Cubic Capacity Rule/Density Minimum Charges: Common Carrier Handling of Low Density Product on Larger Shipments
Posted On 20th January 2018
For any shipment over 250 cubic feet – beware – normal pricing may not apply. The specifics vary depending on which common carrier you are at the mercy of, and are outlined in the carrier’s tariff. The tariff is the de-facto contract between carriers and their customers, and even though customers do not necessarily sign it, it has been upheld in courts as binding!
Some carriers invoke their cubic capacity rule at 250 cubic feet, others at 500 – depending on their tariff. Also, some carriers will say your skids, since they cannot be double stacked, make all the space above them useless to the carrier. Then they can invoke their density minimum charge rule, which is a way to get your 200-cubic foot shipment classified as 300, and then invoke the cubic capacity rule, thus working in tandem against you. Please see the other blogs on Density Minimum Charges on FreightRun.
One large common carrier takes the actual cubic feet of your shipment, if it is over 250 cubic feet and of low density (from .1 to 5.9 lbs./cubic feet), and multiplies it by 6 lbs. to get what they call the “calculated weight.” This is an arbitrary number where this common carrier has chosen to draw the line – just as the 250 cubic feet is arbitrary. The carrier then multiplies that calculated weight by the rate specified for a class 125 shipment between your origin and destination zip code, and that product is the “gross charge”. Then the normal discount amount for the account being used is applied to the gross charge.
Let’s look at a real example of how this works.
7 skids, 40x48x96”, total weight 2600 lbs., total cubic feet 746.67, actual density 3.48 lbs./cubic ft. (which usually corresponds to Class 250 rate).
If you run that on a carrier website, it will price the load as if the cubic capacity rule does not even exist. You’ll get something like this:
However, the shipment will be flagged after pickup for exceeding 250 cubic feet, and using that common carrier’s “low density product – minimum charges” rule, otherwise known as “cubic capacity” from their tariffs, they will re-invoice you like this:
746.67 cubic feet * 6 lbs. = 15,600 lbs. or 156 hundred weights
Class 125 rate $/hundred weight = $254.62
$254.62 x 156 = $39,720.72 minus same 81% discount = $32,173.78, plus the $1,743.34 fuel surcharge (same 23.1% above) = $9,290.28.
In this example, the carrier would demand $9,290.28, not the $3,256.20 quoted on their online rating system!
If you have such a charge can you fight it? Sure – first step is to get a Volume Quote directly from that same carrier and other carriers and short pay that ridiculous invoice to the amount of their Volume Quote. Make a reasonable argument to revise the $9,290 bill down to their Volume Quote and file an overcharge claim with the carrier. FreightRun can advise you on your situation. Just contact a member of our team and explain the specifics of your situation.
In general, insist on “Volume Quotes” for any freight that might qualify (anything over a couple of skids or a few thousand pounds). Tell the carrier or 3PL the maximum weight and maximum linear feet that your skids will take up on the truck – and tell them the skids are not stackable – and ask for a price based on that. In return for the price they give you, they will suspend normal transit time commitments - they move the freight at their convenience – and they also lower the “release value”. This means they lower their cargo damage or loss liability on your shipment. Therefore, you must insure such Volume Shipments via your online 4PL broker, such as FreightRun. There is a relatively inexpensive supplementary insurance option – take it! It is a great value in the current common carrier world that is operating at capacity with freight being stacked higher and more risks being taken all the time during the handling process.
The other option, if your freight is in danger of being inspected and re-classed or the density minimum charge or cubic capacity rule invoked by common carriers, is to have FreightRun find a contract carrier to move your load. Risks are lower as they do not use terminals (or perhaps just one or two terminals if it is a coast-to-coast move). Contract carriers are available via FreightRun, which uses the rates provided by backhaul carriers in the lane you need. Email or call FreightRun for your specific needs.