The change in Less Than Truckload (LTL) pricing from CzarLite to density-based rating marks a significant shift in how shipping costs are calculated in the LTL industry. Below is a clear explanation of this transition:

What is CzarLite?

CzarLite is a standardized, neutral base rate developed by SMC³, widely used in North America for LTL pricing agreements. It provides a consistent benchmark that shippers and third-party logistics providers (3PLs) rely on to evaluate and negotiate shipping rates. Traditionally, CzarLite has been tied to a fixed-rate or classification-based system, offering predictability in pricing.

What is Density-Based Rating? 

Density-based rating, on the other hand, is a more dynamic pricing model that calculates shipping costs based on the density of the freight. Density is determined by dividing the shipment’s weight by its volume (typically using weight and dimensions). This approach contrasts with the static base rates of CzarLite, as it adjusts pricing according to how much space a shipment occupies relative to its weight.

The LTL Pricing Change Explained 

The expected change involves moving away from the fixed base rate system of CzarLite to a pricing structure where density becomes the primary factor. Here’s what this means:

  • Old System (CzarLite): Pricing was largely based on a standardized rate, often linked to the National Motor Freight Classification (NMFC) system, which categorized freight into classes without fully accounting for its density.
  • New System (Density-Based): Pricing will vary depending on the shipment’s density. Denser shipments (heavier items in less space) will cost less to ship, while less dense shipments (lighter items taking up more space) will cost more.

This shift is part of a broader industry trend toward more accurate and efficient pricing, reflecting the true cost of transporting goods. Denser freight is generally easier and more cost-effective to handle and transport, so the new model rewards efficiency.

Why the Change in LTL Pricing? 

The transition is being driven by the 2025 overhaul of the National Motor Freight Code (NMFC), which will prioritize density as a key determinant in LTL pricing. This update aims to:

  • Align shipping costs more closely with operational realities.
  • Encourage shippers to optimize packaging and freight density.
  • Improve fairness and precision in pricing across the industry.

Practical Impact for LTL Pricing

  • Cheaper for Dense Freight: Shipments with high weight-to-volume ratios (e.g., machinery) will see reduced rates.
  • More Expensive for Less Dense Freight: Bulky, lightweight shipments (e.g., pillows) will face higher costs.
  • Tools Supporting the Shift: Solutions like SMC³’s CzarLite XL already allow shippers to calculate rates using either traditional classification or density-based methods, easing the transition.

This change reflects an industry-wide push toward modernized pricing models. By moving to density-based rating, LTL shipping aims to become more transparent and cost-efficient, with the NMFC overhaul serving as a major catalyst for this evolution.

The shift from CzarLite to density-based rating replaces a fixed-rate approach with a flexible, density-driven model, making LTL pricing more reflective of actual shipping costs and operational efficiency. This change, set to take full effect with the 2025 NMFC updates, will reshape how shippers plan and budget for LTL transportation.

Looking Ahead with TOP Worldwide

Big changes like this can feel overwhelming, but that’s where we come in. At TOP Worldwide, we keep a close eye on industry shifts so you don’t have to. Whether you’re trying to figure out how density-based pricing will affect your freight costs or just want help navigating the transition, our team is here to guide you. Let’s make sure your shipping strategy is ready for what’s next. Reach out to us today and let’s talk about how we can help.

 Jeff Berlin

is the Chief Operating Officer of E.L. Hollingsworth & Co. and serves as the Senior Operations Executive for TOP Worldwide and Native American Logistics. With over 30 years of experience leading logistics and trucking companies, he brings deep industry expertise to his role. Jeff is also a CDL-A driver and a private pilot. Contact Jeff at jberlin@elhc.net.