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: 1262
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: 3820
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: 5689
0
Continue reading 0 Comments

Most Recent Posts

Search


Tag Cloud

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

Blog Archives