If you move your freight through LTL (less-than-truckload) carriers, sooner or later you’ll hear the term General Rate Increases or GRI’s pop up. What is it and how can you reduce your impact from them?
What is a GRI?
GRI’s are the average amount that an LTL motor carrier will increase their base shipping rates. GRI’s have zero impact on contracted rates, but they give us insight on what to expect during contracted negotiations.
Typically, GRI’s only happen once a year. As of March 2020, industry leaders like FedEx, UPS, and Old Dominion have already announced and published their increases, which ranged from 4-6 percent. The rate increases assure that carriers continue to operate efficiently and maintain profitability. They happen for many reasons such as:
Offsetting Carrier Costs
GRI’s are meant to offset any predicted increases that carriers may incur. Increases in carrier costs this year were caused by technology upgrades, increases in regulatory compliance, and rising fuel costs.
Increased Competition for Drivers
Attracting new drivers and keeping current ones is still a hot topic for carrier companies. Keeping up with demand means offering carriers better pay and benefits. These includes things like higher driver wages, better sign-on packages, better health insurance, and 401Ks to stay competitive in the industry. Those costs work their way to shippers through General Rate Increases.
Equipment Costs
The need for companies to invest in new technology, manage and update their fleet, and brick-and-mortar costs can cause an increase in their rates.
Reducing Your GRI Impact
Shippers can often predict and plan in a General Rate Increase but working with a third-party logistics company like Trinity Logistics can help reduce your impact from GRI’s altogether.
3PLs are less impacted by GRI’s. You can count on our experience negotiating with carriers, buying power, and our LTL relationships keeping the impact of GRI’s to your company to a minimum.
Choose to ease the headaches of GRI’s and begin working with Trinity Logistics today.