FAK is an acronym used in the shipping industry that stands for Freight All Kinds. 

What is an FAK?

An FAK, or "Freight All Kinds," is a classification used in the shipping industry to group multiple classes of freight into a single class. This is often done to streamline the process of shipping goods and reduce the need for re-classification.

The National Motor Freight Traffic Association (NMFTA) assigns classifications to commodities based on the difficulty of moving the goods, with values ranging from 50 to 500. The higher the classification, the higher the cost per hundredweight due to an increased difficulty in moving the product.

FAKs can be helpful for shippers who are shipping multiple types of products on the same skid, as it allows them to group these products into a single class rather than having to classify each item individually. The goal of an FAK is to reach a price point that is fair to both the shipper and the carrier, and it can be based on an average of the classifications of the goods being shipped.

In some cases, an FAK may be established in advance with a specific carrier or group of carriers, with a set class assigned to a range of different classifications. For example, an FAK may specify that any freight shipped with a classification between 55 and 110 will be classified as class 60. This can help to streamline the shipping process and reduce confusion for shippers.

How is an FAK Determined?

FAKs are only one of a number of factors that determine the LTL freight rates. Here are some of the most factors that are critical and involved in coming up with shipping rates for LTL freight movement:

• Density – The density of a shipment is determined by taking its total weight and dividing it by the total cubic feet taken up by the item. The density is used to calculate the class of the shipment.
• Weight – The more a shipment weighs, the less you pay per hundred pounds.
• Distance – Higher prices per hundred-weight are usually demanded for transportation over longer distances.
• Base Rates – LTL carriers establish their own base rates per 100 pounds (45.36 kg) (CWT). These rates vary between carriers and are based on the classification of the freight to be transported.
• Minimums – LTL carriers are protecting themselves by boosting the absolute minimum charge (AMC) for smaller shipments. This is due to carrier costs being higher for smaller shipments than for heavier ones.
• FAKs – An FAK is negotiated between the client and the freight carrier. It is essentially simply an agreement that the carrier will transport multiple products with different classes as a single freight rate. This can lead to substantial savings by clients as they can significantly reduce the amount paid on higher class shipments by combining them in an FAK.

How Can an FAK Help Your Rates?

FAK can be a helpful tool for shippers looking to streamline their shipping process and reduce confusion around classification and pricing. It's important for shippers to carefully consider whether an FAK may be beneficial for their business and to work with their carriers to negotiate a mutually beneficial FAK arrangement. Here are some examples of situations where shippers will benefit by utilizing a FAK to determine their shipping costs.

• When shipping freight in a low freight class – Carriers will often be willing to negotiate on low freight class shipments since their operations ratios are better for lower classed freight.
• Shipping mixed freight pallets – When shipping a pallet with freight of different classifications, the item with the highest classification is used to determine the class of the entire pallet. If you ship in this manner, negotiating a FAK can lead to considerable savings. *See example above.
• Shipping density-based commodities – Density-based shippers such as industrial distributors that focus on narrow product categories can often achieve better shipping rates by negotiating an FAK with their carrier.
  Conversely, there are some shipping scenarios that do not lend themselves to FAK based pricing strategies. Among them are:
• Shipping high-value items – FAKs can cause issues when attempting to file claims for damaged goods. Carriers will often only be responsible for the freight class being paid, not the actual class of the individual components of the shipment. Your high price items will only achieve the protection of the averaged FAK classification.
• When the majority of your shipment is lower classed freight – a FAK doesn’t really make sense from the carrier’s or the shipper’s perspective.

One of the benefits of using a TMS is that it can eliminate the need for FAKs (Freight All Kinds) in some cases. With a TMS, you can dynamically rate shipments of multiple classes easily, without the need to group them into a single class. This can save time and reduce the risk of errors in classification.

However, it's important to note that FAKs can still have their place in the world of less-than-truckload (LTL) shipping. In some instances, they can provide substantial benefits for shippers and carriers, particularly when shipping multiple types of goods on the same skid or when shipping goods with fluctuating classifications. Care should be taken to ensure that your particular type of shipments can take advantage of what a FAK has to offer.