A look at Roadway's new expedited service

By Ray Bohman -- Logistics Management, 1/1/2000

You don't have to look at many ads for less-than-truckload (LTL) carriers before it becomes clear that many are entering the expedited-shipment market.

One of the newest of these niche services is "3-Day Coast-to-Coast Service," offered by Roadway Express. It applies between thousands of points in 17 Eastern states plus the District of Columbia and hundreds of points in California, Nevada, Oregon, and Washington.

For shippers looking for an alternative to deferred airfreight service, this air-based service, offered in partnership with a major domestic airline, provides fast, reliable two- or three-business-day door-to-door service, with pickups available up until 5 p.m. every weekday. Twenty-four-hour shipment visibility is available through all of Roadway's tracking services.

Shippers who want to use this service must write the shipment's dimensions on their bills of lading, as light-density articles ("one pound per 194 cubic inches or fraction thereof," as Roadway's tariff describes it) may be rated under dimensional rules. No dangerous goods--those defined as such by the International Air Transport Association (IATA) and the International Civil Aviation Organization (ICAO)--are accepted in this service.

One strong selling point for this new service is that Roadway offers much higher liability coverage--$10 per pound--than the typical air coverage of only 50 cents per pound.

It should also be noted here that those using 3-Day Coast-to-Coast Service pay a higher per-shipment minimum charge of $100 than the minimum applicable under standard ground service.

As for pricing, rates are assessed on a per-pound basis. Rates for shipments originating in or destined to points in Michigan's lower peninsula, Ohio, or northern Kentucky are 5 cents per pound lower than rates between the West Coast and the 17 Eastern states and Washington, D.C. If you ship to or from points in Roadway's delivery zones 3, 5, and 7--generally points that are about 40-plus miles from a Roadway service center--a "beyond" charge of 20 cents per pound is tacked on.

How much more will you pay for Coast-to-Coast Service over Roadway's standard ground service? We ran a comparison, using Class 70 LTL rates for the ground service rates. As you will see below, the added premium for this expedited service varies according to the discount you receive on ground service and the weight of your shipment. The lower your discount, the lower the premium you pay. The same goes for lighter-weight shipments as shown in the example below. This example, chosen at random, applies on LTL shipments moving between Westerly, R.I., and Seattle, Wash.

Added % Premium for Coast-to-Coast Service

Shipment 50% 55% 60%

Weight Discount Discount Discount

325 lbs. 15.70% 28.55% 44.62%

700 lbs. 46.95% 63.28% 83.70%

1,500 lbs. 76.45% 96.05% 120.68%

3,500 lbs. 103.74% 126.50% 154.68%

There are a few other restrictions on this service, including four-day transit times between delivery zones 5 and 7, as well as on inbound shipments to three service centers in Maine, one in Vermont, one in New York, three in North Carolina, one in California, and four in Michigan.

Ray Bohman is a well-known consultant and author. Mr. Bohman is editor of several highly successful newsletters on transportation and is a consultant to a number of national trade associations. He is president of The Bohman Group, consultants and publishers in the freight-transportation field. His offices are located at 27 Bay Lane, Chatham, MA 02633. Phone: (508) 945-2272.