Freight shipping is the logistical system that moves materials and finished products between businesses and consumers globally. This system ensures raw materials reach factories and manufactured goods are distributed across vast distances. Understanding how this industry functions provides clarity on the mechanics that support nearly every transaction in the supply chain.
Understanding the Core Definition of Freight Shipping
Freight is defined as commercial goods transported in bulk or in shipments exceeding the size and weight handled by standard package carriers. Freight shipping facilitates business-to-business (B2B) transactions, moving inventory between manufacturers, distributors, and retail locations. This process requires coordinated logistics to manage the movement of goods over long distances. Shipments are usually palletized or secured in specialized containers to ensure stability and maximize the efficiency of loading and unloading using mechanized equipment.
Distinguishing Freight from Standard Parcel Shipping
The distinction between a standard parcel and freight is based on size, weight, and handling requirements, influencing the pricing structure. Freight is generally classified as a shipment exceeding 150 pounds or too large to be handled manually.
Standard parcel carriers handle small, individual boxes sorted automatically without mechanized equipment. Freight shipments are usually palletized, requiring mechanized equipment for handling at every stage.
Parcel pricing uses dimensional weight, while freight pricing relies on freight classification. For instance, shipping five pallets of books to a warehouse is freight, unlike sending a single box via a package service.
Primary Modes of Freight Transportation
The movement of commercial goods utilizes four primary transportation modes, each offering a distinct balance of speed, capacity, and cost efficiency. Decisions about which mode to use depend on the type of goods being moved, the distance, and the required delivery timeline.
Truck Freight (Road)
Trucking is the most common and flexible mode of freight transportation, providing door-to-door service using existing roadway infrastructure. Trucks handle both long-haul interstate transport and final-mile delivery to specific business locations. While generally faster than rail or ocean transport for domestic routes, trucking has lower capacity compared to maritime vessels and is subject to traffic and fuel cost fluctuations.
Ocean Freight (Maritime)
Ocean freight provides the highest capacity and the lowest cost per unit for international shipping. It is the preferred choice for the vast majority of non-perishable global trade. Massive container ships carry thousands of standardized steel containers, achieving economies of scale over long distances. The trade-off for this high capacity is speed, as maritime transport typically involves transit times measured in weeks.
Air Freight (Aviation)
Air freight is reserved for high-value, time-sensitive, or perishable goods due to its high operating costs and low weight capacity. The speed of air transport is utilized for items like pharmaceuticals or electronic components where rapid delivery minimizes inventory holding costs or prevents spoilage. While the fastest option, air freight is generally the most expensive mode available.
Rail Freight
Rail transport is a cost-effective option for moving heavy, bulk commodities over long domestic distances, such as coal, grain, or lumber. Trains are efficient, hauling hundreds of tons of cargo with lower fuel consumption per ton-mile compared to trucking. Rail freight often requires intermodal transfer, utilizing trucks to move containers between the rail terminal and the final origin or destination.
The Difference Between Load Sizes
Within the trucking sector, freight shipments are categorized based on how much space they occupy inside the trailer, which determines the operational model and pricing. These load size distinctions are important for managing the economics of domestic road transport.
Less Than Truckload (LTL)
Less Than Truckload (LTL) shipping involves multiple shippers sharing space on a single trailer because their individual shipments do not require the entire capacity. The LTL model operates via a hub-and-spoke network, where shipments are consolidated at an origin terminal and then moved to a destination terminal for final delivery. This method allows smaller businesses to access freight services without paying for unused trailer space, but it introduces multiple handling points.
Full Truckload (FTL)
Full Truckload (FTL) occurs when a single shipment occupies an entire trailer, or when the shipper requires the dedicated use of a trailer for security or speed. FTL shipments move directly from the origin loading dock to the destination dock without intermediate stops or handling. This direct route reduces transit time and minimizes the risk of damage, making it the preferred method for high-volume or fragile goods.
Partial Truckload (PTL)
Partial Truckload (PTL) is an intermediate option for shipments too large for the LTL network but not requiring a full FTL trailer. PTL shipments typically travel on the same dedicated truck from origin to destination as FTL, but the carrier may fill the remaining space with other partial loads. This method offers a middle ground in pricing and handling, avoiding the multiple transfers associated with LTL.
Essential Freight Documentation and Terminology
Navigating the freight industry requires familiarity with specific documentation and terminology that govern the movement, liability, and cost of shipments. These standardized elements ensure clarity and accountability across the logistics network.
Bill of Lading (BOL)
The Bill of Lading (BOL) is the most important document in freight transport, functioning as a legal contract, a receipt for the goods, and a document of title. It must accurately detail information such as the shipper and consignee addresses, the number of handling units, the weight, and the description of the goods. The BOL provides instructions to the carrier and is required at every transfer point to verify the custody and contents of the shipment.
Freight Class and NMFC
Freight Class is a standardized numerical classification, ranging from 50 to 500, designed to standardize pricing for LTL shipments based on the product’s transportability. This classification is determined by the National Motor Freight Traffic Association (NMFTA) and published in the National Motor Freight Classification (NMFC) guide. The class is calculated by considering four factors: density (weight per cubic foot), stowability, ease of handling, and liability (value and risk of damage). A low class number indicates a dense, easily handled, low-value product, while a high class number signifies a light, bulky, or fragile item that takes up disproportionate space.
Accessorial Charges
Accessorial charges are fees added to the base freight rate for services performed by the carrier beyond standard dock-to-dock transportation. These services include specialized requests like a liftgate service, required when a delivery location lacks a loading dock and needs a hydraulic lift. Other common accessorials involve residential delivery, inside delivery, or limited access location fees, representing extra time, equipment, or effort expended by the carrier.
Key Factors Determining Freight Shipping Costs
The final cost of a freight shipment is determined by several variables reflecting the resources consumed by the carrier. The distance and lane—the route between origin and destination—establish foundational costs related to fuel, driver time, and equipment wear. Longer distances or routes with less carrier availability typically incur higher base rates.
The shipment’s weight and size are factored into the cost, as heavier shipments require more fuel and restrict capacity due to legal weight limits. For LTL pricing, the assigned freight class is a primary factor, as a lower class indicates a more efficient product to transport, resulting in a lower rate.
Additionally, required service levels, such as guaranteed or expedited shipping, add a premium. Dynamic market conditions, including fluctuating fuel surcharges and low industry capacity, can also cause rate increases.
The Step-by-Step Freight Shipping Process
The process begins with the shipper preparing the freight by palletizing, crating, or boxing the items, and accurately weighing and measuring the final dimensions. The shipper then obtains a quote from a carrier or broker, providing all shipment details to determine the rate and secure transportation. Once the booking is confirmed, the Bill of Lading (BOL) is generated, serving as the official record and instructions for the carrier.
The carrier dispatches a truck for pickup, and the driver verifies the shipment count against the BOL before signing the document, formalizing the transfer of custody. During transit, the shipment is tracked through the carrier’s system. It moves through terminals if it is an LTL load, or travels directly if it is FTL.
Upon arrival at the final destination, the receiver inspects the freight for damage and counts the pieces. They then sign the Proof of Delivery (POD) document, which confirms the shipment arrived complete and officially ends the carrier’s liability.