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FAK Rates: Solutions for High Variety Shippers

Get to know about FAK rates and how they can benefit high-volume shipping. Learn how to send out a variety goods in the same shipment in a way that can save your business time and money.

By

Natalie Kienzle
March 22, 2022
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FAK rates are based on fixed price systems. If you have shipments with a variety of goods, you might just want to package them all together. Much like a cat oozes itself into any available empty space, you can pack different goods together and ship them at the same price with FAK rates. This presents an alternative option to density and size-based shipping. 

FAK rates, meaning Freight of All Kinds, are used by freight forwarders or NVOCC (non-vessel operating common carrier) to provide flat shipping rates based on average density or container size. Items eligible for FAK classification can be shipped together. Shipments are charged at a flat rate instead of by unique commodity. 

Learn more about FAK rate pricing and qualifications to find new solutions for your business needs. 

FAK rates as boxes move along a conveyer system

What is a FAK Rate?

FAK rate is a type of flat rate in shipping. The abbreviation stands for Freight of All Kinds and is used to show that different types of goods can be shipped together for one price. The FAK rate is based on the size of the container or the average density of a shipment. 

For international shipping through an NVOCC, rates will cover a 20-foot marine container (TEU) or 40-foot marine container (FEU). Any acceptable items that can be placed in the container will ship for the same price. 

Ocean carrier rates vary based on the shipping lane and type of container. Rates are likely to be higher for reefer containers versus dry containers. This is assuming the ocean carrier will even offer a FAK rate for reefer units.  

FAK rates for LTL (Less Than Truckload) carriers look a little different. Since LTL carriers take on multiple orders of different sizes, a FAK rate based on dimensions would be challenging.

Instead, shippers can negotiate a FAK rate based on the average freight class (determined by density) of the items being shipped. Using this method, carriers may customize FAK rates for individual clients and individual shipments. 

See our article on LTL Freight Classes for more information on shipping based on density calculations. 

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Why Are FAK Rates Offered?

The process of calculating shipping rates grows more complex as variety increases. This is true for both ocean carriers and trucks. FAK rates are offered as a way of simplifying the price calculations for clients needing to ship large varieties of goods at the same time

Rates for LTL shipping are typically based on the National Motor Freight Traffic Association’s (NMFTA) freight class system. Each commodity gets assigned an NMFC (National Motor Freight Classification) code that determines the tariff rate applied to it.

Imagine you need to ship five types of merchandise and each has a different freight class. Not only would you need to package each separately, but each would also need to be calculated individually. Quotes for such orders may take longer and be frustrating for both you and your carrier. 

An NVOCC may offer FAK rates due to the sheer amount of containers that can be placed on a cargo ship. The average ship can hold 10,000 TEU to 21,000 TEUs. The ship may also be carrying containers for hundreds, if not thousands, of different companies. 

Calculating individual commodities for each company, and then for each container, can turn into a logistical nightmare. FAK rates make it possible for quotes to go out quickly and minimize loading delays.

Looking for a solution to move truckload freight? R+L Global Logistics handles truckload shipping. Let us know when and we'll handle the rest.

What are the Benefits of FAK Freight Shipping? 

As an importer or business owner, getting your shipments in effectively and with as little red tape as possible saves time and money. FAK freight options have the potential to help with both aspects. 

The variety of different commodities businesses might ship can make LTL freight rates complicated to quote. Limited space on cargo vessels may cause some to take on FAK rate cargo that is easily invoiced over more complicated shipments that consume more time and labor. 

Benefits to your business may come in the form of:

  • Transparent pricing options: Quotes are often straightforward and don’t need individual calculations. This makes pricing simple and easy to understand.     
  • Fewer invoice errors: Fewer details involved mean the shipping and invoicing process is less likely to have mistakes that cost more money to fix. 
  • Stabilized pricing: If you are able to get consistent FAK rate quotes, prices for B2C and B2B product sales may be more stable.  
  • Increased product variety: Individual tariff rates don’t have to hold you back from introducing new products to clients, especially if you are just ordering a sample size to test first. 

Each of these benefits is a possibility. Some offer a way to save money, while others present you with opportunities to grow your business with less risk. 

There are other factors involved that may affect the overall benefit. These include:

  • Frequency in importing or domestic shipping
  • Value of items being shipped
  • Average quantities 
  • Extent of variety
  • Average weight and density
  • Ease of packaging

Working with a freight broker who can negotiate freight rates on your behalf may help you make a decision. FAK rates can be affected by a wide range of factors and you may need expert advice to see if it really is the best thing for your business. 

Two female workers monitoring boxes coming down a delivery chute.

How is the FAK Rate Calculated?

Depending on how much you need to ship, FAK rates are calculated differently. LTL carriers often base FAK rate calculation on the average freight class rank of the different cargo being moved. 

If you need to transport five different items, they may look at the average freight class among them. Based on items that range from class 55 to class 125, you may negotiate to pay the entire shipment as a class 85 tariff. 

Mean Density Class Calculation

Most Dense ItemsLeast Dense ItemAverage Density
Class 55 (35 - 50 lbs/ft³)Class 125 (7 - 8 lbs/ft³)Class 85 (12 - 13.5 lbs/ft³)

Whether an LTL offers an average density FAK classification may depend on other factors as well. If a higher class item is also difficult to package or takes up a significant portion of the space, the FAK rate may be higher. If different items can be put in the same crate or pallet and be stacked, you may be able to get a lower rate. 

Ocean freight is calculated based on Harmonized Commodity and Coding System (HS). Commodities are assigned an HS code that determines the duty and tax rate paid when imported to the U.S. While weight and value are important, standard-sized shipping containers make handling easier. 

Some shipping lanes also have higher rates than others. Because of these differences, NVOCCs will often base FAK rate calculations on container size, type, and shipping lane

In terms of containers, rates will be the least expensive for the most common size and type, going up from there. 

Containers commonly used for FAK freight include:

  • 20-foot standard height (TEU)
  • 40-foot standard height (FEU)
  • High Cube - available in 20 and 40 foot lengths
  • Refrigerated (Reefer) Containers
  • Tanktainer - cylindrical tank contained in a frame matching TEU dimensions

Different shipping lanes will also affect pricing. For example, if you are shipping a container from Shanghai, China to the U.S., it is likely to cost you double to ship to an east coast port versus a west coast port like Los Angeles/Long Beach. 

Other factors such as distance, season, and any needed safety or security measures may add surcharges to the final price calculation. 

Overseer in a face mask and safety helmet inspecting boxes in a warehouse

What Goods Qualify as FAK Freight?

Most goods can be shipped as FAK freight one way or another. Even perishable goods can be shipped in reefer containers if the company offers the option. 

Different carriers may have more specific regulations to qualify. For instance, they may require all goods to be within a specific weight or density range. If the load is too uneven, pricing may not be fair to one party or another. 

LTL carriers need to be able to pick up other cargo. So if your shipment exceeds a certain capacity, they may recommend an FTL (Full Truckload) service instead. 

Ships need to monitor tonnage to balance containers properly and to know when maximum weight has been reached. Shoreside cranes are used to move containers on and off ships, so how a container is packed also matters. 

Looking for a solution to move truckload freight? R+L Global Logistics handles truckload shipping. Let us know when and we'll handle the rest.

Prohibited Commodities

Some types of cargo can’t get FAK classification regardless of acceptable weight or size. Others may be prohibited because of weight and/or abnormal dimensions. 

Most LTL carriers do not offer FAK services for goods that won’t fit in a standard dry trailer. NVOCCs operate much the same way and go so far as to have special classifications for cargo that isn’t able to fit in stackable containers of any size. 

Characteristics that may prohibit cargo from shipping as FAK freight include:

  • Hazardous Goods classification
  • High-Value Cargo that exceeds insurance liability (typically $500,000 per shipment)
  • Government and military cargo deemed to be high risk or sensitive
  • Specialized materials kept in flexitanks
  • Abnormal or Out of Gauge (OOG) that won’t fit in standard containers or trailers
  • Goods delivered as part of a relief or charity service - due to certain tax laws overseas

This is by no means a definitive list and if you are looking to transport any of the above mentioned items, speak with a freight forwarder with experience in specialized cargo shipping. 

Big rig pulling a trailer down a desert highway; side view

How Can I Get FAK Classification for my Shipments?

Whether or not your merchandise qualifies for FAK rates is up to the carrier you are working with. There is no specific government regulation overseeing FAK classification for cargo in the U.S.

To get FAK classification from your chosen carrier and be eligible for the rate, certain criteria usually need to be met. If you are only looking to get FAK rates from your NVOCC, it will be easier because many ocean carriers have a standard flat rate per container. 

For an LTL carrier, there may be more risk involved because they move shipments one truckload at a time. 

Cargo shipments may have to meet all or some of the following criteria:

  • Specific number of different NMFC coded items
  • Easily stowable or stackable packaging
  • Meet LTL freight charge minimums
  • Come from shippers with high volume at regular intervals

LTL carriers are less likely to grant someone FAK freight rates unless they have an established shipping history with them. Depending on the negotiated FAK rate, the LTL carrier may be operating at a slight loss unless the frequency of the shipments is high.   

Looking for a solution to move truckload freight? R+L Global Logistics handles truckload shipping. Let us know when and we'll handle the rest.

Ship With USA Truckload to Meet your Freight Needs

Whether your shipping needs are domestic or international, USA Truckload, powered by R+L Global Logistics can find you solutions that meet your needs. LTL carrier FAK rates may be the solution you’ve been waiting for. 

For shipping within North America, we offer services for:

Work with USA Truckload and know that your shipments will be taken care of. Our industry experts pride themselves on offering the best customer service in the industry. You and your cargo are our main concern. 

Reach out today for a service quote and get your goods in the hands of the people who need them. 

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