Freight-all-kinds rate

Freight-all-kinds (FAK) rate defined: what it covers, why it drifts from contract terms, and how to check it against a carrier invoice. Read the full guide.

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Freight-all-kinds rate

A freight-all-kinds rate, usually written FAK, is a single per-shipment rate a carrier applies regardless of the commodity being moved, replacing the class-based pricing that would otherwise apply under the National Motor Freight Classification. Shippers negotiate FAK rates to get pricing certainty across mixed freight. That certainty is only real if the invoice actually applies the negotiated FAK terms, and the schedule they were meant to replace, on every shipment.

1. What is a freight-all-kinds rate?

A freight-all-kinds rate is a single negotiated rate, or a flat discount off a base rate, that a carrier applies to a shipment regardless of the commodity's National Motor Freight Classification. It replaces class-based pricing for a defined scope of freight, so a shipper moving varied product mixes can plan cost per shipment without pricing every commodity separately. The rate is set in the contract's rate schedule and is only valid within the scope that schedule defines.

The alternative to an FAK rate is class rating, where each commodity carries a freight class from 50 to 500 based on density, stowability, handling, and liability, and price follows that class. FAK trades that granularity for a flat number.

That trade only holds if the invoice applies the flat number correctly. The negotiated FAK number is a contractual commitment, not a suggestion the carrier's billing system is free to override.

2. Why does an FAK rate create margin drift risk?

Margin drift is the gap between what a vendor contract says and what the invoice actually charges, and an FAK rate is exposed to it because carrier billing systems default to class-based rating unless the FAK exception is correctly configured for that shipment. If a commodity code, weight tier, or lane falls just outside the negotiated FAK scope, the system rates it at the standard class instead, and the invoice shows a higher charge than the contract allows.

The failure is not fraud. It is a default. Carrier rating engines are built around classification, and FAK is the exception layered on top.

Every shipment that does not match the FAK's defined scope exactly reverts to that default unless someone catches it. A contract that reads clean can still leak through this gap between negotiated terms and what the rating engine actually does at billing time.

3. Which shipment details determine whether an FAK rate applies?

An FAK rate's scope is defined by specific, contractually stated conditions, not by the commodity alone. A shipment must match the covered commodity group, the named lane or zone, the weight break the rate assumes, and any accessorial exclusions written into the schedule. Missing any one of those conditions moves the shipment out of FAK scope and back to standard classification, even though nothing about the shipment looks unusual to the person reviewing the invoice.

Three conditions typically govern scope: the commodity group named in the contract, the weight break the rate assumes, and the lane or accessorial terms attached to it. A mismatch on any one changes what should legitimately be billed, independent of the others.

  • Commodity scope: The contract names which commodity groups the FAK rate covers. Anything outside that named group reverts to class-based pricing.
  • Weight break: FAK rates are usually tied to a minimum or range of billed weight, and shipments below it can be rated differently.
  • Lane and accessorials: The lane covered and the accessorials included or excluded are both set separately from the base FAK number.

4. How do you check an FAK rate against a freight invoice?

Checking an FAK rate means matching each invoice line against the FAK schedule's exact scope, not against a memory of the negotiated number. Confirm the commodity billed matches a covered group, the weight break applies, the lane matches, and no excluded accessorial changed the rating basis. Where the carrier reverted to class-based pricing, the invoice will show a class code instead of the FAK reference, which is the clearest signal the exception did not apply.

This is line-by-line matching against the rate card, not a spot check of the total invoice amount. A rate schedule is a written document; the invoice either follows it or it does not.

This is the same matching discipline covered in a full freight and 3PL audit, applied here to one specific rate mechanism within a broader vendor category.

For the wider pattern this sits inside, start with the margin drift guide.

5. Frequently Asked Questions (People Also Ask)

Is an FAK rate the same as a flat rate?

No. A flat rate applies one number to every shipment with no conditions. An FAK rate applies one number only within a defined commodity, weight, and lane scope; outside that scope, standard class-based pricing can still apply.

Why would a carrier revert to class-based pricing on an FAK contract?

Carrier billing systems rate freight by classification as their default. An FAK rate is an exception configured on top of that default, and a shipment that falls outside the FAK's defined scope reverts to the underlying class-based rate automatically.

Does an FAK rate cover accessorial charges?

Only if the contract says so. Accessorials like liftgate, residential delivery, or detention are typically priced and billed separately from the FAK base rate unless the schedule explicitly bundles them.

How is an FAK rate different from a volume tier?

An FAK rate removes commodity classification from pricing. A volume tier changes the rate based on shipment quantity or spend level. A single contract can carry both, and each needs to be checked against the invoice separately. See volume tier for how that mechanism works.

What does it look like on an invoice when an FAK rate was not applied?

The clearest sign is a freight class code appearing on a line where the contract specifies an FAK reference instead. A higher-than-expected charge on an otherwise normal shipment is the second signal worth checking against the rate schedule.

Can an FAK rate still result in overbilling even when applied correctly?

Yes. An FAK rate only fixes the base rating method. Accessorial charge creep, minimum charge floors, and fuel surcharge calculations sit outside the FAK mechanism and need to be checked independently against the same contract.

1. What is a freight-all-kinds rate?

A freight-all-kinds rate is a single negotiated rate, or a flat discount off a base rate, that a carrier applies to a shipment regardless of the commodity's National Motor Freight Classification. It replaces class-based pricing for a defined scope of freight, so a shipper moving varied product mixes can plan cost per shipment without pricing every commodity separately. The rate is set in the contract's rate schedule and is only valid within the scope that schedule defines. The alternative to an FAK rate is class rating, where each commodity carries a freight class from 50 to 500 based on density, stowability, handling, and liability, and price follows that class. FAK trades that granularity for a flat number. That trade only holds if the invoice applies the flat number correctly. The negotiated FAK number is a contractual commitment, not a suggestion the carrier's billing system is free to override.

2. Why does an FAK rate create margin drift risk?

Margin drift is the gap between what a vendor contract says and what the invoice actually charges, and an FAK rate is exposed to it because carrier billing systems default to class-based rating unless the FAK exception is correctly configured for that shipment. If a commodity code, weight tier, or lane falls just outside the negotiated FAK scope, the system rates it at the standard class instead, and the invoice shows a higher charge than the contract allows. The failure is not fraud. It is a default. Carrier rating engines are built around classification, and FAK is the exception layered on top. Every shipment that does not match the FAK's defined scope exactly reverts to that default unless someone catches it. A contract that reads clean can still leak through this gap between negotiated terms and what the rating engine actually does at billing time.

3. Which shipment details determine whether an FAK rate applies?

An FAK rate's scope is defined by specific, contractually stated conditions, not by the commodity alone. A shipment must match the covered commodity group, the named lane or zone, the weight break the rate assumes, and any accessorial exclusions written into the schedule. Missing any one of those conditions moves the shipment out of FAK scope and back to standard classification, even though nothing about the shipment looks unusual to the person reviewing the invoice. Three conditions typically govern scope: the commodity group named in the contract, the weight break the rate assumes, and the lane or accessorial terms attached to it. A mismatch on any one changes what should legitimately be billed, independent of the others. - Commodity scope: The contract names which commodity groups the FAK rate covers. Anything outside that named group reverts to class-based pricing. - Weight break: FAK rates are usually tied to a minimum or range of billed weight, and shipments below it can be rated differently. - Lane and accessorials: The lane covered and the accessorials included or excluded are both set separately from the base FAK number.

4. How do you check an FAK rate against a freight invoice?

Checking an FAK rate means matching each invoice line against the FAK schedule's exact scope, not against a memory of the negotiated number. Confirm the commodity billed matches a covered group, the weight break applies, the lane matches, and no excluded accessorial changed the rating basis. Where the carrier reverted to class-based pricing, the invoice will show a class code instead of the FAK reference, which is the clearest signal the exception did not apply. This is line-by-line matching against the rate card, not a spot check of the total invoice amount. A [rate schedule](/glossary/rate-card) is a written document; the invoice either follows it or it does not. This is the same matching discipline covered in a [full freight and 3PL audit](/glossary/freight-and-3pl-audit), applied here to one specific rate mechanism within a broader vendor category. For the wider pattern this sits inside, start with the [margin drift](/insights/margin-drift-spend-leakage-guide) guide.

Questions & Answers

Is an FAK rate the same as a flat rate?

No. A flat rate applies one number to every shipment with no conditions. An FAK rate applies one number only within a defined commodity, weight, and lane scope; outside that scope, standard class-based pricing can still apply.

Why would a carrier revert to class-based pricing on an FAK contract?

Carrier billing systems rate freight by classification as their default. An FAK rate is an exception configured on top of that default, and a shipment that falls outside the FAK's defined scope reverts to the underlying class-based rate automatically.

Does an FAK rate cover accessorial charges?

Only if the contract says so. Accessorials like liftgate, residential delivery, or detention are typically priced and billed separately from the FAK base rate unless the schedule explicitly bundles them.

How is an FAK rate different from a volume tier?

An FAK rate removes commodity classification from pricing. A volume tier changes the rate based on shipment quantity or spend level. A single contract can carry both, and each needs to be checked against the invoice separately. See volume tier for how that mechanism works.

What does it look like on an invoice when an FAK rate was not applied?

The clearest sign is a freight class code appearing on a line where the contract specifies an FAK reference instead. A higher-than-expected charge on an otherwise normal shipment is the second signal worth checking against the rate schedule.

Margin Drift Resources