"Hold The Presses!" Dimensional Pricing In The LTL Area Signals Big Changes And Higher Freight Costs!
Aug 10, 2017
Are you prepared for the significant changes occurring in LTL pricing programs? A couple weeks ago, ABF announced a program that could potentially have a significant impact on your freight costs - especially if you have a large number of minimum charge shipments.
ABF will continue to have a contracted rate tariff, which will include a minimum charge. But with the new cubic rule, ABF will perform two calculations to determine how much you will be billed. The first calculation will be based on the agreed tariff. The second calculation will be based on the new cubic program rate. Then ABF will compare these two rates, and ABF will utilize the larger of the two rates. ABF may be one of the first carriers to announce this change in pricing, but we expect other carriers will likely follow suit.
Why are carriers looking at these changes? Simple answer! They want shippers to pay for the space they occupy on ABF trailers.
Why should you be concerned? As more LTL carriers incorporate dimensional pricing in to their LTL pricing platform, the big challenge for shippers will be to make sure they have the information they need to validate the dollar amounts included on their freight bills. For those of you who are thinking "No Problem!" we encourage you to look at your Bills of Lading. Do the B/L's have the dimensions of the freight being loaded on to the trailer? If not, how will you verify dimensional based pricing?
There are ways to control your freight costs in a dimensional pricing environment. Having the right processes and systems in place has never been more important! But you can arm yourself with the information you need to ship intelligently by giving us a call at 630-833-0890 or sending us an email. Our Rapid Assessment can quickly assess your environment and help you put the right processes in place to keep your freight costs down.
Another way to ensure that you're paying the right charges on your freight bills is to have a solid freight audit and payment program in place.
We're on your team, we're here to help and we're passionate about seeing you be successful.