4 Way Logistics, Inc. | A Short Guide to Better LTL Pricing


A Short Guide to Better LTL Pricing

19 May 2015, by Mike Rogers in Blog, LTL Freight, Transportation Spend

Boxes on Plts




In today’s marketplace, it’s wise to keep your costs as low as possible, but when it comes to shipping, you might feel you are at the mercy of your carriers. For many companies, shipping costs have risen even though providers are promising the lowest possible price. Your best option is to take steps to confirm the validity of the price increases and research other freight shipping options. 

How much does it really cost?

All carriers use Operating Ratios that detail the costs that is incurred when freight is hauled. This detailed worksheet is available upon request although many businesses don’t even know it exists. Without accurate information, you are not able to discuss options to mitigate your shipping costs.

Conduct some analysis

Once you have the information from the Operating Ratio Worksheets, you are then able to determine if your shipper is offering competitive rates. By completing a benchmark analysis, you know where your rates are relative to the current marketplace. Sometimes this shows sizable marketing opportunities. On the other hand, it could show that your current freight shipping charges are lower than expected.

Analyze the marketplace

You might be loyal to your current provider, but they might not hold your best interests or your bottom line in  mind. Changes in terminal stops cause a carries to change their lane densities and can significantly affect your costs. With an analysis of the current LTL marketplace you have a better understanding of what carriers service what lanes. This can assist you in choosing a freight shipping carrier that values your business and can provide you with a lower cost.

Know your product

Analyze the products which are being shipped to determine the size, weight, dimensions and value. These factors are scrutinized by the carries. Carries have the ability to determine the density of every shipment, making weight and dimensions extremely important especially to pricing. You might need to review your packaging options to meet shipping requirements and avoid other issues, like claims.

By researching some basic factors and asking questions you could renegotiate your current shipping charges or fine a better option for your shipping needs. Some of the information such as the operation ratio worksheet is available but might be more difficult to find. Next utilize the help of professional industry associations to understand the data of the transportation marketplace.


Lastly, don’t be afraid to ask for help. These steps can help you get better LTL pricing, but you may not have the staff or expertise to handle this due diligence. In that case, another solution may be to outsource. If you want more information on how outsourcing may help your business, grab your free copy of “Return on Logistics – Turning Your Supply Chain Logistics into a Competitive Advantage and Bottom Line Profits” at www.returnonlogistics.com