Most LTL carriers have implemented 2005 GRIs

By Ray Bohman -- Logistics Management, 6/1/2005

Last month we reported on the 2005 general rate increases (GRIs) that several regional motor carrier rate bureaus had approved and put into effect. Since then, many individual less-than-truckload (LTL) motor carriers of general commodities have gone forward with their own annual GRIs, some of them higher than those issued by several of the rate bureaus.

The information above is a small sampling of the general rate increases established by major national, regional, and interregional LTL carriers, along with their effective dates. It should be noted that few, if any, of the GRIs are across-the-board increases, but rather are "average" increases. That means rate hikes on some traffic lanes will be higher than the average and some will be below that level.

As has been the pattern over the past several years, a number of individual LTL carriers implemented their 2005 GRIs earlier than they did last year. Some dates, in fact, were more than a month earlier. Roadway Express, for example, implemented its GRI on April 25 this year, while last year's increase took effect on June 1.

When asked which costs this latest round of GRIs is designed to cover, LTL carrier officials cited the following:

• Increased labor costs
• Increased costs for benefits, particularly health care
• Increased costs for insurance
• Increased costs for new equipment
• Increased costs for driver training and retention
• Higher tolls
• Investment in new technology
• Security costs

For many individual LTL carriers, this year's general rate increases are a few tenths of a percent lower than last year's GRIs. Many are in the 5.5 to 5.6 percent range, but some are similar to the hikes they imposed last year and are right up there around 5.9 percent.

When you add to those general rate increases the higher fuel surcharges that currently are in effect, you could be looking at an increase of up to 7 percent over last year's LTL transportation costs.

One favorable development is that diesel fuel prices have been falling. At this writing, the national average price of diesel fuel had declined from a high of $2.316 per gallon on March 14 to $2.227 on May 9. Another plus is that some motor carriers did not increase their accessorial charges, Overnite Transportation being a prime example.

Not all shippers will be forced to bear the full impact of the general rate increases LTL carriers have put in effect. Through negotiations some will secure higher discounts to partially offset rising rates.