information. Without this document a carrier will not pick up a shipment. Approximately 70% of all additional charges and more than half of all delayed shipments are a result of avoidable mistakes made on the BOL.
Avoid these common mistakes by doing the following:
Ensure delivery, billing & contact information are 100% accurate.
Include all relevant delivery information no matter how trivial it seems.
Include an NMFC Item # (and sub #) and accurate description of commodity.
We talked about this already, remember?
Provide accurate piece counts, weights & dimensions.
Clearly state accessorials on the BOL.
Step 4: Active LTL Shipment Tracking
Keep an eye (or have your broker/forwarder do so) on your shipment while in transit. This will help you avoid any unforeseen delays and associated charges. For example, say your customer’s location in blocked due to construction you’ll want to know right away to avoid storage charges and to keep your customer in the loop.
Step 5: Invoice Audit
Always check your invoice and compare it back to your quote. If it’s higher, why? You’ll want to investigate the causes and if not valid, contest them. Your broker can and should do this for you automatically.
Those are the 5 steps, follow them and it will be smooth sailing! If you have questions about any of them or need a nudge in the right direction please feel free to reach out. I will be posting and linking to the other posts back here once they are done. As always, I’m happy to hear feedback, positive or negative and any requests for future posts.