LTL carriers moderate their 2007 GRIs

By Ray Bohman -- Logistics Management, 5/1/2007

By now, most less-than-truckload (LTL) carriers of general commodities have their 2007 round of general rate increases (GRI) pretty much wrapped up, with most rates taking effect between March 12 and April 3.

What’s different this year is that more carriers than usual have come in with GRIs slightly below 5 percent—something we haven’t seen too much of over the past few years when increases were ringing in at 5.9 to 5.95 percent.

To give you some idea of the percentage increases that several of the major U.S. and Canadian LTL carriers came in with and their effective dates, see Figure 1.

What is particularly notable is the level of increases for YRC Worldwide subsidiary carriers. Long-haul carriers Yellow Transportation, Roadway Express, and Reimers Express boosted their rates by an average 4.95 percent, while shorthaul subsidiaries such as New Penn Motor Express, USF Holland, and USF Reddaway raised their rates by an average 5.9 percent.

As far as regional motor carrier rate bureaus are concerned, see Figure 2.

Other than the Pacific Inland Tariff Bureau, which implemented the highest increase of all the regional rate bureaus (6.5 percent), all the others were under 5 percent, with three bureaus holding their LTL increases to just 4 percent. Most of the individual carriers we tracked put their 2007 GRIs into effect a few days earlier than last year.

This year, they took effect from one day earlier (Yellow and Roadway) to as much as 22 days earlier (Old Dominion). Only one carrier, Saia, began its GRI on the same date as last year according to the effective date comparisons we made.

As our pricing trends columnist, Elizabeth Baatz, will confirm in her Mid-Year Outlook Update in June, LTL rates are falling subtly. There’s not enough freight, and drivers are looking for loads to move, she reports. According to a source in the story: Rates are dropping now even farther than expected six months ago.