FAK is a term used within the freight and logistics industry when an LTL carrier assigns a single tariff classification for freight that would typically run under several NMFC codes.
The National Motor Freight Traffic Association (NMFTA) created the National Motor Freight Classification (NMFC) tariff to classify all commodities into 18 different freight classes between 50 and 500, but quite often it is difficult to manage multiple classifications for shippers, making FAK a great option for both the shipper and the LTL freight provider.
Reasons for a Shipper to Negotiate FAK Tariff
Simplify the shipping and invoicing process.
A method to reduce tariff and therefore the freight rates being paid.
Shippers Checklist to Validate Whether FAK is an Option
For the right shipper, FAK’s are a great method for shippers to reduce their LTL rates and to simplify the entire LTL process from start to finish.
For an FAK to be assigned, there are some characteristics of the freight that need to align, hence the listing below:
Shipping multiple NMFC freight commodities.
Product stowability is similar.
Freight weight and density is not too different across the commodities shipped.
Qualifier if freight density is very different comes into play if the greater percentage of freight resides in a single NMFC classification and the less dense freight is more of an outlier.
The liability cargo coverage is appropriate for the freight in total under the FAK.
Cargo liability is often an overlooked aspect of an FAK classification that surprises many shippers negatively when they file a freight claim.
So, we suggest paying particularly close attention to this and consider buying supplemental cargo coverage to offset shortages. The supplemental coverage can be on individual shipments or blanket coverage can be purchased.
LTL freight charge minimums are appropriate for all commodities in an FAK classification.
With the above in mind, the LTL carrier will determine which of the 18 FAK commodity codes will make the most sense for the shipper’s freight.
Other Areas FAK’s are Utilized
While most of the discussion in this article has been around a shipper’s freight FAK assignment, freight consolidation is also where one would find FAK freight being used. So, freight forwarders, container freight stations (CFS’s), consolidators, logistics service providers and larger shippers that create their own consolidated loads also operate under FAK tariffs.