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Carriers Are Using CMC to Dodge Negotiated LTL Rates

posted in Less Than Truckload by

There are several ways in which LTL carriers charge for freight shipping, which we discuss in our post, Do you know the difference between AMC, CMC, and MIN?. But the latest addition of CMC, for many, feels like another way for LTL carriers to dodge the already high negotiated rates.

Carriers avoiding negotiated rates on LTL

What is CMC?

CMC or Cubic Minimum Capacity is a relatively new pricing parameter used by shipping carriers. While other methods of pricing, including Absolute Minimum Charge (AMC) and Minimum Rate (MIN), have been industry standards for years, CMC is a way for carriers to charge a premium on freight shipments that are larger than they consider normal.

The CMC Rule

Cubic Minimum Capacity is a minimum cubic capacity standard set in place by the shipping carrier. Many shipping carriers now use CMC to charge shippers and third party logistics companies (3PLs) a premium fee for shipments that are larger than a specific size.

The CMC Rule varies by carrier, but generally, carriers now charge a CMC fee for any shipment that is 750 cubic feet or more, with a density of less than six pounds per cubic foot. Cubic capacity is calculated using a simple formula: Height x Width x Length. To find out what the CMC is for your carrier, either talk to the team at Amware or contact the carrier directly.

How CMC Affects Freight Shipping Fees

As carriers continue to roll out this new pricing parameter, it will begin to affect shippers and 3PLs. The most direct affect for shippers is likely to be the increased price of pallet shipping. Before the imposition of CMC, dimensional weight or volumetric weight (sometimes called DIM factor) was often used to calculate freight class and cost. With the addition of the CMC parameter, shipping class may no longer be a means of savings for shippers or 3PLs at all.

Navigating the CMC Rule

Amware is in the process of adding the CMC parameter to the Amrate software so shippers can get an accurate price estimate for their freight shipping. However, there are several ways shippers can also work to prevent the CMC rule from severely affecting the cost of shipments:

Take accurate measurements.

Err on the side of caution and be sure to have approximate weight and cubic capacity measurements when quoting your shipment. Include the pallet and packaging in your measurements and always measure by the largest height, width, and length. Inaccurate measurements could mean high, unexpected fees later.

Know the rules before you ship.

If you’re not sure whether a particular carrier has a CMC rule, talk to your 3PL or contact the carrier directly. Be sure you know whether the CMC fee is included in the quote or not before you sign the bill of lading.

Follow the bill of lading.

It can be tempting to ignore that last half inch and exceed the limitation listed on your shipment’s bill of lading. But it could cost you big time later if you get a cubic capacity violation and fee.

Learn More

Want to better understand how carriers charge for freight shipping? Start with our article, Do you know the difference between AMC, CMC, and MIN?, then contact the team at Amware to learn more about how CMC will affect your shipping costs. You can also request a FREE 30-Day trial of Amrate, Amware’s best-in-class LTL shipping software below.

Amrate 30-day free trial

31 May, 18

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