For individual shippers and small businesses, freight shipping terms can be confusing. There is a huge variety of different words and abbreviations, and it's hard to memorize them all. If you are shipping freight, there are a few key terms you should know. Being aware of the correct meaning of these freight shipping terms will help you navigate the industry and avoid shipping mistakes.
The bill of lading, or BOL, is the most important document in freight shipping. It is the main contract between the shipper and the carrier that outlines all the arrangements, terms and conditions, addresses, and other additional information about your freight shipment. It is crucial to correctly fill in your BOL in order to avoid extra charges or other issues.
There are two primary shipping modes in trucking: less-than-truckload (LTL) and full truckload (FTL). There are many differences between these two modes, but the main one is that in LTL shipping, you only use a part of a trailer’s space, while in full truckload your freight takes the entire capacity. LTL and FTL also have different pricing mechanisms because, in less-than-truckload shipping, the rate is mostly defined by the shipment’s destiny.
If you are going to ship LTL, freight class should be an essential term in your glossary. A freight class is a specific code assigned to the shipment. There are 18 classes, from 50 to 500, created by the NMFTA (National Motor Freight Trucking Association). This code is mostly defined by a shipment’s density, which means the less dense your freight is, the more it will cost to ship it.
A delivery appointment is an additional service in LTL shipping, which means there is a specific time set up with the consignee to meet and deliver freight. Since it is considered an additional service, you will have to pay for it.
Freight insurance is an important document that is purchased to protect your goods and cover their value in case of shipment loss or damage. Freight insurance should not be confused with carrier liability, which is usually limited and will not refund the full cost of shipment in most cases.