The LTL industry is enjoying a buoyed rate environment even as it continues to manage through new regulatory red tape and fight against relentless cost increases in everything from labor to equipment. Industry experts like LCRP have reported that LTL executives are looking to drive relentless cost increases out of their operations – and they’re telling shippers to prepare for rate increases in the 3 to 5 percent range.
What specific factors are driving up operations costs of the typical LTL carrier? The answer is everything but take some of the following into account:
- New Class 8 tractors costs
- Truck drivers, when carriers can find them, increasingly are getting higher pay
- Insurance costs are up
- Due to environment regulations, the cost of building a terminal has gone up significantly
As the LTL industry addresses skyrocketing cost increases, shippers will incur these cost increases. Despite the state of the LTL industry, many LTL shippers overlook LTL in the procurement process and often consider the carriers providing the services as little more than a generic commodity. Many shippers are still locked in the paradigm, but carriers are moving on – where possible. Carriers have sophisticated pricing models and know their cost to serve each customer. From insurance risk to driver delays to capacity utilization, they’re measuring their customers and evaluating their relationship.
LCRP will help you evaluate your current state and make recommendations on ways to reduce LTL costs. Rather than establishing LTL contract on impersonal RPP’s and discounts off old rate tables, best practices suggest building collaboration around a nucleus of trust. LCRP has the expertise to help you achieve best-in-class LTL discounts while improving the carrier working relationship.
LCRP clients typically save between 5-15% by retaining our services to reduce LTL costs.