PRESSURE TO EXCLUDE CUBE /WEIGHT OF PALLETSCOPY OF CARRIER RELEASE
TO: CHIEF EXECUTIVE OFFICER
Some of our members have alerted us to the fact that some customers and 3PL’s in particular have begun to put pressure on carriers to exclude the weight of the pallets from the calculation of freight charges. This issue was discussed at a meeting of the Tariff Advisory Committee (TAC) and the members asked that we alert the membership to this new trend. Since the vast majority of the shipments are tendered on pallets, exclusion of pallet weight can result in significant revenue loss as demonstrated in the attached Exhibit A.
Currently, and going back many decades, motor carrier tariffs have incorporated by reference packaging requirement and other rules published by the National Motor Freight Classification (NMFC). The rule governing the inclusion of the pallet weight in the calculation of freight charges is one of them. For ease of reference, a copy of this rule is attached as Exhibit B.
As justification for the exclusion, the shippers state pallets are furnished for the convenience of the carriers and therefore should not be included in the freight charges. Pushing this logic further, it could also be argued that all packaging is only for ease of transportation and therefore should also be excluded. Of course, this does not make sense. It should also be noted, our Association performed extensive studies and presented seminars to alert carriers of the nature of the costs related to pallet handling. We prepared booklets for these seminars which contain valuable information. We still have a few on hand and are available at a minimal cost.
Motor carriers’ major source of revenue is from the sale of space on trailers. In order to make profit, the goal of every carrier is to load trailers to full capacity with as much revenue freight as possible, subject to the legal weight limits. The example on Exhibit A demonstrates that the exclusion of pallet weight produces a significant impact. Any trailer moving with any portion of the weight or space occupied with non-revenue freight is a revenue opportunity forever lost. It is also important to note that the exclusion of pallet weight can potentially cause carriers to unknowingly exceed the weight limits since they rely on the sum of the declared weights to calculate the total weight of the load. This of course results in a multitude of problems including fines and penalties.
In addition to customers who knowingly exclude pallet weight, there are many others who do so unintentionally. In the experience of many carriers who have implemented weight and/or cube inspection programs, many shippers unknowingly exclude pallet weight. Since the majority of shippers do not have weight scales on their docks, they used the actual weight of the product which is generally known in the total weight calculation, but do not think to include the weight of the packaging nor the pallet. Weighing and Cubing programs have proved extremely successful in helping customers know the exact weight of their shipments. Carriers who have such programs in place report a high rate of success in the collection of the corrected revenue. In addition to fully recovering the cost of the program, they generate substantial additional revenue. Our Association presented a series of seminars on this subject and the information presented is available to member carriers.
We trust this information will be useful to you and we invite your comment on this or any other topic you may be concerned with.
Exhibit A
| Pallet Weight: 80 lbs. | |
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Exhibit B
| Pallet Dimensions: 4' x 4' x .3' = 4.8 cu.ft. | |
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