In April, less than truckload (LTL) freight carriers announced 4-6% general rate increases for non-contract shipments. General rate increases are typically announced anywhere from late May to early July. The April announcement came much earlier than usual. What does this mean to shippers and why did this occur? GRI, or general rate increase, is the average amount by which carriers’ tariff rates increase applied to base rates. It is extremely difficult for an individual shipper to calculate how this rate increase will impact their bottom line. The percentage increase will vary based on shipping region, weight breaks, zip codes and freight classes. Working with a logistics broker can help shippers understand the rate increase and even help keep their costs down.
As truckload capacity continues to be constrained this causes an influx of shippers desperate to move their larger shipments via LTL spot volume shipments rather than via truckload. This further inhibits the LTL carrier network capacity and causes LTL carriers to increase their spot rates or even refuse certain larger size shipments. LTL networks are not built to handle the large volumes of these types of moves.
Partnering with a third party logistics company, like PLS Logistics, can help shippers mitigate and manage costs. 3PLs keep negotiated rates locked in. They force the carriers to compete against each other for the business and often use their muscle with the carriers to eliminate GRI.
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