The 65% Rule

There are lots of commonly seen numbers in LTL.  48 and 40 are standard lengths and widths for pallets.    Pup trailers are 28 feet long.  One of the lesser known yet very important numbers is 65.  Why? Item 680 (yep, another number) in the NMFC Guidebook is why.

Item 680 allows LTL carriers to classify your palletized load as a pallet, or your crated goods as a crate.  The logic is that if you fail to cover at least 65% of the surface area of a pallet, or less than 65% of the cubic capacity of a crate, then you are shipping a pallet or a crate.  And those two commodities, following recent classification changes, are now both classified based strictly upon density ranges.  Specifically, the 11-sub range that goes from CL60 for 30+ PCF to CL400 for less than 1 PCF.

Stated another way, ship a single CL60 Pump bolted to a pallet, it might not be a pump in terms of classification.  If the pump takes up less than 65% of the surface area of the pallet, you are actually shipping a pallet.  And the carrier may adjust the class based upon the density.  The resultant class could very well be above CL60.

Same thing applies for that CL125 Compressor you are shipping in a crate.  Ship it in an oversized crate, you may be shipping a CL200 crate rather than a CL125 compressor.  Note that your FAK may not protect you here.

The FCDC at the NMFTA made these classification changes to pallets and boxes/crates based upon density studies that found very wide density ranges.  It’s not that the NMFTA was studying the density profile of pallets or crates, as no one really ships empty pallets or crates as a shipment.  Rather, they were studying the density profiles of all goods transported on pallets and in crates.

This rule, as you can surmise, is designed to account for existing classifications of items where the class does not modulate based upon density, or modulates with a wide density range.  There are lots of such items; foodstuffs, boots/shoes, and food processors just to name a few.  Ship a pallet of lima beans that covers the skid well, pay CL60.  Ship just a few cartons of Lima Beans, leaving a lot of space on the pallet, pay CL100.  This rule is designed to compensate the carrier properly when the density of the shipment does not conform to the class.

So what do you do as a shipper to protect yourself?  It all starts with knowing your shipment dimensions and thinking about your freight profile from the eyes of your carriers.  If you know how big your pallet is before carrier pickup, you can help ensure this rule does not produce an unpleasant invoice surprise.  You can also consider simple solutions such as cutting standard pallets in half for small orders and teaching employees to not pyramid-stack cartons unless absolutely necessary.  And reconsider the use of cones as they can exacerbate the reclass impact.

Next time a carrier reclasses your freight and you ask them what commodity they say you shipped, don’t be surprised if they reply that it was a crate or a pallet.