You're about to receive an awesome piece of information that will make you look like you look like a real logistics stud or studette the next time you're in the conference room and people start throwing around scary terms like freight class, NMFC and FAK.
First off, I never want anyone to feel inferior when it comes to logistics. That's why I created www.freightsavingstips.com! You'll always find a ton of great info here that will likely be helpful to your business.
But I want to stay on topic so lets delve into the important stuff. In the next few lines, I am going to educate you on what an FAK is and how it could benefit you and your company.
What is an FAK?
An FAK stands for “freight all kinds” and is used as an exception rating by motor carriers for shippers. Every product in the world is assigned a freight class rating by the National Motor Freight Classification Guide (the NMFC) based primarily on the density of the product. The class number that is given to a product is one of three criteria the freight companies use to price a shipment (the other two items used for rating are distance and weight).
However, some carriers will give a shipper an exception rating or FAK. FAK's are most common among shippers who have a bunch of different kinds of classes assigned to their products. So carriers will simplify it for the shipper and rate all of the products under one or two classes instead of five or ten. As an example, 80% of a shipper's product might be class 85 and 20% might be class 100. The freight carrier might move everything at a class 85 (or FAK 85) to make it easier for the shipper, and give the shipper an added discount on the class 100 freight.
NOTE: Carriers are not inclined to give an FAK across a broad scope of classes. If a shipper has ten separate freight classes, the carrier would be more inclined to give a “two tiered FAK”. As an example, a “two tiered FAK” might have all classes from 60 to 125 moving at a 92.5 and everything from 150 to 250 move at a class 200.
Now that I've explained what an FAK is, I wanted to share with you how powerful an FAK can be for you. The chart below was given to me a bunch of years ago from one of my cronies who worked in the pricing department of a major motor carrier. This chart outlines the difference in the percentage of cost an FAK can yield on a shipment.
FAK SAVINGS CHART
What this chart is showing is, if your product is the “Actual Class” on the left hand side, and the FAK the carrier is giving your company is the “Proposed Class” on the top, then the difference in rate is outlined in the chart.
To help you further understand the benefit of an FAK take a look at the chart a little closer. Let's say your actual product ships at a class 100 (see “Actual viagra drugs online Class” on left) and the carrier was willing to move it at a Class 70 or FAK 70 (move your finger over to where the “Proposed Class” 70 is). You would be benefiting from a 28% cost savings advantage, before the carrier even gave you a discount off the list price. Not too shabby aye?
I guarantee 99% of the people reading this ever knew the impact of an FAK or ever saw a chart like this. Now go schedule a meeting next week with your peers so you can tell them how awesome you are!