Q: As I’m sure you’re aware, the National Classification Board has approved a change in the classification of clothing from class 100 to a range of classes, from 70 to 400, based on density.
We’re a moderate-sized retailer dealing mainly with clothes, and we order clothing pre-distributed by store, in boxes. In addition, we have a replenishment system that generates fill-ins for stores, with some of the store quantities being very small but nevertheless necessary. These result in irregular carton sizes in many shipments.
Until now, I’ve never had to deal with density issues on the products I’ve had shipped to my company. Pounds per cubic foot on a per-carton basis seem to run anywhere between two and 12 (I am in the process of taking sample measurements).
The move to dimensional pricing seems to me ripe for runaway expense. Simply put, if you ship 36 12-inch-by-12-inch-by-12-inch cartons weighing eight pounds each loose (not on pallets), the cartons are one cubic foot, eight pounds per cubic foot, class 100 in the new classification.
However, if a supplier tendered the same cartons to a carrier on a standard 48-inch-by-40-inch-by-5-inch pallet, the cube becomes 45.56, with a weight of 328 (36 times 8, plus 40 pounds for the pallet) and the pounds per cubic foot become 7.2, bumping the cartons up to class 125. There are a lot worse scenarios than this.
Do you think carriers’ pallet scales and measuring equipment are trustworthy? Is there a way to circumvent the dimensional issue, perhaps by avoiding pallets being used in the measurement process? Am I forced to measure every shipment and perhaps tell all my vendors to floor-load everything?
With throughput a key factor in logistics, no one wants to start auditing weights and measures on every freight bill. But not doing so leaves one open to a whole new source of “unaudited revenue” for carriers.
A: I’m not sure what you want me to say.
If you want me to say I feel your pain, hey, you got it. But if you want me to inveigh against the carriers’ “unfairness” for demanding this “unaudited revenue” (however you come by that), sorry, I can’t join you there.
For nearly as many decades as I’ve been in the industry, I’ve been saying surface transportation carriers sell by cube but bill by weight. That is, the typical shipment “cubes out” the vehicle — occupies its total cubic capacity — long before it reaches a weight maximum.
To illustrate, if a 53-foot trailer could be stuffed chock-a-block with your eight-pound cartons, no wasted space at all, the load would weigh 27,648 pounds — about 20,000 to 25,000 pounds less than the legal ceiling. Even though another load of some alternative commodity might weigh thousands of pounds more, all the carrier can bill for is those 27,648 pounds actually shipped.
Can you really blame the carriers for wanting to adjust their rates to allow for density?
In your example, one problem is that the “standard” pallet you postulate is oversize for the load. Cut the pallet size to only what’s needed — 48-by-35-by-5 — and the shipment density remains eight pounds per cubic foot, and there’s no change in class rating.
The result is the same if you go to a slip sheet instead of a pallet — no change. Or, as you say, you can stick to floor loads and eat the reduced productivity resulting from more labor- and time-intensive unloading.
But you’d rather pass on the productivity loss to the carriers, by getting what amounts to a free ride for those capacity-consuming cubic inches occupied by your pallet, thereby depriving the carrier of incremental revenue opportunities. I sympathize, but only from your perspective, not that of the carriers.
If you question the accuracy of the carriers’ weights and measures, you can always double-check yourself and, where appropriate, adjust the freight bill before you pay it. As to eliminating pallet weight and dimensions from the measurements, well, see above for the carriers’ side of that question.
Shippers of many other commodities have managed to adjust to the density factors that have been increasingly applied to rating over the years, as carriers have sought to equalize their revenue opportunities in the bill-by-weight, sell-by-cube environment existing in today’s transportation market.
I can fully understand that you, not being used to it in your industry, are annoyed at having to make that adjustment. But under the circumstances, I’m afraid I don’t think it’s all that unreasonable for the carriers to demand you do so.
Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.