LTLs, rate bureaus are launching GRIs earlier this year

By Ray Bohman -- Logistics Management, 4/1/2006

As they say down Maine when it’s the season for some annual event, “Gittin’ that time a’ year fur it.” Well, it’s gittin’ that time a’ year fur the 2006 round of less-than-truckload general rate increases (GRIs), and many of the nation’s LTL general commodity carriers and regional motor carrier rate bureaus have announced their plans. Some have already put them into effect.

It all started with SMC3 (formerly the Southern Motor Carriers Rate Conference). On February 13, its General Rate Committee approved a 4.0 percent increase in class rates, effective April 3. There were no increases in per-shipment minimum charges or truckload rates, and the overall revenue impact was 3.25 percent.

Other rate bureaus quickly followed suit. The Middlewest Motor Freight Bureau took similar action, bumping up LTL rates on shipments weighing less than 10 pounds by 4.0 percent, with no increase in shipment minimums or truckload charges, effective April 3. The Rocky Mountain Motor Tariff Bureau, meanwhile, boosted its LTL rates by 4.0 percent, also on April 3. And the Pacific Inland Tariff Bureau decided to go forward with an across-the-board LTL general rate increase of 4.95 percent on April 17. All of these rate bureaus’ general rate increases are lower than they were last year.

Not long after those announcements, a number of individual LTL carriers came forward with their general rate increases. Most are boosting their average rates between 5.5 percent and 5.95 percent. Here is a rundown of some of the major carriers’ average increases and effective dates:

CARRIER	AVERAGE INCREASE	EFFECTIVE DATE
ABF Freight System	5.9%	April 3
Con-Way Central Express	5.5%	April 3
New Penn Motor Express	5.9%	March 20
Old Dominion Freight Line	4.5%	April 17
Roadway Express	3.9%	March 13
Saia Motor Express	5.9%	April 3
Southwestern Freight Lines	4.9%	April 3
UPS Freight (Overnite)	5.5%	April 3
USF Corp. (subsidiaries of YRC Worldwide)	5.9%	March 20
Yellow Transportation	5.95%	March 13

At the time of this writing, FedEx Freight had not yet announced its 2006 GRIs. Watkins Motor Lines, meanwhile, had projected an April 17 effective date for its general rate increase but had not announced its average percentage increase.

Note that we use the word “average” to describe these increases. That’s because very few increases actually apply across the board. Most individual carriers and rate bureaus use this time of year to restructure their rates on certain lanes. On some lanes their increases are above the average, while on others they may go lower than the average in order to remain competitive. Your best bet is to make careful rate comparisons on your key shipping. You may find some significant differences between the new rate and what you’ve been paying up to now.

Lastly, you should note that many of the increases are taking effect a month or more earlier than they did last year. For a long time, most annual GRIs took effect on or around April 15, but in recent years carriers and rate bureaus have been steadily moving their increases ahead, to the point where they are now taking effect about the same time as they did a decade or more ago.