At first glance, you may think I am talking about potholes in roads across America that can swallow your car, or even a tractor/trailer rig. However, there are landmines of another kind that you need to be aware of that exist in the rules tariffs of your trucking companies. Understand that the carriers are not out to get you or pull anything over on you. Rather, they are just trying to protect themselves.
For example, there are quirks in carrier rating systems that allow a shipper to transport nearly a truckload of product from coast to coast for only a few hundred dollars. Obviously, a carrier's costs for transporting a trailer from coast to coast are much greater than a few hundred dollars. Most carriers handling less than truckload (LTL) shipments apply a rate per hundred pounds to their shipments. Even with a high rate per hundred pounds, some high volume, low-density shipments, e.g., pillows or ping-pong balls, simply do not generate enough revenue to cover a carrier's costs - or even come close.
For this reason, carriers have established Cubic Capacity & Density (CC&D) or Lineal Foot rules in their rules tariffs. In effect, they are a minimum charge on high volume, low-density shipments. They are not necessarily a bad thing - as long as you are aware of them. The problem with CC&D-type rules is that shippers sometimes get blind-sided by them.
The way these rules work is that they "kick in" once a shipment occupies 750 cubic feet of a trailer, for example. CC&D rules usually involve a combination of the cubic capacity of a trailer that a shipment occupies, in conjunction with the average density of the shipment. Less than 4 pounds per cubic foot (PCF) is a common density qualifier.
To use our example, if a shipment occupies 750 cubic feet or more of a trailer, and has an average density of less than 4 PCF, a carrier may have a tariff rule that bumps the average density to 6 PCF, effectively increasing the weight and charges of the shipment by 50% or more. Lineal foot rules are similar, but only take into account the number of lineal feet of trailer space a shipment occupies.
In your discussions with your carrier sales representatives, make sure you understand the tariff rules that may affect you. Minimum charges can affect you when you ship small shipments. A single shipment charge may be assessed if you ship only one shipment that is rated at less than 500 pounds. If you have high volume and low-density freight, or freight that is particularly long, you may be subject to Cubic Capacity & Density, Lineal Foot, or Articles of Extreme Configuration rules.
If you ship, among other things, fragile, high value merchandise (computers, electronics devises), used machinery, or used articles, in general, you may find that carriers have placed limits on their liability. Specific kinds of freight may be subject to a "release valuation," which means that, in the event of a claim, a carrier may pay you for less than the full value of the freight. On the surface, this may seem unfair, but keep in mind that the freight rates were developed with the release valuation in mind. If the carrier were liable for the full value of the goods, the freight rates may have been much higher. Proper packaging of merchandise that is subject to a release valuation is a must!
Additionally, an overall maximum liability clause that many carriers have in their rules tariffs is $25 per pound, per package, and $100,000 per shipment, although each carrier's maximum liability may vary. To put this in perspective, over 90% of the freight that moves across America's highways is valued at less than $10 per pound. If you ship or receive high-value merchandise, you may purchase additional insurance from the carriers, but you may not purchase additional insurance for freight that is subject to a release valuation.
