Con-way Freight offers new LTL pricing cap
New service caps LTL rates below truckload rates in all lanes
By Dave Hannon -- Purchasing, 6/15/2009 4:08:00 PM
Less-than-truckload shippers that are frustrated by rates that escalate beyond what they would typically pay for a truckload shipment in the same lane now have an option.
Con-Way Freight this week released its True LTL Pricing service, which caps the carrier’s LTL rates in every lane below what a truckload shipment in that lane would cost.
Sean Devine, vice president of pricing and engineering, tells Purchasing.com that Con-way Freight has benchmarked truckload rates between all major points in the U.S. and guarantees that “our LTL pricing was always less than typical truckload rates in that late, whatever the class or characteristics of the freight are.”
Devine says for larger shipments, typically between 5,000 and 20,000 lbs, there are many lanes that, depending on the shipper’s agreement and freight characteristics, the truckload rate for that lane may be lower than the LTL rate. In which case, shippers are more likely to use the truckload service, even if it’s not a true truckload shipment.
“That’s terribly wasteful for both shipper and carrier which is why we designed the True LTL pricing,” Devine says. “I think most of the LTL industry has heard that feedback from customers for years. We’re in the business to eliminate transportation waste for our customers.”
Con-Way used various third party data sources to benchmark truckload rates and combined it with internal data and used that data to decide where to cap the LTL rates.
Devine says the caps also make the LTL pricing more predictable. Often, when LTL shipments get large, there tend to be more accessorial charges or alternative pricing that push the pricing up and cause shippers to shy away from LTL when shipments get larger.
“And as a result most shipments that move in our LTL network are much smaller than you might think,” Devine says. In some cases, the larger shipments may be sent to a broker or held until they are large enough for truckload, delaying the shipment.
“We’re basically applying common sense to a common problem,” he says. “People should always pay LTL rates for LTL shipments.”
Devine said the new service offering is aimed at all LTL shippers, but will especially impact shippers that tend to have heavier LTL shipments. “There are no special requirements or negotiation required to get this service,” he said.
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Funny, do they think this is new? CH Robinson has been doing this for over 30 years.
Dave - 6/17/2009 6:25:00 PM EDT
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