U.S.-based less-than-truckload (LTL) carriers continue to announce their annual LTL general rate increases – or GRIs – earlier than in previous years. GRIs, which tend to be in the 4-6% range every year, are intended to offset carriers’ rising costs for new equipment, real estate, technology, and employee wages. Unfortunately, GRIs typically have the greatest impact on small- and medium-sized shippers who are not under contract with the carriers. The majority of LTL freight shipments that move under large-shipper contracts are usually not affected by general rate increases.
So far, here are the LTL carriers that have announced fall rate hikes:
- ABF Freight – 5.2% effective 8/29/16
- YRC Freight – 4.9% effective 9/5/16
- UPS Freight – 4.9% effective 9/19/16
- Old Dominion – 4.9% effective 9/26/16
- Roadrunner – 4.9% effective 9/26/16
- XPO Logistics (Con-way) – 4.9% effective 9/26/16
- Estes Express – 4.9% effective 10/17/16
- FedEx Freight – 4.9% effective 1/2/17
Most of the other LTL carriers implement similar GRIs without publicly announcing them. With the majority of LTL business moving among the top 25 carriers, pricing discipline in the industry remains strong despite sluggishness in the overall economy.
So how can small- and medium-sized shippers insulate themselves from these significant increases?
One sure-fire method is to work with a third-party logistics company that has pre-negotiated contracts with all of the carriers that fall outside the scope of their standard GRIs. At Logistics Plus, we have agreements in place with almost all of the major LTL carriers that operate outside the influence of their standard, annual rate hikes. We do review these contracts periodically and, when warranted, allow our LTL carrier partners to increase rates slightly to offset their increases in costs. However, such increases are almost always well below the GRIs imposed on the broader shipping community.
So if you’re looking to mitigate annual LTL carrier GRIs and create greater pricing predictability for your freight transportation spend, click the button below to get started with Logistics Plus. Let us worry about LTL carrier rates and negotiations so that you can focus on growing your business.
