National Motor Freight Traffic Association (NMFTA)

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DEFINITION of 'National Motor Freight Traffic Association (NMFTA)'

A nonprofit organization representing interstate, intrastate, and international motor carriers. Since 1956, the National Motor Freight Traffic Association (NMFTA) has represented the interests of the motor carrier industry, specifically less-than-truckload (LTL) carriers. These standards are used in contract negotiations, and help parties shipping goods understand how they should be transported. The NMFTA is headquartered in Alexandria, Virginia, and helps set industry standards in commodity packaging and transport.

INVESTOPEDIA EXPLAINS 'National Motor Freight Traffic Association (NMFTA)'

NMFTA publishes the National Motor Freight Classification (NMFC), which provides a comparison of commodities that are shipped. Commodities are classified on scale and are grouped into one of eighteen classes, with classifications evaluated on the density, handling, stowabilitiy, and liability associated with a particular commodity. The classification provides transportation companies with a guideline in which to negotiate transportation contracts. The guidelines also provide minimum packaging requirements.

Any transportation company that references the NMFC in its contracts or rates is required to participate in the NMFC. Participation requires the payment of an annual fee and the completion of a licensing agreement.

Since the 1960s, the NMFTA has created and managed a unique set of identifiers for transportation companies, called the Standard Alpha Carrier Code (SCAC), which assigns two to four letter codes to each shipping company. The standard has been recognized by the American National Standards Institute (ANSI), the United Nations EDIFACT system, and the Surface Transportation Board (STB).

NMFTA also assigns a unique code to major geographic locations in North America that are involved with shipping and receiving goods, called the Standard Point Location Code (SPLC).  The classification is similar to the codes assigned to airports so that destinations can be easily identified. Each identifier is nine digits long, and identifies the region; state, province, or territory; county; and area within the county.

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