First things first, let’s actually define it. F.A.K. stands for Freight All Kinds. But that still leaves one pondering on what it really means or how it can affect you. Who is responsible for giving out an F.A.K.? Let us try to help clarify that for you.
LTL (less than truckload) carriers are the ones who actually assign you an F.A.K. if they so choose to. These are given both to freight brokers like us, and directly to customers as well. The way it works is pretty simple for the most part. Let’s pretend you are a company that ships out a bunch of random things which has freight classes that range anywhere from 70 to class 150. Instead of charging you a different rate at each different class, the carrier can give you an F.A.K. 70 for anything that falls between class 70 and 150. They can give you an F.A.K. 70 if your items fall between class 70 and 100. Then can basically assign it any which way, as long as you both agree on it.
At the end of the day, all that really matters is the price you are paying for your shipment. Some customers think they have it made because they have an F.A.K. 70 from class 70 to class 150. But what they don’t realize is that they might have a lesser discount which in reality it means it can be more expensive than having regular pricing without an F.A.K. The tricky part is knowing how much you should be paying regardless of having an F.A.K. in place or not.
Generally speaking, the way it should work is the more freight you have the bigger your discount should be. But on the flip side, if a specific carrier does not like your type of freight, they might not give you a great discount. Or, maybe they know you have terrible pricing, so they might still give you terrible pricing but make it seem like you are getting a good deal by saving you money. Now as you can imagine, the odds are in your favor of getting better pricing if you work with a freight broker directly because a broker will collectively have more revenue than any one businesses. The freight broker will also have contracts will a significant amount of LTL carriers and not just a handful like one customer would have. The average customer who works with LTL carriers directly might have two to four carriers where as a freight broker will probably have 50+ contracts since they work with hundreds of clients and need many options depending on each lane that the customer is running.
Here is one caveat to working with a freight broker. You must give the broker the actual freight class even if you have an F.A.K. in place. Remember, you are paying the broker to move the freight and not the carrier directly. The broker might have an F.A.K. as well but they need to know the cost based on its actual freight class, very important to remember.
In conclusion, an F.A.K. can be very beneficial to a business, especially if it saving them money. But as you just read, it does not really matter if you have one or not, all that matters is that you are paying a competitive rate. Not only does Freeman Logistics have competitive rates, we have top not service to go with it. Do not hesitate to reach out as we would love to hear from you!