Annual LTL rate hikes to arrive early this year

By Ray Bohman -- Logistics Management, 8/1/2000

It wasn't too long ago that most major LTL carriers and regional motor carrier rate bureaus announced a general rate increase (GRI) on or about Jan. 1 each year. But that has all changed in the last 18 months or so.

In the fall of 1998, the majority of individual carriers and bureaus moved up their GRIs by two months or more, with most implementing their increases on Nov. 1, 1998.

Last fall, many individual carriers decided to shave yet another month or two off the annual general rate increase cycle. Yellow Freight System and Consolidated Freightways implemented their increases on Sept. 1, with ABF Freight System and Old Dominion Freight Line initiating theirs on Sept. 13. And most of the rate bureaus slated their increases to begin on Oct. 1.

As we near the fall of 2000, we're seeing this pattern once again. At this writing in late July, several major LTL carriers have already announced general rate increases to take effect even earlier than they did last year. What follows is a rundown of carrier actions we've seen so far (we expect other carriers to follow suit in short order):

Table Head

Carrier	Effective Dates 2000	Effective Dates 1999	Average % Increases 2000	Average % Increases 1999

Pitt Ohio Express	May 1	Aug. 3	5.90%	6.00%
Yellow Freight System	Aug. 1	Sept. 1	5.90%	5.50%
Consolidated Freightways	Aug. 1	Sept. 1	5.85%	5.50%
Overnite Transportation	Aug. 14	Sept. 27	5.50%	4.90%

As for regional motor carrier rate bureaus, the general rate committees of three bureaus, at this writing, have already met and approved GRIs to take effect on Sept. 1. They include:

Table Head

Rate Bureau	Effective Dates 2000	Effective Dates 1999	Average LTL % Increases 2000	Average LTL % Increases 1999

Pacific Inland Tariff Bureau	Sept. 1	Oct. 1	4.50%*	5.50%**
SMC (Southern Moto Carriers)r	Sept. 1	Oct. 1	4.90%	3.90%
Middlewest Motor Freight Bureau	Sept. 1	Oct. 1	5.20%	5.50%

* Across-the-board increase

** Includes an 8.50% increase on longhaul shipments

Two other bureaus-the Rocky Mountain Motor Tariff Bureau and the North American Transportation Council (formerly called the Niagara Frontier Tariff Bureau)-have scheduled meetings of their respective general rate committees in late July to consider general rate increases, most likely to take effect on or about Sept. 1. At this time, neither the EC-MAC Motor Carriers Service Association nor the New England Motor Rate Bureau has docketed a general rate increase proposal.

Overall, it appears that many 2000 general rate increases will be slightly higher than the hikes announced in late 1999 and will be implemented about a month or two earlier than last year's were. Shippers, in fact, should abandon any hopes that those Jan. 1 general rate increases for non-contractual shipments will reappear anytime soon. If anything, we'll probably see next year's round of GRIs take effect even earlier than this year's.

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.