LTL Pricing News Brief

LTL Carrier Updates
Capacity remains incredibly tight across the LTL industry. All of our carrier partners are straining to manage demand for their services while challenged with a shortage of drivers. Some are managing this strain better than others. All indications are that industry capacity will remain tight for some time. It may even get worse before it gets better.

We are currently seeing hot-spots across the US which are largely tied to specific carriers being particularly challenged with driver shortages in key markets. This is forcing carriers to manage pickups daily relative to the availability of drivers. We are currently aware of these situations:

• XPO is limiting the acceptance of freight inbound to Denver and the state of Utah. You may have to make alternative arrangements with other carriers for the time being.
• XPO is declining pickup of shipments with pieces over 8 feet in length and other difficult-to-handle freight in the Atlanta market. They are also experiencing significant capacity issues in other Georgia markets such as Savannah, and Norcross.
• YRC Freight is experiencing significant driver shortages in both Phoenix and Denver. As they address this situation, you should expect significantly delayed pickups and deliveries in these markets, as well as delays on any pass-through freight.
• AAA Cooper is declining pickup of shipments with pieces over 8 feet in length and other difficult-to-handle freight in markets such as Atlanta, Houston, and Miami.

While we are not aware of any formal publicized embargo in place, you should expect carriers to manage this issue of driver availability on a daily basis within each market. You should expect to see carriers declining pickups, particularly for large shipments, shipments with long pieces, and/or shipments with difficult-to-handle or load pieces.

Residential and Limited Access Pickups/Deliveries
You probably know that LTL carriers apply an accessorial charge for shipments picked up at private residences as well as Limited Access locations. The definition of a Limited Access location can vary from carrier to carrier, but generally means locations that do not have a loading dock, are not open to the walk-in public, and/or require extensive security procedures to gain access. Examples may include the following:

Airports Camps and Parks Construction Sites
Churches and Places of Worship Colleges and Universities Farms and Ranches
Mini-Storage Units Military Bases Mine Sites
Prisons Restaurants Schools

You may also know that carriers are applying charges for these pickups and deliveries on a more-frequent basis. This is happening for several reasons:

• Use of mapping tools such as Google Maps
• Use of address databases that identify residential addresses
• Use of on-line address subscription services
• Scanning for key words such as “school” or “construction” in the customer name
• Driver compliance programs

While use of these tools has increased the application rate as well as the application accuracy, carriers of course are not always correct when applying these charges. Here are a few points to consider if you feel a charge for Residential or Limited Access is not appropriate:

• When in doubt, check Google Maps to verify if the location meets the conditions noted above. Check the carrier rules tariff for specifics.
• Some carriers scan customer names to look for keywords such as “Airport” or “Construction”. They may apply a charge in error. After all, Pepperidge Farms is not a limited access location.
• Residential address databases may incorrectly flag businesses in residential areas.
• Keep in mind that a home-based business operating on residential property IS a residential location.
• Airport locations are only considered limited access if they are behind the TSA security layer. A warehouse that borders an airport but is not behind the TSA security layer is NOT a limited access.
• Subscription services tend to incorrectly identify Indian reservation and mixed-use locations (apartments above commercial stores) in urban areas. Be watchful for these.

To reduce surprises and rebills, you should educate your customers about residential and limited access pickups/deliveries. These locations should be identified when a shipment is booked to ensure the carrier invoice is as expected. Carriers will catch these locations and issue rebills after the fact, so it is best to get the BOL filled out properly on the front end.

Detention
Another accessorial that we see getting applied with greater frequency is Detention. Due to capacity issues and driver shortages, it is incredibly important that carrier drivers can make efficient pickups and deliveries. If they are detained on site, they cannot make other pickups or deliveries that day. You wonder why a carrier fails to make a pickup or a delivery? Sometimes it can be due the driver getting detained earlier in the day.

All our carrier partners have Electronic Logging Devices (ELDs) installed in their drivers’ trucks. Those drivers frequently also have a hand-held device, or PDA, to enter pickup and delivery information. These electronic devices allow carriers to track the time that a driver is on site, and thus provide them the information to assess Detention charges.

Carriers typically provide 30 minutes of “free time” for a pickup or delivery. If that free time is exceeded, Detention can be applied. While this can happen at any location, we see it frequently at grocery warehouses, container freight stations, and residential deliveries. Carriers would actually prefer not to assess Detention. But when their driver is significantly delayed, they use Detention charges as a means of influencing behavior at the offending location.

If you suspect a carrier is incorrectly applying Detention, check for notations on the DR or other carrier documents that may support or disprove the charge. You can also confirm with the party at the location that the driver was delayed. As with any technology, it is only as accurate as the person operating it. If a driver fails to properly notate when he arrives and departs a location, Detention may be incorrectly assessed.

NMFC (National Motor Freight Classification) Corner

We plan to cover topics related to the National Motor Freight Classification, or NMFC, in each issue of the LTL Pricing News Brief. Understanding the NMFC and the classification of commodities is critical to understanding LTL carrier pricing and ensuring carrier invoices meet expectations.

The NMFC guidebook which contains freight classifications is typically updated 3 times per year following public docket meetings. Pubic files are made available on the NMFTA website at http://www.nmfta.org/pages/publicdocketfiles.

The latest docket meeting was held on June 12, 2018. Changes decided during that meeting will be effective on August 25, 2018. Some of the impactful updates include:

• Lamps and Lightbulbs under NMF items 109530, 109550, 109600, and 109610 are being cancelled and will now classify as Lamps or Lighting Fixtures NMF 109700 which is a density-based commodity. They currently range from CL100 to CL175.
• Playground Apparatuses NMF 15510 CL70 will be adjusted to CL60-CL400 based upon density.
• Dishwashers NMF 119540 will see their class increase from CL100 to CL175
• Various cleaning/scouring/washing compounds such as Soap NMF 48580 will see class increases.
• Hosiery (Socks, Stockings, Pantyhose) NMF 49940 will see a class increase from CL100-CL150 to CL125-CL200.
• Commercial mixing machines NMF 125750 will realize a class adjustment from CL85 to CL70-CL175 based upon density.
• Granola NMF 42380 will see a class increase from CL65 to CL92.5.
• A new NMF item at CL70 is being created for Electronic cigarette liquid.
• Electric razors NMF 168810 will see a class increase from CL150 to CL175.
• Towelletes (wet wipes) NMF 49290 will see a class increase from CL70 to CL77.5 or CL100 depending upon density.
• Athletic mats/cushions NMF 16840 will see a class increase from CL100 to CL250.
• Musical Instruments NMF 138980 and 139000 will see a class increase from CL125 and CL150 to CL200.

 

Questions? Feedback?
If you have any questions about the contents of this post or any questions in general about LTL pricing, please reach out to us.

Thank you,

Justin Bright – CEO Brighter Logistics

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