You must know what an LTL freight contract includes to practice business logistics better and save money. Knowing contract elements, you can adequately address your shipping needs, making it easier and faster.
Here, we will discuss the elements of contracts prepared by LTL freight brokers.
Pricing and rates
The foundation of any LTL freight agreement lies in its pricing structure and rates. This gives you the shipping base rate and additional charges, if applicable. LTL freight carrier pricing is built on a complex combination of factors, making the structure challenging to navigate. This part of the pricing module details the factors and available discounts. It allows you to control your costs.
Transit time and service level
Service levels and transit times are clear indicators of the company’s quality of services. This part mentions the kinds of service or timeline windows. You can find components with a particular order delivery expectation per your business requirements for effective outcomes.
Dimensional weight pricing
Dimensional weight pricing is another vital part of an LTL freight contract. It considers variable weight and shipment size. The basic formula for finding the price of dimensional weight is (Length x Width x Height)/DIM Divisor. The LTL freight carrier sets the DIM Advisor.
Billing and payment terms
It is about more than knowing service rates—the contract discusses what and when payments are made. Billing and payment terms contain information about invoicing frequency, available payment methods, and interest charges or late fees for overdue payments. This prevents matter disputes and leads to smooth financial transactions.
Liability and insurance
Carriers are liable for loss or harm to your goods during transit. The liability and insurance element establishes the maximum limits of liability and coverage types. It also sets the nature of submission of claims for loss or damage to goods. Knowing this helps you protect your business against financial losses.
Terms and conditions
LTL freight carriers are held to specific performance standards and other metrics. They are penalized or credited if they do not provide services on this level. Defining service guarantees and penalties helps ensure the carrier has high service levels.
Legal considerations
This part of the contract legally governs LTL freight. The LTL freight brokers mention the legal solutions they implement while shipping goods from one place to another and connecting with another shipper.
Using LTL freight services ensures a structured and clear contract is presented. Find out all the contract requirements and, if needed, seek expert help before you sign the deal. Contact KCH Transportation to secure a quality transportation service and a suitable contract.
