LTL news: Rate increase on tap for Old Dominion Freight Line

Effective September 6, ODFL will implement a GRI of roughly 4.9 percent.

By ·

Less-than-truckload (LTL) transportation services provider Old Dominion Freight Line (ODFL) is the latest LTL entrant to announce a second half 2011 general rate increase.

Effective September 6, ODFL will implement a GRI of roughly 4.9 percent, according to ODFL Vice President of Pricing Todd Polen.

“The general increase is in keeping with our long-term pricing philosophy and as such involves a restructure that provides for increases in our rates based on length of haul rather than the traditional across the board increases,” Polen said in a statement. “The tariffs affected by the Sept. 6, 2011, increase are the ODFL 559/555 and the 505 Canadian tariffs. The rate increase will also provide for a nominal increase in minimum charges in Intrastate, Interstate or cross border lanes. Although each customer will have a different financial impact based on the lanes and distance their shipments move, the overall impact of the increase is approximately 4.9 percent. Similar increases will also be taken on Alaska, Hawaii, Puerto Rico, Caribbean, Canada and Mexico.”

This increase follows matching 6.9 percent increases announced in recent weeks by UPS Freight, YRC, and Con-way, Freight, which took effect on August 1, and ABF Freight System, whose increase kicked in on July 25. FedEx Freight recently unveiled a 6.75 percent GRI bump, effective September 6.

Satish Jindel, president of Pittsburgh-based SJ Consulting, recently told LM that these rate increases are a good thing, because the LTL industry needs to become more profitable.

“The market is getting tighter, and it is a good time for this,” he said. “Capacity is part of this in terms of the two types of capacity the industry deals with: one being fixed capacity and the other being variable capacity.”

Regarding the latter, Jindel said it is very tight at the moment, as it involves driver availability, which is very challenging at the moment.

While raising rates is seen as key for recovering revenues lost during the recession, Jindel said there are other effective ways to address this situation. One way is for LTL carriers to charge for what they actually handle.

A recent research note from Ed Wolfe at Wolfe Research cited an LTL carrier as saying its recently implemented GRI was sticking, “although it could become more difficult to gain further price increases if the economy continues to slow materially.”


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

Less-Than-Truckload · LTL · ODFL · All Topics
Latest Whitepaper
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...