By Paul Benfer, Kinetic Supply-Chain Services, LLC
At their meeting on June 11, the CCSB elected to eliminate Item 171. Known as the bump or class bumping rule, Item 171 allowed a shipper to artificially increase the density of a shipment to lower the class. The net result of the elimination of the rule is higher costs for shippers.
How Item 171 worked was simple. In the body of the bill of lading, a shipper would increase the weight per cubic foot to reach the next lowest class. As an example, a shipment that is 190 cubic feet and weighs 570 lbs. has a density of three (3) pounds per cubic foot or class 250. To move the shipment to class 175 simply multiply 190 cubic feet by 4 lbs. to change the class to 175 with a billed weight of 760 lbs. You would need to reference Item 171 in the body of the bill of lading for it be applicable and legal.
Please keep in mind that the difference in rates increased as the density approached the next break. You did not see a savings if a shipment was 2 lbs. per cubic foot and it was increased to 4 lbs. per cubic foot. You did see significant cost savings if the shipment was less than one pound from the next class break. Savings could range as high as 36 percent or more, depending on length of haul and cube.
The elimination of Item 171 is another example of domestic LTL carrier’s attempt to wring every possible drop of revenue out of their customers' freight budgets. Add the cancellation of Item 171 to the carrier incentivized dock weight and inspection programs, the attempt to make every non-dock delivery limited access and the addition of myriad and unspecific rules to carrier rules tariffs. The best way to avoid surprises and unexpected freight surcharges is through a contract. Unfortunately, many shippers do not have the volume to demand one. The other way to reduce exposure is to know your freight characteristics and customer base. Mastery of those two things will allow you to negotiate carrier rules tariff items that could negatively impact freight costs.