Pallet rates can be a very cost-effective alternative to regular LTL rates. Most programs provide a flat fee per pallet and are usually subject to weight or pallet size restrictions.
For instance, the shipper may be required to load pallets with no more than 2,500 pounds of product or use pallets no larger than 48” by 48” in order to qualify for pallet rates. Often, pallet rates may only apply to either inbound or outbound shipments. The majority of carriers will only offer pallet rates for direct movements.
There are definite advantages to negotiating pallet rates for a company who regularly ships palletized loads. If a shipper does not palletize their loads but often ships heavy products, it may be worth their while to begin palletizing loads in order to receive pallet rates. It is also to the carrier’s advantage when shipments are palletized. Product shipped on pallets is much easier and quicker to load and unload.
Some carriers offer pallet rates in their public rules tariffs, but often shippers will have to proactively negotiate this type of rate with carriers. The shipper may be required to specifically request application of pallet rates by indicating on the bill of lading a phrase such as “pallet rates” or the appropriate pricing agreement number.
With all of the different rules and requirements involved in the application of pallet rates, it can be difficult to ascertain whether or not a pallet rate applies in any given situation.
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