Dimensional Pricing for Less-Than-Truckload: Coming to an LTL Carrier Near You

New changes are coming in the LTL shipping world. Over the next year, you may need to prepare to say goodbye to LTL rates based on freight class. Dimensional pricing is the future, for better or worse, and we’ve got all the details you need to know.

What is dimensional pricing?

Historically, LTL carriers have priced their shipments based on freight class. The freight class of your shipment is determined by characteristics like density, value, ease of handling, and stowability. These freight classes have allowed for standardized, predictable pricing across LTL carriers.  

This new form of pricing, however, means the cost of your LTL shipment is strictly based on its dimensions. To put it simply, pricing will be based entirely off the freight’s height, length and width only.

Why the change?

LTL carriers have realized that switching to dimensional pricing would generally allow for more shipments to be moved at a time, which would boost their profit.

According to carriers, some customers are taking up a lot of valuable space on their trailers with relatively light and bulky shipments, essentially “cubing them out”. The trailers aren’t anywhere near their weight limit, but there’s no more room in the trailer to haul other shipments.

Some LTL carriers feel that it’s easy for customers to work the system by “misrepresenting” their freight class in order to get a lower rate. Switching to dimensional pricing leaves little room for misrepresentation, as the dimensions of the freight are clearly measurable by the carrier.  They also feel that dimensional pricing is fairer to the customer, as it will be more closely related to actual shipping costs for the carrier.

Is this guaranteed to happen?

There has been a significant amount of talk among LTL carriers about testing out the dimensional pricing method and looking into the scanning technology needed to easily calculate freight dimensions. This has been sparked by a switch to dimensional pricing in the parcel world. At the end of December 2014, UPS switched to dimensional for its ground services. FedEx Ground shifted to dimensional on packages three cubic feet or more in January 2015.

Since such major parcel carriers have already made the switch, experts are agreeing it’s a good indication that the LTL industry is soon to follow suit. In fact, UPS Freight, the LTL branch of UPS, has begun offering dimensional pricing as an alternate to class rates.  

What changes can I expect for my LTL shipping rates?

After the switch to dimensional pricing, you’ll notice cheaper shipping costs for more dense freight, whereas those shipments that are light and take up more room could be more expensive than you’re used to. For example, a large pallet containing boxes of ping pong balls would be much closer to shipping the same size pallet of bricks, while pricing based on freight class would mean two very different rates for those shipments.

Just keep in mind that LTL carriers are looking to ship as much freight as possible in one trailer to meet their profit margin. If your freight takes up most of their space, the new pricing will reflect that.  

The change may not have happened in the LTL industry yet, but it’s definitely on the way. With that being said, Trinity will be here to update you on any progress in the matter. Keep an eye out for future blogs on pricing updates and ways to save money with dimensional pricing.