Two of the most common invoice corrections made by LTL carriers today: Reweighs and Reclasses.
Reweighs involve cases where the carrier determines that the weight on your BOL is incorrect by using scales mounted on their forklifts.
In most cases, the carrier determines the BOL weight was under-reported and applies a higher weight… which means a higher charge. Some carriers (the more honorable variety) will correct in the opposite direction when they find the weight to be lower than per the BOL.
Reclasses take place when carriers inspect your freight and our BOL, and they determine that the commodity described on the BOL is not what was tendered.
Inspections used to be performed manually by an inspector armed with a clipboard and tape measure. Today, most inspections are performed via an automated pallet dimensioning machine.
In most cases, the carrier determines that the class for the commodity tendered is higher than the class indicated on the BOL and applies a higher class - which means a higher charge. Some carriers (the more honorable variety) will ALSO correct in the opposite direction when they find the class to be lower than per the BOL.
Inspection and Reweigh Processes
LTL carriers today are commonly reweighing 90% or more of the shipments they handle and are commonly inspecting and measuring 60% or more of those shipments. A few carriers are in the 90% range.
A reweigh can occur anytime a carrier cross-docks a shipment with a forklift; inspections and measurements also commonly take place during the cross-dock process. (Reweighs happen more frequently because carriers have more forklift scales than pallet dimensionalizers.)
LTL carriers also tend to apply reweighs separately from reclasses because the act of reweighing a shipment takes place separately from the act of inspecting (measuring) a shipment. Reweighs almost always take place before the inspection or measurement action.
Why does this matter?
Density-Based Pricing (when Dimensional Pricing is ignored)
Not all carriers make corrections that favor you (the shipper). They may only make corrections that are in their favor.
Example: Say you have a pallet that you determine weighs 500 lbs and is 40” x 48” x 62”. That works out to 7.75 PCF and CL125 based on the standard 11-sub table used by the NMFC.
But let’s say the carrier reweighs your pallet and determines the weight was actually 750 lbs. Immediately, they’re going to re-price your shipment as 750 lbs at CL125, and your shipment charges will go up 50%.
But what if that carrier also measured your shipment, and found that the dims were right at 40” x 48” x 62”? That would put the density at 10.9 PCF and the class at CL92.5.
Does your carrier also now change the class? That is the $64,000 question.
Does your carrier consider the total reweigh and inspection/measurement evidence they gather when they issue an invoice correction, or do they only pick the evidence that leads to a higher charge?
This all makes sense when you consider that the majority of commodities moving LTL are density-based. Now, with the re-direction of the NMFTA, even more commodities are getting classified as density-based.
So if a carrier says a pallet weighs more than what the BOL says, the density should be higher too. Is your carrier considering the re-computed density when they apply a reweigh?
Again, the $64,000 question.
The more honorable variety of LTL carriers will consider both the reweigh and inspection/measurement data they gather and make adjustments based on all of their evidence.
In this case, the carrier may find that 500 lbs (rated at CL125) and 750 lbs (rated at CL92.5) are essentially the same. Consequently, they’ll make no freight bill adjustment and will invoice you for the appropriate amount based on what was actually tendered.
Other carriers, however, will retain the higher 750 lb weight from their reweigh and the higher CL125 classification from your BOL to invoice you for MORE than what was actually tendered.
This is a huge money-maker for such carriers, and it is time they cease benefiting from this.
So what’s an LTL shipper to do? Tell your carriers to make appropriate adjustments when they find that your BOL isn’t accurate?
Sure, you could do that…a better suggestion is to do 2 things:
- Make sure your BOL weights and dims are correct so that regardless of how carriers process reweighs and reclasses, you are not impacted.
- Identify those carriers who follow a fair process of considering all of the evidence (weights and dimensions), and give your business to them.
Tired of chasing money with LTL variances? Connect with someone on our team today to be proactive in protecting your bottom line. With tailored solutions for your unique freight, we’ll give you the support your team needs to finally feel good about invoice time. Reach out now… and #LetsTalkLogistics 😉
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 report their findings and share opinions.
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