This April, most major trucking companies will be implementing their General Rate Increase on all freight rates. On March 26th, Old Dominion Freight Lines and UPS Freight took a 5.1% and a 5.9% increase respectively. Fed Ex Freight’s took their increase on April 2nd. You can be sure that by the end of April every major trucking company will have increased shippers rates by at least 5%.
And one thing that the LTL carriers do not highlight is that this rate increase is a weighted average. What that means that your increase varies depending on weight break and shipping lane. So you may be located in a place where the carrier is actually implementing a 12% increase. And shipments under 500lbs usually take a huge increase, generally 10-12%.
HOW TO AVOID SUCH AN INCREASE? Good question, I am glad you asked. Once it is implemented, your pretty much stuck with it. However, you can be proactive and when you negotiate your freight negotiate your initial deal and then ask for the rates to be locked in for two years. Or there are reputable 3PL's out there who already protect their customers from such increases.
And one thing that the LTL carriers do not highlight is that this rate increase is a weighted average. What that means that your increase varies depending on weight break and shipping lane. So you may be located in a place where the carrier is actually implementing a 12% increase. And shipments under 500lbs usually take a huge increase, generally 10-12%.
HOW TO AVOID SUCH AN INCREASE? Good question, I am glad you asked. Once it is implemented, your pretty much stuck with it. However, you can be proactive and when you negotiate your freight negotiate your initial deal and then ask for the rates to be locked in for two years. Or there are reputable 3PL's out there who already protect their customers from such increases.
No comments:
Post a Comment