Label Manufacturer Navigates NMFC Freight Reclassification to Boost Profitability

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Member Profile

This PA member is the largest privately owned label converter in the U.S. They specialize in manufacturing a comprehensive range of thermal labels, including direct thermal labels, thermal transfer labels and ribbons, barcode labels, custom-printed consumer packaged goods (CPG) labels, and anti-theft tags. With modern manufacturing and distribution centers, including additional locations in Missouri and Kansas, the company serves high-volume labeling requirements across diverse industries such as shipping & logistics, warehousing, health and beauty, grocery, food and beverage, and retail markets, consistently delivering high-quality products at competitive prices.

With an average annual LTL spend of approximately $3.5 million through Procure Analytics, efficient and cost-effective freight management is critical to their operations.

Freight Spend Challenges

The member faced a significant hurdle with the impending reclassification of the LTL class system by the National Motor Freight Classification (NMFC). This shift, moving towards a more density-based billing system similar to European models, threatened to drastically increase their freight costs.

Without proactive measures, the member was looking at a potential $1.8 million—or 51%—increase in their annual LTL spend. This presented not only a substantial financial risk but also a complex operational challenge, requiring a strategic response to mitigate the impact.

How PA Helped

Procure Analytics immediately partnered with Fitzmark, our trusted 3PL freight solution supplier, to proactively address the looming NMFC changes. Our joint strategy focused on two key areas:

Securing FAK Agreements and Optimizing Carrier Mix: We engaged in direct negotiations with the label manufacturer’s current carriers to secure Fixed Average Class (FAK) agreements. Leveraging Procure Analytics’ market influence and strategic carrier mix optimization, we successfully eliminated over 66% of the potential $1.8 million increase even before the new NMFC system officially took effect on July 19, 2025. This limited the initial impact on the member’s LTL spend to just 18%.
Empowering Sales with Updated Tools: To completely neutralize the remaining impact and even turn it into an opportunity, we collaborated closely with the member. We helped them update their sales team’s order entry and freight estimating tool. This crucial update allowed the member to accurately factor in the adjusted freight costs into all new quotes.

Results

Through our proactive intervention and strategic partnership with Fitzmark, Procure Analytics helped the member not only avoid a massive $1.8 million increase in LTL spend but also transform a potential challenge into a financial advantage.

By incorporating the adjusted freight costs into new quotes, the label manufacturer is actually making more money on every shipment, demonstrating how strategic procurement can directly impact profitability.