Con-way Freight to implement 6.9 percent GRI, effective July 9

Con-way Freight, the less-than-truckload subsidiary of Con-way Inc., is the most recent LTL carrier to roll out a mid-year general rate increase (GRI).

By ·

Con-way Freight, the less-than-truckload subsidiary of Con-way Inc., is the most recent LTL carrier to roll out a mid-year general rate increase (GRI).

The company said yesterday that a GRI averaging 6.9 percent for non-contractual business will take effect on July 9. And it added that the GRI will be implemented for customers on the company’s CNW 599 tariff and will apply to general LTL rates, minimum charges and accessorial or supplemental fees for special services associated with LTL shipments moving within the United States and Canada, as well as cross-border shipments moving between the U.S., Puerto Rico and Canada.

“The effect of the rate increase will vary for individual customers and shipments based on characteristics such as geography, lane, product classification, weight and dimensions,” said Con-way officials.

Other LTL carriers recently announcing rate hikes include FedEx Freight’s 6.9 percent GRI, effective July 9 and ABF’s 6.9 percent GRI increase announced on June 11. ABF did not specify when the rate increase would take effect.

As LM has reported, the LTL sector has made up significant ground from the depths of the Great Recession. This is due, in part, to tighter capacity and steady rate gains since 2010.
What’s more, there are many drivers contributing to the turnaround occurring in the LTL sector, including a sharp focus on yield management and contractual relationships, coupled with an ongoing commitment to service reliability. But even with this positive momentum, it is clear challenges still remain as volumes and the general economy remain below pre-recession levels seen in 2007 and earlier.

In an interview with LM, Satish Jindel, president of Pittsburgh-based SJ Consulting, said that this 6.9 percent is in line with previous increases made by many LTL carriers in 2011 and about 1 percentage point higher than 2010 LTL increases, which were in the 5.9 percent range. Many LTL carriers rolled out multiple rate increases in 2010—in the first and fourth quarters.

“In LTL, a much smaller percentage number of customers experience these rate increases,” he said. “LTL’s have to cover the higher costs of supporting all their customers from a smaller group of customers [with the 6.9 percent GRI]. And the LTL industry as a whole struggles with getting a return on its operations.”

With three of the major LTL players having introduced rate increases in recent weeks, it stands to reason that more are on the way.

Stifel Nicolaus analyst David Ross wrote in a research note that LTL’s should continue to have the upper hand over shippers when it comes to pricing power.

“During 1Q12, LTL yields (excluding fuel surcharges) continued to climb from the late 2009 trough, and we expect them to continue rising through 2014, even as comps get tougher, because they are still a good bit away from where they need to be, in our opinion,” wrote Ross. “Given increased price rationality among competitors and the structural tightening in active capacity (# of trucks and people moving LTL freight), we believe pricing power should remain with the carriers as long as capacity and pricing remain rational.”

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

ABF Freight · FedEx · Less-Than-Truckload · LTL · All Topics
Latest Whitepaper
Case Study: LEAN Yields Big Results
Every day, companies across a wide range of industries use LEAN in their supply chains, warehouses and distribution centers, finance departments, and customer service centers, among other areas. LEAN practices improve safety, quality, and productivity by extracting cost and waste from all facets of an operation – from the procurement of raw materials to the shipment of finished goods.
Download Today!
From the October 2016 Issue
Over the past decade we’ve seen a major trend in regards to safety regulations for freight transport within the United States as well as for import and export shippers—that trend is the “international­ization” of rules and regulations.
European Logistics Update: Post-Brexit U.K. moving ahead, but in which direction?
Badcock Home Furniture &more: Out with paper, in with Cloud TMS
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
How API Technology Connects the Transportation Economy
Dynamic decision making is made possible through accurate, actionable data. When combined with progress in data science and the Internet of Things, technology companies that add value to direct-to-carrier APIs and combine them with high-power data analytics will create new concepts for the information economy.
Register Today!
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....
25th Annual Masters of Logistics
Indecision revolving around three complex supply chain elements—transportation, technology and...

2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...