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November 22, 2022

Another LTL Carrier Moves Toward Dimensional Pricing

Marc Wojnowich, Vice President of Sales

Marc Wojnowich, Vice President of Sales

“The ceiling is the roof!” ~ Michael Jordan
“Space and Pace…” I like the sound of that. It perfectly describes what LTL shippers think they pay for when booking a load. The space on the truck and the time it takes to deliver.

For decades now, carriers and shippers have been incapable of weening away from the grueling and confusing depths of the NMFC system. One in which shippers imagine a team of freight savants in a room, grappling over whether a refrigerator is more susceptible to damage than a lawn mower or if handling a tub of goo on a pallet is easier than a drum of said goo.

Not long ago, ABF, a National LTL carrier, began requiring the inclusion of dimensions in the rate requests. Another National LTL carrier, and the largest, FedEx Freight, is entering the fray. ‘Space and pace’ pricing may be an LTL game-changer for FedEx.

I’ll get back to “Space,” but let’s get the “Pace” out of the way. If I had to guess, the shipper wouldn’t necessarily be able to choose their desired Pace specifically. I think FedEx Freight is simply continuing their Economy vs. Priority differentiation, where Priority could give you anywhere from a day to 3 or 4 days of quicker transit.

Ok, back to “Space . . .” So far, dimensional pricing has sounded sensible to shippers and carriers alike, so what’s the hold-up? 

Shipper Perspective

  1. How is this going to change my day-to-day?
  2. What’s it going to cost me?   

Well, you gotta capture DIMS on EVERY pallet of every shipment. The NMFC has been changing so many commodities to density-based classifications that you should already be doing this. If you’re not, you require the carrier to be more conservative on your pricing, and you have no leg to stand on in a dispute over re-classifications or capacity rules.

Reconex has been advising clients to do so for years, leading to “What’s it going to cost me?”

To project what it will cost you, you must have quality data to analyze the impact. And this is why Reconex has been so adamant about capturing dims on every load.

Step 2 is using that data to analyze the impact of the change. This could be a big win for you. It could simplify routing and save you money. Or, it could be just the opposite. You need the data AND the ability to analyze it to determine the true impact.

And so on goes the conversation among freight gurus . . . “When are we going full DIM-based pricing?” Slowly we’ll get there. But for now, prepare yourself! Start capturing the data. And if you don’t have the tools to do so, I have a suggestion . . . Reconex. 

Happy Thanksgiving, all!

Ditch & Switch

Still using a 10-year-old transportation management system like Leonard?
Ditch and switch to Reconex. 

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