February 29 2024 | 7 Min Read

Situation Files #10: The freight classification conundrum solved

Posted By
Wendy Mackenzie
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Situation Files #10: The freight classification conundrum solved

How we helped a client get their supply chain from struggling to thriving in 3 months

The first 90 days - Some situations happen in a flash. Others play out in slow motion. Your supply chain is no exception. Here’s how we helped one client transform in 90 days.

How we solved a client’s misclassification problem saved thousands in past and future expenses. 

In the intricate tapestry of logistics, where every thread intertwines with precision, a snag can unravel the most meticulously planned operations.

This situation file delves deep into one such snag—a freight classification dispute that threatened more than just additional fees. It was a test of resilience, strategy, and the enduring partnership between IL2000 and a client navigating the labyrinth of logistics regulations and the nightmare that can be classifying freight.

And this isn’t a snapshot of a day or week, but rather, it’s a saga of trust and planning to ensure proper freight classification.

The upshot

  • Using data to audit and understand all instances of freight reclassification.
  • Using factual data and shipment specs to acknowledge that reclassification was inappropriate.
  • Building a plan to avoid overpaying on past invoices and future misclassification issues, too.

The sitch

Our narrative unfolds with a client, a luminary in their industry, trapped in a predicament that strikes fear into the heart of even the most seasoned logistics professionals: a reclassification of freight that promised to escalate costs and complicate their logistics strategy. This wasn't a mere bump in the road; it was a potential derailment of their supply chain.

The issue at hand was intricate, stemming from a reclassification by the carrier that seemed at odds with the nature of the goods shipped. The shipment specs and evidence showed precise dimensions, which meant the first classification was correct. Now, such disputes are not uncommon in logistics, yet each carries its unique blend of challenges, particularly when it comes to navigating the dense forest of National Motor Freight Traffic Association (NMFTA) regulations.

The shipments were bulky for this client, leading to misclassification as oversized or a false belief that dimensions had exceeded the shipment specs. With a significant portion of their operations hinging on the efficient and cost-effective movement of goods, the stakes couldn't have been higher.

But the accessorial fees came just the same, and rather than waiting for the problem to fester, IL2000 sprang into action. We were the client's champion, armed with expertise and an unwavering commitment to turn the tide in their favor. 

What was going wrong

  • Misalignment with freight guidelines - The discrepancy between the client's classification and the carrier's reclassification pointed to a critical misunderstanding or misapplication of the NMFTA's guidelines, introducing uncertainty and potential financial strain.
  • Operational inefficiencies - The reclassification brought to light inefficiencies but also a gap in knowledge that impacted operations and affected core business processes. 
  • Communication breakdowns - Essential information and updates were getting lost in the shuffle, complicating efforts to resolve the dispute quickly, efficiently, and within the carrier’s dispute window. 

These challenges laid bare the complexities of managing freight logistics and underscored the need for a nuanced, experienced approach to navigate and mitigate such disputes.

The solve

Our response to this challenge was multifaceted, a blend of strategic foresight, deep regulatory knowledge, and a relentless pursuit of justice on behalf of our client. 

The first step was thoroughly analyzing the disputed classification, dissecting the carrier's rationale and benchmarking it against the NMFTA guidelines. This was no cursory glance; it was a deep dive into the trivial pursuit-like details that govern freight logistics.

After reviewing the facts, we knew that the client’s specs were accurate, and we also recognized that filing a dispute with the carrier would likely lead to additional problems. Instead, we engaged directly with the NMFTA to obtain a final ruling on the shipments in question, a move that underscored our proactive stance and our readiness to defend our client's position at the highest levels. 

Simultaneously, we implemented a tactical hold on carrier invoices. Such an action is atypical for most disputes but more readily available to IL2000 than it would have been to an individual client going it alone. 

The resolution was a triumph for the immediate financial reprieve and the precedent it set. IL2000 successfully overturned the reclassification, realigning the shipping costs with the client's original projections and, more importantly, preserving the operational integrity of their supply chain.

What went right?

  • The NMFTA ruling went in our and our client’s favor. 
  • Invoices were retroactively adjusted and paid. 
  • The client realized savings without disrupting their current operations.

The take home

This situation file is more than a recounting of a dispute resolved; it's a testament to IL2000's ethos of partnership, expertise, and advocacy. And it’s not for the faint of heart. This one instance took many months to resolve, and most shippers would have just given up to simply maintain the peace. 

It's not about maintaining the peace. When you're correct, it's about fighting against an unjust system and process. IL2000 recognized that and rounded up our posse of tools, tech, and wits. We knew we could have a meaningful impact on our client’s transportation spend. 

So the take-home is quite simple: we ride together, and you can trust us. We’re allies even when most would simply bow down. But we…we’re going to take the path less traveled because sometimes, that path leads directly to a growing partnership based on shared experiences. And that is how you handle a freight class dispute the IL2000 way.

Speak with a consulting engagement executive to learn more now.

Topics: Logistics Management, Pricing, On-Time Delivery

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