The National Motor Freight Traffic Association (NMFTA) is in the process of making changes to the less-than-truckload (LTL) rating system. The current system, known as the National Motor Freight Classification (NMFC), has been around for decades and is often viewed as complicated and confusing. The new system, which is called the Classification Reimagination Project, is designed to be simpler and more transparent.
Here are some of the key changes that are being proposed:
The number of freight classes will be reduced from 18 to 10.
The subclassifications will be eliminated.
The density factor will be removed from the rating calculation.
The liability factor will be replaced with a new factor called “stowability.”
The pricing will be based on a single rate per mile, rather than a combination of base rate, accessorial charges, and fuel surcharge.
The NMFTA expects to finalize the new rating system in early 2024. Once the new system is in place, it is expected to make LTL shipping more efficient and cost-effective for shippers.
Benefits for Shippers
There are a number of benefits that shippers can expect from the new LTL rating system:
- Simpler and more transparent pricing: The new system will be easier to understand, which will make it easier for shippers to compare rates from different carriers.
- More competitive rates: The new system is expected to lead to more competitive rates, as carriers will no longer be able to hide fees in the subclassifications.
- Increased transparency: The new system will provide more transparency into the factors that affect LTL rates, which will help shippers to make better shipping decisions.
- Reduced administrative burden: The new system will be simpler to administer, which will save shippers time and money.
What Shippers Need to Do
If you are a shipper, there are a few things you need to do to prepare for the changes to the LLT rating system:
- Learn about the new system: The NMFTA has a website where you can learn more about the new system and how it will affect you.
- Start planning your shipments: Once the new system is in place, you will need to start planning your shipments accordingly. This includes understanding the new freight classes and pricing structures.
- Work with your carrier: Talk to your carrier about the new system and how it will affect your shipments. Your carrier can help you understand the changes and make sure you are getting the best possible rates.
The changes to the LTL rating system are a significant development for shippers. By understanding the changes and planning accordingly, you can ensure that you are getting the best possible rates for your shipments.
Conclusion
The changes to the LTL rating system are a positive development for shippers. The new system will be simpler, more transparent, and more competitive, which will help shippers to save money on their shipping costs. Shippers should start planning their shipments now to ensure that they are prepared for the changes.