LTL Freight: Absolute Minimum Charge

An LTL carrier's Absolute Minimum Charge (sometimes called the "Floor Charge") is the lowest amount the carrier is willing to accept for a shipment. It usually isn't a single figure, but a set of figures that depend on the origin and/or desitination.

If you're running quotes or testing rates on the checkout page of your e-commerce store and the quoted LTL shipping rates aren't changing, one possible reason is that you have yet to exceed the carrier's Absolute Minimum Charge. Assume, for example, that...

• The list price for the shipment is $720.00.
• Your negotiated discount is 70%.
• The carrier's Absolute Minimum Charge is $250.00

The shipment's discounted price, before the Absolute Minimum Charge is applied, is $216.00. Since the amount is below the carrier's Absolute Minimum Charge, the Absolute Minimum Charge will be applied. The price for the shipment will be $250.00.

The Absolute Minimum Charge will continue to be applied, even if additional items are added to the shipment (or Cart in the case of an e-Commerce application), until the discounted price is greater.

To see if the carrier's Absolute Minimum Charge is responsible for a quoted shipping rate that isn't changing, add enough product to the shipment (or Cart in the case of an e-Commerce application) to increase the shipment weight by 100 LBS. Repeat that step until you see the quoted shipping rate change. If you're repeating the test on your e-commerce store, make sure you're not retrieving a cached result. If the quoted shipping rate hasn't changed after adding 500 LBS to the shipment weight, then it probably isn't the Absolute Minimum Charge that is responsible.

Related documents:
Know The Absolute Minimum Charge (Blog post)