Securing a rate quote for your LTL shipment can be tedious. There are a lot of individual factors, and it’s not uncommon to let a few of them slip through the cracks while preparing your shipment. The problem is, each individual aspect influences the bottom line.
After rising for years, the turnover rate among drivers began declining in Q1 of 2017. The decline is largely due to a choppy market, but another contributing factor is the overall shortage of drivers. Carriers struggling to fill positions are offering better compensation. That’s a good thing for drivers, but it means rates are increasing for shippers. You’ll want to optimize your shipment in every way possible to keep your rate low.
Factors that affect LTL Freight Quotes and some tips for keeping them low
- Base Rate- The initial charge in an LTL freight quote is the carrier’s base rate. Each carrier has their own base rate, and these change based on the carrier’s need for business and available resources.
- Absolute Minimum Charge (AMC) - The AMC is the lowest a carrier will go in terms of total rate quotes. Even if all of your charges add up to less than a carrier’s AMC, they’ll ask you for this number. Keep this in mind when scheduling your shipments.
- Accessorial Charges -These charges are somewhat miscellaneous charges added on to shipments for a variety of reasons. Fuel charges are considered accessorial, as is residential pickup, HazMat, limited access, and much more. Just about anything that goes beyond normal pickup and delivery can be made into an accessorial charge.
- Weight/Density - Let’s get the most obvious ones out of the way first. You’ll pay more total for heavier shipments, but the more a shipment weighs, the less you’ll pay for every 100 lbs. There are several class ratings to keep track of. To determine the density of a shipment, divide the weight by the cubic feet.
- Freight Class - There are 18 different freight classes, and they’re a huge part of determining LTL freight quotes. They’re determined by a combination of the factors: density, weight, size, value, stow-ability, liability, and ease of handling. The lower the freight class the lower the rate.
- Distance - Yes, longer distances means a higher rate quote, but it can be even more expensive if your carrier needs to interline with another. Many carriers only service a specific zip codes, so if your shipment has to continue beyond their area, they’ll hand it off to a second carrier. That can mean a change in rate due to discounts and minimum charges.
- Freight All Kinds -Also known as FAK, Freight all kinds can be negotiated with carriers to consolidate freight classes, and it’s one of the best ways to save money on your LTL freight quote. If you’re shipping products with different classes at the same time, you can negotiate to have them all shipped at the same class based on average.
Negotiate Like a Pro
The more often you work with certain carriers, and the higher the volume you ship through them, the more likely they are to give you a discount. Be a low maintenance, high transaction customer and carriers will go out of their way to secure your future business.
But that’s not the only way to increase your productivity and ensure strong margins on your LTL shipments. project44’s Rating API accelerates rate quote efficiency by automating manual tasks like phone/email, database management, and data scrubbing. Companies who utilize it experience gross margin increases of 11% or more. Our automation technology provides stunning efficiency, empowering you to get the lowest rate quote possible.