FAK (Freight All Kind)

content
1) Introduction
2) Commodity classification
3) Classification table
4) FAK Definition
5) Advantages
 FAK (Freight All Kind)

In LTL freight every commodity has a specific “Classification” or “Class”

associated with it.
The NMFTA(National Motor Freight Traffic Association) is responsible for
identifying and classifying every commodity with one of 18 values
ranging from 50-500. They take into account multiple factors that
determine the overall move-ability of the freight. As the class increases,
the cost per hundred weight also increases to accommodate the more
difficult freight.

As shippers began to find themselves moving a variety of commodities

on a single pallet, they requested an easier solution to group multiple
items to save both time and reduce re-classifications. The simple idea
was to choose one class that averaged all items shipped so that the price
was fair for both shipper and carrier. This was the beginning of the FAK or
Freight All Kinds.
According to product, CLASS are made ,classifications made,
According to that billing will be done,

The National Motor Freight Commission (NMFC) provides 18 classes of

freight ranging
from Class 50 to 500. Generally, lower class numbers equal cheaper
freight rates.
To determine the freight classification, we look at:

• Dimensions: How big is it?

• Weight: How heavy is it?
• Ease of Handling: How simple/difficult is it to move?
• Value: How much is it worth?
• Liability: How much would it cost to replace it, and what is the risk of
theft and/or damage?

ClassIT:- is a tool which provides by National Motor Freight Classification

(NMFC) to
carriers and shippers that compares commodities moving in interstate,
intrastate and foreign commerce. Commodities are grouped into one of
18 classes based on an evaluation of four transportation
characteristics: density, stowability, handling and liability. Together,
these characteristics establish a commodity's transportability. The
NMFC thus provides both carriers and shippers with a standard by
 Class Name Cost Notes, Examples Weight Range Per Cubic Foot
Class 50 – Clean Freight Lowest Cost Fits on standard shrink-wrapped 4X4 over 50 lbs
pallet, very durable
Class 55 Bricks, cement, mortar, hardwood 35-50 pounds
flooring
Class 60 Car accessories & car parts 30-35 pounds
Class 65 Car accessories & car parts, bottled 22.5-30 pounds
beverages, books in boxes
Class 70 Car accessories & car parts, food 15 to 22.5 pounds
items, automobile engines
Class 77.5 Tires, bathroom fixtures 13.5 to 15 pounds
Class 85 Crated machinery, cast iron stoves 12-13.5 pounds
Class 92.5 Computers, monitors, refrigerators 10.5-12 pounds
Class 100 boat covers, car covers, canvas, wine 9-10.5 pounds
cases, caskets
Class 110 cabinets, framed artwork, table saw 8-9 pounds
Class 125 Small Household appliances 7-8 pounds
Class 150 Auto sheet metal parts, bookcases, 6-7 pounds
Class 175 Clothing, couches stuffed furniture 5-6 pounds
Class 200 Auto sheet metal parts, aircraft parts, 4-5 pounds
aluminum table, packaged
mattresses,
Class 250 Bamboo furniture, mattress and box 3-4 pounds
spring, plasma TV
Class 300 wood cabinets, tables, chairs setup, 2-3 pounds
model boats
Class 400 Deer antlers 1-2 pounds
Class 500 – Low Density or High Highest Cost Bags of gold dust, ping pong balls Less than 1 lbs
Value
Definition: FAK (Freight all Kinds) is a pricing mechanism that groups
multiple classes of freight into a single class.
FAKs are tariff classifications for various goods and commodities that
are pooled and shipped at one freight rate.

Choose one class that averaged the items being shipped, so that the
price was fair for both shipper and carrier. Simply, an FAK is a pricing
strategy that allows for multiple commodities to be shipped at the
same freight class

Depending on the volume of the shipper, freight carriers will agree to

ship items at a lower class in order to secure the business of the
customer.
How it works:-
For example, you ship 2 different products on the same pallet to your
customers. The product mix is equally class 50 and class 85.
Negotiating an FAK 60 for everything would be acceptable in this
situation.

This would be a fair tradeoff and welcomed by most carriers.

FAK is useful when

Ship many different items
Ship a wide variety of items
Freight looks and feels like a lower class

FAK is not useful when

ship a few items
freight is justifiably a high class
The FAK rate is typically an average rate that provides savings on freight
at the top of the class range, but an increased price for freight at the
bottom.
Let’s break down a common shipping scenario and examine the pros and
cons.

A carrier typically rates classes as follows:

Class 50: Rate-$100 per pallet

Class 60: Rate-$120 per pallet
Class 85: Rate-$140 per pallet
FAK Rate: $115 per pallet

For a shipment with two Class 50 pallets, one Class 60 pallet, and one
Class 85 pallet, the FAK cost is $460. However, if the product mix
changes or the shipper stops making the Class 85 products and replaces
them with a pallet of Class 50 items, the FAK rate stays the same. But, if
the shipper rates this new mix of pallets at their actual class instead of
the FAK, the cost would have been $420, or 9% less.  
Seasonal fluctuations and shifting consumer demands are common
challenges for shippers; staying on top of classification changes as the
product mix changes is critical.
 alk through an example, using the tariff below to determine a sample rating of a shipment
Zip = 55344
ation Zip = 90210
= 100
= 2100 lbs or 21 CWT
ate for class 100, 2100 lbs = 81.86
1.86 = $1719.06 (the full freight rate without discounts)
riff Rating Example
55344    To:  90210
 Advantages and Disadvantages

1) It allows for much easier rating and reduces re-classification and

billing errors for companies that ship a wide range of products.
2) FAKs are a great tool for shippers and can help in reduce hard
costs as well as soft such as the time it takes to sort through billing
errors.

2) Moreover, it’s almost impossible to benchmark less-than-

truckload pricing accurately
when the FAK-related costs are largely unknown.

3) Transportation management systems usually capture FAK class

information from carriers. If these inputs are inaccurate, then the
system’s analytics will be off base as well.

4) With FAK, good profitable freight suddenly disappeared to

Carriers ,and
If we see what Carriers think of an FAK and their response will be
very negative.