What to look for in an LTL Rate Comparison Systems

 

What to look for in an LTL Rate Comparison Systems

 

What rates can be used in a 'Rate Comparison System'?

"Bureau Rates" - Bureau rates can be thought of as the 'average rate' for that shipment.
(+) The rates do not favor any carrier.
(-) Added expense to purchase rate base. Reduces carrier's ability to creatively discount.

'Single Carrier Rate Base' - Used when a customer's priority is to compare 'Apples to Apples'
(+) Low/no cost to obtain rate base.
(-) Gives huge advantage to that one carrier. Reduces all other carrier's ability to creatively discount. (This method can be thought of as you having to charge your customers based on your competitors cost, not based on your costs)

'Multi-carrier Rate Bases' - Each carrier is allowed to use the rate base of their choice, the same rate base as they would do without a rate comparison program.
(+/-) Depending on the rate comparison system selected, obtaining the rates can range from low/no cost to hundreds or thousands of dollars per rate base.
(+) Customer can take advantage of each carriers lane pricing, which can be YOUR LARGEST AREA OF COST SAVINGS. Carriers spend thousands of dollars a year analyzing freight lanes, forcing those carriers onto either a single or bureau rate base removes their ability to offer you the advantage of their lane pricing. Also, carriers can be the most creative with discounting when using the carriers own rate base.
(-) Not all comparison systems can handle more than one rate base, but will the savings of purchasing a 'single rate base' system offset the saving LOST due to loss of lane pricing.

What types of rates can the shipping system handle?

Most systems handle CWT / hundred weight rates. LTL carriers sometimes offer Skid / Pallet, Lineal and cube pricing.

Who maintains the carrier rate bases?

The system provider can either as maintain carrier rate bases as maintenance or on a 'per fee basis' or they can be maintained by the customer.

What types of discounting / pricing can the shipping system handle?

The two main kinds of discounting are percent and FAK / Freight All Kinds. Carriers can also offer pricing applied per zip code, per service type (direct / inter-line), per direction (inbound / outbound), per terms (Pre-paid / Collect / Third Party). Most can handle the basic FAK and percent, but does the system allow those types of pricing per freight class? Can the system handle your current carrier tariffs?

How does the shipping system allow for Fuel Surcharges?

When fuel goes over $1, most carriers start charging a surcharge. While the surcharge is based on a government weekly average, the similarities stop there.

The fuel surcharge varies by the day of the week the surcharge is implemented, the amount that is charged, whether or not the surcharge applies to accessorials.

How does the shipping system allow for Accessorial Charges?

Not all accessorials can be calculated prior to shipment, such as 'per hour' charges. Charges that can be calculated prior to shipment are done so either as a flat charge, a per hundredweight charge or as a percent of base charges.

Who maintains discounts, fuel surcharges and accessorials?

The system provider can either as maintenance or on a 'per fee basis' or they can be maintained by the customer.

Does the system include carrier service standards?

Current carrier service standards are important both in finding the fastest carrier and also for calculating carrier rates. Carrier pricing is often dependent on if a shipment is direct or interline or via a partner carrier. Having no service files or outdated service files can greatly affect the accuracy of your rates.

Who maintains the carrier service files?

The system provider can either as maintenance or on a 'per fee basis' or they can be maintained by the customer.

What features and services are included in the price and what items are extra's?

On some systems, even basic items such as the Bill of Lading is listed as an extra (for an extra price). Some of the older and more basic systems on the market can only rate one freight class per shipment.

What is the basic function of this system?

There are accounting, warehouse, small package and complete business systems. And there are shipping systems. And there are LTL shipping systems. Can these systems do anything more than create a Bill of Lading? Can they even create a Bill of Lading? Even if you are looking at something that is only a shipping system, was it designed for Truckload, Rail, Logistics or LTL?

What are the requirements for printing?

Will you need to purchase specific printers? Will you need to purchase pre-printed forms, and from whom? Will you need to purchase additional software report software? Is there an additional charge to create the Bill of Lading form?

Is the system windows or DOS based?

While both may function fine, this could be a good indicator of how current the software is, and how long it will continue to be supported before 'support is no longer available.'

Do you need your system interfaced? Can it be? And at what cost?

What are the reasons you need your system interfaced? Are those reasons worth the cost? Some systems are only designed to work with one or two accounting systems. While (just about) anything can be done for a price, what is the estimate to connect to YOUR system?