DMC Density Minimum Charge – an Alternative Way for Common Carriers to Apply their Minimum Cubic Capacity ChargesPosted On 18th June 2016
The DMC clauses of various tariffs start with what seems a not totally unreasonable proposition:
Any shipment which is 750 cubic feet or greater and has a density of less than six pounds per cubic foot is eligible for a Density Minimum Charge.
I know, you are an experienced shipper or buyer of freight services, and have never heard of DMC, and you don’t ship 750 cft shipments? Unfortunately, you are still in danger even if your shipments are considerably smaller than that.
Basically what a carrier does to a shipment that they judge, at their sole discretion, that cannot have freight on top of it, below it, or next to it – they then use the DMC Clause to recalculate the volume (the “cube) of what you actually tendered into a new number – what they call an “Effective Cube” (Effective Volume) because the carrier is going to charge you for that wasted space on the side of your freight and/or on top of your freight.
Never mind that the Carrier should be able to stack some lighter freight on top of your freight and narrow enough pieces on the side of your freight and that in any case maximizing the loaded cube of their trailers is their business; they use this rule anyway.
Here is how this worked out on a recent shipment, and here is the common carrier’s explanation:
The density minimum charge (DMC) applies for shipments with an effective cube of 750 cubic feet or more, and with an effective density of less than 6 lbs. per cubic foot (PCF).
This shipment’s overall dimensions, as recorded by ABF’s pickup driver on the bill of lading (BOL), are 154 x 93 x 80. The BOL also shows individual dimensions provided by the shipper, which include 4 pallets @ 41x54x80 each and 2 pallets @ 41x54x62 each.
Based on those individual dimensions, it appears these pallets were turned so they could fit side-by-side in the trailer, which would make the individual dimensions 6 @ 54x41x80 each and 2 @ 54x41x62 each, respectively. Extending those individual dimensions out leads to overall dimensions of 162 x 82 x 80, which is close to the dimensions recorded by the pickup driver.
Based on the pickup driver’s dimensions (154x93x80), the actual cubic feet occupied by this shipment are 663.06 cubic feet. However, because the actual width is greater than 71 inches, the effective width is 96 inches [the full truck width]. Similarly, because the actual height is greater than 60 inches (and because the freight is non-stackable), the effective height is 96 inches [the full inside height]. Thus, this shipment’s effective dimensions are 154 x 96 x 96 – 821.33 cubic feet. The effective freight density, based on the weight of 793 pounds, is 0.97 lbs. PCF.
Since the shipment does have an effective cube of more than 750 cubic feet and an effective density of less than 6 lbs. PCF, the bill is rated with class 150 rates at a calculated weight (4,928 pounds) that would bring the density to 6 lbs. PCF.
The density minimum charge is defined in ABF111, Item 611-1, and effective occupancy is defined in ABF111, Item 110, Paragraph 14.
So, the carrier was able to say this shipment was not a 663 cubic ft shipment, but indeed 821 cft of “Effective Cube” and thus subject to double the charges as it was then over the 750 cubic capacity rule of that carrier!
By the way, it isn’t just one carrier doing this, many carriers are applying this rule.
Let us not forget that it is a common carrier’s job to pack his trailers in a way that safely but economically fills the trailer; that we hire them and give them the responsibility to decide if our skids should go on top of other freight or if lightweight freight should go on top of our freight. It is the LTL Common Carrier’s function to put the freight that is for example 71” wide next to a 25” inch wide pallet of heavy pipes which another manufacturer is shipping. That marrying up of freight and proper packaging of it is their function in our marketplace.
In the meanwhile, all shippers or payers of freight need to be aware that common carriers such as ABF, Fedex Freight, SAIA and many others are applying this rule and depending on your freight’s dimensions, this rule might be used against you at any time. It is a major pitfall of doing business with certain common carriers and a good reason to simply get a Volume Quote or Spot Quote from a broker.
Get a volume quote via your online freight broker / 4pl, based on your precise pre-disclosed dimensions and weight for the freight you will tender, on any shipment approaching your carrier’s cubic capacity limits which for some carriers starts as low as 250 cubic feet (you need to find out).
Better than a Volume Quote, get a Spot Market rate with a Contract Carrier via a trusted freight broker partner on any shipment of 250 cubic feet or more.
Generally, the service will be faster, and more direct, will not be moved in transit, and you will have better operational control of the freight (the same pickup and delivery driver’s cell number even).
Freight buyers everywhere must be aware of such rules and work hard to avoid them.