LTL Dimensional Pricing: What's the Latest?


LTL Dimensional Pricing: What's the Latest?

Saying goodbye to less-than-truckload rates based on freight class is no longer an “if,” but rather a “when.” While the debate continues over dimensional pricing for LTL shipments, it is clear now that it is the future, whether shippers are entirely on board or not.

Why the wait?

There’s been quite the debate about whether LTL dimensional pricing makes the most sense for both shippers and carriers. Currently, LTL carriers price their shipments based on freight class, which is determined by density, value, ease of handling, and stowability of the product. Every so often, these freight classes will change based on suggestions and votes from the shipping community. With dimensional pricing, items will be priced entirely off of, as it sounds, the dimensions of the LTL shipment.

Many shippers argued this, for various reasons, one being that shippers don’t necessarily have the equipment on hand to measure dimensions. Shippers also believe that dimensional pricing will be more costly than the traditional freight class pricing. Even though this upsets some, many LTL carriers agree at the end of the day, what they sell is space and not weight, so the dimensional pricing makes more sense.

Why the change?

Across the board, carriers agree there has historically been inaccuracy in freight classification because of changes on packaging, shipment/pallet stacking, manufacturing processes, and materials, which has oftentimes led to incorrect bill of lading descriptions. Overall, these changes throughout the process or the shipper not always being fully aware of the freight class of their product, can lead to a logistics headache.

With dimensional scanners, products would be scanned and priced entirely on the information gathered by the machine, therefore essentially limiting that murky, gray area when it comes to freight class pricing.

What Still Needs to Happen?

It appears carriers are trying to ease into this shift to dimensional pricing, rather than just diving in head-first. Many carriers are currently investing in dimensional scanners and are using them to check freight classification at the break-bulk terminals to change or update charges as needed.  Although this practice is limited, it is giving foundational data to LTL carriers to expand the use of dimensional pricing.

We asked a few of our carriers, and they told us they are choosing to watch how the first round of dimensional pricing goes so they can learn from others’ successes and failures before a true transition.

Have a question about what these changes could mean for your LTL shipments? Ask it here. If you would like a freight quote on your LTL shipments, fill out our quote request.