LTL FREIGHT: WHAT IS AN FAK?


FAK stands for Freight All Kinds, and it is an agreement made between a shipper and a carrier that allows different items falling into multiple freight classes to be billed & shipped at the same class. An FAK can be beneficial for shippers with several commodities shipping at multiple classes. This is because they help with simplifying the bill of lading and freight payment process and can also provide savings. It may not make sense or be feasible to pursue an FAK in some instances. Shipper’s volume, product mix and product types (value) are all things that a shipper and a carrier take into consideration before an FAK will be put into place.

Here’s an example of where it may be beneficial: let’s say a shipper has several commodities ranging from class 50 to a class 77.5. They may consider trying to negotiate an FAK 50, which would allow all of their shipments ranging from class 50 up to a class 77.5 to be rated and billed at class 50. This would provide savings for all of their shipments that historically shipped above class 50, and since the range in product class is relatively small (50 – 77.5), it is not unrealistic to achieve.

Comments

Post a Comment

Popular posts from this blog

The LTL Freight Claim Process

Freight damages are certainly not pleasant surprises, but they are inevitable at some point if you are a regular LTL shipper. An understanding of the process will help you be more successful at bringing claims to a satisfactory resolution. WHO FILES THE CLAIM? Typically, the payer of the freight can only be reimbursed for the freight charges, so they are usually the ones to file a claim. Anyone can file a claim, however, but this is usually the simplest way to do it. HOW LONG DO YOU HAVE TO FILE A CLAIM? The answer to this depends on the type of claim being filed. There are generally two types of damage claims, Noted Damage and Concealed Damage. The difference between the two is that noted/visible damage claims were noted at the time of delivery, usually on the delivery receipt, and concealed damages were not. Concealed damages must be reported to the carrier within 5 days of delivery. Anything reported past the 5 day window will not be considered for a settlement and will be d...
Read more

LTL Freight & Concealed Damage Claim Settlements

Concealed damage is much harder to prove because there's reasonable doubt as to who's responsible for having caused the damage. Carriers can't simply take everyone's word that a shipment arrived with damage and can't return every concealed damage shipment back to the shipper free of charge. If they were to do that, they'd go out of business quickly. Let's face it: customers don't always tell the truth. The unfortunate issue with concealed damage is the fact that, unless someone accepts and/or admits responsibility for having caused the damage, it's virtually impossible to concretely determine exactly who was responsible for having caused the damage. There’s no doubt that concealed damages happen and they are sometimes the fault of the carrier. Concealed damage also happens sometimes through no fault of the carrier, and it is sometimes a result of careless handling by another party involved with the handling of the shipment, either before or aft...
Read more

New Concealed Damage Claim Guidelines & Other NMFC Rule Changes Effective 4/18

There are some important changes that have been made in Supplement 1 to NMFC 100-AO regarding guidelines for filing and investigating damage claims. New NMFC guidelines effective April 18 require concealed damages be reported to carriers within 5 days after delivery. Currently concealed damages can be reported up to 15 days after delivery for consideration of a valid claim; however, per NMFC guidelines effective April 18, 2015 the time period for reporting concealed damages is being reduced to 5 days. The closer to the time of delivery that the damage is reported to the carrier the more likely the claimant is to receive some type of settlement offer, but just because the damage is reported in a timely fashion doesn't necessarily mean that the claim will be approved for a settlement. Other changes effective on 4/18/2015 include one day being removed from the time frame allotted for filing suit on a claim. The new time period for filing a suit is two years. Previously, it was two...
Read more