Pricing issues as a result of Item 680? Click here to get in touch with our team.
Have you heard of Item 680? It's the NMFC rule commonly called the “65% Rule”.
Item 680 says that if you (the shipper) fail to utilize at least 65% of the surface area of a pallet or skid OR fail to utilize at least 65% of the volume of a crate or container, the carrier can classify the freight as either a pallet/skid or as a crate/container.
So what does that mean?
Pallets are classified as NMFC 150400 whose class is based upon the standard 11-sub density scale. Once a carrier determines you failed to use at least 65% of the pallet’s surface area, they can reclassify your freight based on the table below.
Example: If you determine your commodity was CL60, but the pallet’s density is 13 PCF, the carrier can change the class to CL85 – essentially if your commodity does not utilize the pallet’s surface area properly, this rule says you are shipping a pallet!
The same goes for a crate which is NMF 29785. Its class is also based upon this standard 11-sub density table. If your compressor or machine does not fill up 65% of the crate, then the carrier can classify your shipment as a crate and adjust the class accordingly.
Have you noticed this pricing issue with your shipments? Reach out today and see how you’ve been affected by the “65% Rule”.
🚫 The Problem: NO Consideration for Freight Density
We have to ask ourselves why this Item 640, or the 65% rule, even exists. The answer is that too often, carriers handle shipments whose class on the BOL does not conform to the density of the shipment. If you have a shipment declared at CL65 but its density is only 7 PCF, the carrier should get compensated at CL125, not CL65.
Item 680 exists because commodities like equipment and machinery fabricated from metal (such as valves and engines) can have a class that does not properly consider the density. These commodities may be incredibly dense and thus deserving of a low class if tendered properly.
Example: A 300 lb. valve that is 18” x 18” x 18” may be 60 PCF. But if you bolt it to a 40” x 48” skid, the total density is only 9 PCF. That’s a big difference.
Another common example is a commodity like oil that is shipped in barrels (pictured above). A pallet containing 1 barrel takes up the same space as a pallet containing 3 barrels.
Graphic by Diversified Transportation Services
Those two pallets may get the same class, which is not fair at all to the carrier receiving the pallet with just one barrel.
The same thing applies to TVs. Think of the impact on the carrier if one pallet contains a single 55” TV and another contains 6 of the same 55” TVs. Should the same class apply? No.
✅ The Solution: Classification by Density, not by Class
One solution is that the NMFC needs to be fixed to account for density, for all commodities properly. For starters, any commodities that are tendered on a pallet should be classified by density and period. No need for protective rules like Item 680 to account for the NMFC’s shortcomings.
Another solution is that carriers can roll out new pricing programs that either use just density to determine the class or don’t even use class at all.
These solutions cannot come fast enough. The LTL industry needs simpler pricing and fewer rules.
This article was collaboratively written by “LTL Observers” - a collective of industry veterans spanning the carrier, shipper, 3PL, and tech provider spaces who are willing to share their opinions.
These opinions may not always be right, but the intent is to promote critical thinking and engagement that moves the LTL industry forward so that our tomorrow is always better than our today.