How the National Motor Freight Code Overhaul (and Tariffs) Will Affect You

The NMFC changes will focus on: 

• Standardized Density Scale: Implementation of a standardized density scale for LTL freight. 
• Unique Identifiers: Introduction of unique identifiers for freight with special handling, stowability, or liability needs. 
• Condensed Commodity Listings: Modernization and condensation of commodity listings.
• Improved Usability: Enhancements to the ClassIT® classification tool.

The NMFC system has been a cornerstone of the freight industry for decades, providing a standardized framework for determining shipping rates based on commodity characteristics. However, the system's limitations have become more apparent over time, necessitating a comprehensive overhaul. The upcoming changes aim to address inefficiencies, improve space utilization, and align with modern technological advancements.

As shippers, it's crucial to understand the upcoming changes to the NMFC system and prepare accordingly. These adjustments will directly impact your shipping costs and overall operational efficiency. By evaluating all your current and past LTL shipments, you can identify those with less density that will see a price increase and those with more density that will benefit from cost savings.

In a perfect transportation world, it’s a flush if, on the other hand, a net loss is identified; proactively communicating these upcoming cost increases to your customers will help them prepare in advance and mitigate the impact of any sticker shock. Also, highlighting potential savings for more dense shipments can offset increased costs. 

Here's a breakdown of how the changes will affect different shipment densities: 

• Less Dense Shipments: The cost of shipments with densities lower than 4 pounds per cubic foot will increase. For example, a shipment that previously cost $100 might increase to $150 or more. 
• More Dense Shipments: Costs will decrease for shipments between 4 and 6 pounds per cubic foot and those heavier than 8 pounds per cubic foot. For instance, a shipment that costs $200 might decrease to $150.
• Unchanged Costs: Shipments with densities between 6 and 8 pounds per cubic foot will retain the same rate; for example, a shipment costing $180 will remain at $180.

 

The changes to the NMFC system will occur in phases: 

• January 30, 2025: Official docket release with proposed changes. 

• March 3, 2025: The public review period for submitting proposals and feedback ends. 

• May 3, 2025: The first series of changes under Docket 2025-1 will go into effect. 

• August 2025: NMFTA will host listening sessions for carriers, shippers, and 3PLs to discuss the changes and gather feedback. 

• Ongoing Phases: Additional changes will be implemented throughout the year. 

The upcoming changes to the NMFC system will have a significant impact on various everyday products shipped within the United States. Understanding how these changes affect specific items can help shippers better prepare and adjust their strategies. Here are some examples of products that will be notably affected by the new classification system: 

• Furniture: Items such as sofas, chairs, and tables are bulky and occupy a significant amount of space relative to their weight. 

• Mattresses: These are large and relatively lightweight, making them less dense. 

• Bedding: Pillows, comforters, and blankets are fluffy and occupy a lot of space. 

• Plastic Storage Containers: These are often lightweight but occupy considerable space. 

• Toys: Large, lightweight toys, such as stuffed animals and plastic playsets, are less dense and occupy more space. 

While there are potential savings for more dense shipments, the combined effect of LTL classification changes and tariffs results in substantial cost increases for these products.

Understandably, shippers feel overwhelmed by the upcoming changes, which will significantly impact their bottom lines, consumer satisfaction, and wallets. These financial pressures require careful planning and strategic adjustments to manage the evolving landscape effectively.

For the latest Tariff Rates, use the International Trade Administration's Global Tariff Finder Tool.

• Transportation/Route Optimization: Analyzing current transportation results against expectations is crucial for identifying areas of improvement. Shippers can ensure their transportation processes remain efficient and cost-effective by regularly reviewing performance metrics and adjusting strategies based on any lack of performance or changes in business needs.
• Optimizing Packaging: Redesigning packaging to reduce space and increase shipment density can significantly lower shipping costs. 
• Internalizing Transportation: Utilizing or building personal fleets can help shippers offset some of the financial challenges posed by the upcoming changes. This approach allows for greater control over shipping processes, optimizing routes, schedules, and load capacities more efficiently.
• Shipper Checklist: Download this handy checklist to help "How to Prepare for the NMFC Changes on July 19, 2025"

• Deregulation and Support: The current administration's focus on deregulation may streamline the implementation process, reducing bureaucratic hurdles and supporting the NMFC overhaul.
• Economic Pressures: While tariffs and increased shipping rates create short-term financial pressures, the long-term benefits of improved efficiency and cost reduction provide a compelling rationale for the overhaul.

As we navigate the whirlwind changes experienced during Q1 of 2025, it's important to acknowledge these developments' significant impact. Rising tariffs and the impending NMFC reclassification have created a landscape of uncertainty and financial pressure. As an industry, it’s time to develop and face a different reality with resilience and adaptability. 

As we’ve already experienced, tariffs are here today. However, they may be gone tomorrow, and the NMFC reclassification may still be subject to change, especially with the current administration's focus on deregulation. It's crucial to stay informed and brace for impact (it will be a bumpy road). 

 

This article is based on SupplyChainDive's How shipping costs will change in upcoming LTL classification shift.