Where Is FAK Applied? Practical Places and Documents Explained

Where does FAK get used?

Freight All Kinds (FAK) is a pricing construct that appears across many physical and administrative points in the transportation network. Knowing where FAK applies helps beginners understand both the operational touchpoints and the contractual places where FAK must be recognized.

1. Where in the physical supply chain

• LTL carrier networks—FAK is commonly applied on palletized less-than-truckload shipments that include a mix of SKUs. Carriers and shippers use FAK to simplify billing for multi-sku pallets moving through LTL terminals.
• Containerized ocean and intermodal freight—Forwarders and carriers sometimes apply FAK tariffs for containers filled with general cargo that fits standard stowage profiles. FAK makes sense when the cargo is non-hazardous, non-perishable, and readily stowable.
• Consolidation hubs and 3PL facilities—Consolidators that combine small shipments into larger moves often rely on FAK arrangements with carriers to reduce complexity for their clients.
• Cross-dock and distribution centers—Distribution centers receiving a variety of inbound product lines see simplified invoicing and fewer classification disputes when suppliers use FAK.

2. Where in documentation and systems

• Rate confirmations and contracts—FAK must be explicitly documented in commercial agreements and rate confirmations so both sides understand the scope and limitations.
• Bills of lading and shipping instructions—While BOLs typically list commodity descriptions, an FAK arrangement may be referenced in the BOL or in tariff language that both parties accept.
• Tariffs and published rates—Some carriers publish FAK tariffs or include FAK provisions in their rate manuals; others use confidential contract rates between parties.
• TMS, WMS and ERP systems—Operational systems where rates and freight class are stored must be configured to recognize FAK so accounting and freight payment processes apply the correct charge automatically.

3. Where in contractual relationships

• Long-term carrier contracts—Shippers with steady volume may negotiate FAK as part of annual or multi-year contracts.
• Service-level agreements with 3PLs—FAK is often part of a 3PL’s service offering, enabling simpler invoicing across client accounts.
• Brokered transactions—Freight brokers use FAK when quoting customers for consolidated or mixed commodity movements to speed sales cycles.

4. Where FAK is usually not applicable

• Hazardous materials facilities and specialized carriers for DG (dangerous goods).
• Cold chain warehouses and refrigerated transport providers for perishable goods.
• Oversize/overweight freight yards and heavy haul operations where special equipment and routing are required.

Practical examples

• An e-commerce aggregator creates an FAK arrangement with an LTL carrier so multiple sellers’ mixed pallets move under one simple tariff; the agreement is recorded in the aggregator’s TMS and referenced on each bill of lading.
• A manufacturer’s annual transport contract with a domestic carrier lists an FAK for standard packaged goods and expressly excludes hazardous products and machinery parts that require special handling.
• A freight forwarder books ocean containers under an FAK tariff for general cargo; the FAK clause appears in the rate confirmation sent to each shipper.

Operational considerations

• Make sure your TMS and rate tables are configured to apply FAK correctly and to flag excluded commodities automatically.
• Document FAK terms in both commercial contracts and operational job packets so terminal staff and drivers know when FAK applies.
• Keep clear records of any reclassifications—if a carrier determines a shipment falls outside FAK, an auditable trail minimizes billing disputes.

Summary

FAK is applied across both physical locations (LTL terminals, containers, DCs) and administrative touchpoints (contracts, BOLs, TMS). It works well in settings where mixed, non-specialized cargo moves frequently, but should be excluded from specialized handling environments. Proper documentation and system configuration ensure FAK works smoothly wherever it is used.