Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Subscribe to this list via RSS Blog posts tagged in dimensional pricing

 

 

b2ap3_thumbnail_Scan_20170318-185343_1.jpgThe following is my annual report on the state of the LTL Freight Industry in the United States and Canada.

Revenues Stagnated Again in 2017

Here are links to the top 100 carriers in Canada (http://www.todaystrucking.com/top100) and the top 25 LTL carriers in the United States (http://www.joc.com/sites/default/files/u48801/truck-tables_1_0.jpg).

...
Hits: 7530
0
Continue reading 0 Comments

During the Great Recession, the LTL freight industry experienced a “near death” experience as declining freight volumes, excess capacity and falling rates conspired to dramatically reduce revenues and profits. The LTL market shrank from more than $33 billion U.S. at the peak in 2006 to $25.2 billion at the recession's trough in 2009. As we approach the mid-point of 2015, the fortunes of this industry look much brighter. Here’s why.

The industry has consolidated

Looking back over the past 25 years, only 4 of the top 50 carriers are still in operation. Over the past 10 years, there has certainly been a changing of the guard at the top. As noted in a recent Stifel transportation report, “Old Dominion has replaced FedEx Freight/Con-way Freight as the most profitable carrier in the industry. USF was bought by Yellow Roadway to become YRC Worldwide before it nearly went the way of Consolidated Freightways, Overnite became UPS Freight, Central Freight Lines went public then private, Vitran was sold in pieces, Saia sold Jevic (which then went bust), and Roadrunner acquired Dawes and Bullet to become the only national asset-light general commodity LTL carrier. The industry is more concentrated than ever . . . “

The report goes on to report that “the top-5 (U.S.) carriers have roughly 55% of the market. And those top-5 - FedEx Freight, YRC Worldwide, Con-way Freight, UPS Freight, and Old Dominion Freight Line - are all either historical disciplined pricers or have been burned in the past by their undisciplined ways or have no choice but to push price to improve margins.” The Canadian market is quite similar with TransForce, Day & Ross and Manitoulin dominating the LTL sector. Unlike the truckload sector, consolidation means more leverage and pricing power for the top LTL players.

Today’s LTL Carriers are leaner and meaner

...
Hits: 6721
0
Continue reading 0 Comments

Freight costs have historically been calculated on the basis of gross weight in kilograms or pounds. By charging only by weight, lightweight, low density packages become unprofitable for freight carriers due to the amount of space they take up in a trailer or container in proportion to their actual weight.

Dimensional weight is also known as DIM weight, volumetric weight, cubed weight or density-based pricing. The concept of Dimensional or Cube Weight is gaining popularity in the LTL freight industry as a uniform means of establishing a minimum charge for the cubic space occupied by a carton or pallet. Three of the largest LTL freight carriers, UPS Freight, FedEx Freight and YRC introduced dimensional LTL freight pricing this year. Currently FedEx Ground only applies dimensional pricing to packages measuring three cubic feet or greater.  Effective January 1, FedEx and UPS will apply dimensional pricing to all packages.  

The implication of this change in pricing methodology has caught the attention of the media (see article in Wall Street Journal). Experts say the impact could result in increased shipping costs of 5 to as much as 25% - - - if shippers don't take action. This blog will provide shippers with a guide to prepare for the introduction of this LTL pricing methodology.

A Definition of Dimensional or Cube-Based Pricing

Dimensional weight is a calculation of a theoretical weight of a shipment. This theoretical weight is the weight of the package at a minimum density chosen by the freight carrier. If the shipment is below this minimum density, then the actual weight is irrelevant as the freight carrier will charge for the volume of the package as if it were of the chosen density (what the package would weigh at the minimum density). Furthermore, the volume used to calculate the Dimensional Weight may not be absolutely representative of the true volume of the shipment. The freight carrier will measure the longest dimension in each of the three axes (X, Y and Z) and use these measurements to determine the shipment volume. If the carton or pallet is a right-angled box, then this will be equal to the true volume of the package. However, if the package is of any other shape, then the calculation of volume will be more than the true volume of the package.

...
Hits: 9350
0
Continue reading 0 Comments

Most Recent Posts

Search


Tag Cloud

capacity shortage Management transportation news dark stores USMCA truck capacity Finance and Transportation Railway Association of Canada Carriers Hudsons Bay Company Freight Carriers Association of Canada last mile delivery Montreal Canadiens Geopolitics Training New Hires TMS CP Rail Right Shoring Sales Management Shipper Bobby Harris NMFC home delivery Leadership Outsourcing Sales Distribution freight rate increases Digitization Government drones robotics China driver freight transportation broker security coaching 3PL Fire Phone trade Success failure entrepreneur freight agreements Comey Load broker Accessorial Charges Rate per Mile freight cost savings freight payment freight audit Doug Nix computer security recession Leafs 2014 freight volumes freight transportation conference Transport Capital Partners (TCP) digital freight matching Training Crude Oil by Rail Business Transformation Strategy Trucking Transportation Canada U.S. trade Uber Freight Colilers International Business skills Canadian Protests freight forwarders Load Boards Ferromex NAFTA dynamic pricing truck driver shipper-carrier contracts Canada LCV's small business CSX broker bonds business security LTL Entrepreneur intermodal Rail Canada-U.S. trade agreement YRC New York Times Microsoft professional drivers RFP Emergent Strategy 2015 Economic Forecast Conway Map-21 pipelines freight costs US Housing Market Dedicated Contract Carriage Social Media CN Freight Recession 2014 freight forecast buying trucking companies David Tuttle Cleveland Cavaliers $75000 bond small parcel Retail transportation trucking company acquisitions business start-up freight bid Canadian Transportation & Logistics Sales Strategy Crisis management Horizontal Supply Chain Collaboration EBOR tanker cars Climate Change ProMiles shipping FuelQuest Consulting marketing solutions provider Justice Canadian economy bulk shipping Otto Whole Foods Omni Channel Career Advice Yield Improvement Tracy Matura CSA energy efficiency MPG IANA home delibery natural disasters e-commerce Donald Trump Truckload Surety bond Value Proposition CRM Driving for Profit Werner 360ideaspace transportation audit Global Transportation Hub driver pay consumer centric freight payment Broker computer protection Freight Management Blogging Derek Singleton Failure laptop truck drivers US Auto Sales Life Lessons Doug Davis FCPC Habs Infrastructure ShipMax transportation newspaper General Motors Freight Toronto President Obama dimensional pricing rail safety capacity shortages Anti-Vax economic outlook Blockchain USA Truck Digital Freight Networks YRCW fuel surcharge economic forecasts for 2012 driverless Freight Shuttle System the future of transportation customer engagement KCS Reshoring University of Tennessee Canadian truckers cyber security derailments Business Development autos Warehousing Search engine optimization Masters in Logistics Packaging Online grocery shopping 2013 Economic Forecast Driver Shortage 2012 Transportation Business Strategies. Jugaad Business Strategy Education NS Software Advice shipper-carrier collaboration JB Hunt CITA Shipper Pulse Survey selling trucking companies economy TransForce Facebook Twitter Freight Capacity Schneider Logistics asset management Muhammad Ali Covid-19 ELD Job satisfaction Adrian Gonzalez network optimization LinkedIn Wal-Mart Politics technology APL US Economy Dan Goodwill supply chain management CSA scores autonomous vehicles future of freight industry shipping wine Canada's global strategy Tariffs Success Loblaw MBA Electric Vehicles Dedicated Trucking Rotman School of Business risk management Transcom Fleet Leasing Deferred Packaging Global experience freight transportation in 2011 Transportation service 2014 economic forecast Toronto Maple Leafs Hockey shipper-carrier roundtable Scott Monty Impeachment Freight contracts Grocery Amazon Swift BlueGrace Logistics FMCSA Freight Rates cars US Manufacturing Transportation Buying Trends Survey Transloading FMS Canadian freight market freight RFP online shopping TMP Worldwide freight broker automation hiring process Celadon Stephen Harper Trade Vision Retail Coronavirus Trump employee termination Regina Inbound Transportation financial management Spanx CN Rail freight marketplace NCC cheap oil Keystone Pipeline driver shortages routing guide BNSF peak season Harper Davos speech 3PLTL Freight Matching mentoring FCA computer Sales Training Social Media in Transportation Sales US Election freight audit Trucker Protest Transplace UP carrier conference Associates

Blog Archives

March
February
December
October
September
August
June
May
April
March
January