The abbreviation CWT stands for Hundredweight, representing a standardized unit of measure used primarily in North American freight rate calculation. This weight unit is a metric for carriers, particularly in Less-Than-Truckload (LTL) shipping, allowing them to establish a consistent pricing structure for various goods. Understanding how CWT functions is important for shippers because it directly influences the base cost of moving products. The calculation of CWT is the first step in the multi-layered pricing process that determines the final shipping invoice.
Defining Hundredweight (CWT)
Hundredweight is a unit of mass derived from the Latin term centum pondus, meaning “a hundred pounds.” In modern US freight, one CWT is defined as exactly 100 pounds, known as the short hundredweight. This 100-pound measurement is the operational definition used across the American logistics industry for calculating shipping costs.
This standard was adopted in the United States to align with the short ton (2,000 pounds, or 20 short hundredweights). This simplification makes it easier for shippers to convert shipment weight into a manageable unit for rate application. CWT allows carriers to quote rates in dollars per hundred pounds, providing a standardized basis for pricing across different shipment sizes.
CWT vs. Dimensional Weight
While CWT measures the actual physical mass of a shipment, carriers must also account for the volume it occupies, which introduces Dimensional Weight (DIM weight). Dimensional weight is a pricing technique that calculates a theoretical weight based on the package’s length, width, and height. This calculation is necessary because a shipment that is physically light but takes up a large amount of space can be unprofitable if billed only by its actual weight.
Carriers use “chargeable weight,” which is the greater of the shipment’s actual weight (measured in CWT) or its calculated dimensional weight. For example, dense metal parts will likely be billed using actual CWT, while a large box of lightweight foam insulation will be billed using its higher DIM weight. The chargeable weight is then converted into CWT units to apply the carrier’s published rate. This system ensures the carrier receives compensation for both the weight capacity and the space occupied by the cargo.
How CWT is Used for Rate Calculation
The application of CWT in pricing is most prevalent in the Less-Than-Truckload (LTL) sector, where multiple shippers’ goods share space on a single trailer. LTL carriers publish their base rates as dollars per CWT ($/CWT), which multiplies the shipment’s chargeable weight. To calculate the base cost, the total chargeable weight in pounds is divided by 100 to determine the number of CWT units.
For example, a shipment weighing 1,500 pounds converts to 15 CWT units. If the carrier’s rate is $30 per CWT, the base cost is 15 CWT multiplied by $30, resulting in $450. Carriers often structure these rates with weight breaks, meaning the rate per CWT decreases as the total shipment weight increases. This tiered pricing model encourages shippers to consolidate smaller loads. LTL shipments are also subject to a minimum weight charge to ensure profitability for the carrier.
The Role of Freight Classification in CWT Pricing
The base rate per CWT is not a flat fee but is adjusted by the product’s assigned freight class, determined by the National Motor Freight Classification (NMFC) system. This system categorizes goods into one of 18 classes, ranging from Class 50 to Class 500. The freight class measures the product’s transportability, considering factors beyond just weight.
The primary determinants of a product’s freight class are its density, its ease of handling, its liability due to potential theft or damage, and its value. High-density goods that are durable and easy to stack are assigned a lower freight class, such as Class 50, which translates to a lower rate per CWT. Conversely, low-density items that are fragile, irregularly shaped, or have high value are assigned a higher class, such as Class 500, which results in a higher rate. CWT measures the weight, while the freight class modifies the rate to reflect the operational cost of transporting that specific type of product.
Practical Steps for Calculating Your Shipment’s CWT Cost
Determining the CWT cost for a shipment involves a clear four-step process that utilizes the weight and classification of the goods.
- Accurately determine the shipment’s total weight in pounds, including all packaging and pallets. Convert this figure into CWT units by dividing the total pounds by 100.
- Identify the correct National Motor Freight Classification (NMFC) for the product being shipped. This classification dictates the rate adjustment factor.
- Find the applicable rate from the carrier’s tariff sheet. This rate is expressed as dollars per CWT ($/CWT) and corresponds to the determined freight class and the shipment’s origin/destination.
- Multiply this rate by the CWT units to calculate the shipment’s base freight cost. For instance, 20 CWT at a rate of $25 per CWT yields a base cost of $500.
It is important to note that this base cost is not the final invoice total. Various accessorial charges, such as a fuel surcharge, liftgate service fees, or appointment surcharges, are calculated and added after the CWT-based rate is applied.