Needed advice for a new LTL/Expediting Shipping company owner

Discussion in 'Questions From New Drivers' started by Lightspeed2013, Jun 20, 2013.

  1. Lightspeed2013

    Lightspeed2013 Bobtail Member

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    Jun 20, 2013
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    Hey guys, was really hoping to reach out to anyone who is up for helping. I recently started a shipping company and have decided to focus on LTL/Expediting. I am lucky to have some great customers but wanted to see If I could get some insight on pricing certain deliveries. LTL shipments can be priced in so many different ways I want to make sure I am being fair, but not lowballing myself as well. Any information would be great, just looking for a typical way that most LTL companies price out shipments.
     
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  3. heyns57

    heyns57 Road Train Member

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    Back when rates were controlled, each commodity was analyzed as to weight density, fragility, etc. I remember when a manufacturer of hand cranked and electric ice cream makers came out with a new model. Samples of the new model were submitted to a committee. Rate clerks worked with big books of published rates, and truck lines often offered discounts to their best customers. Now, every thing is different, but you must still consider the value of the item and potential claims.
     
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  4. Lightspeed2013

    Lightspeed2013 Bobtail Member

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    Jun 20, 2013
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    Thank you very much for the response. I've researched that most LTL companies will base pricing off distance, weight, freight class, fragility (as you said), and other extra charges (lift gate, inside delivery etc.). Ive been just trying to simplify the pricing process because I am specializing in packaging supply and equipment deliveries, and also printer supplies, meaning only one classification. Unfortunately, with as much research as I've done its hard to make a decision without real time prices.
     
  5. vavega

    vavega Light Load Member

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    don't forget volume or cube, which is how much space the freight takes up in the trailer. packaging supplies (think those foam beady things, the name escapes me at the moment) take up a lot of cube compared to their weight. a trailer load of those might weigh less than 10k lbs, vs a trailer load of equipment which will be more. a truck load of each going to the same place (distance) won't pay the same if it's based on weight and distance, but the cost to you will be close to the same based on fuel, wear and tear, and driver's pay.
     
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  6. Lightspeed2013

    Lightspeed2013 Bobtail Member

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    Jun 20, 2013
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    Very good feedback thanks guys. Hopefully I can ballpark some numbers by researching some other companies shipping similar products.
     
  7. Big Don

    Big Don "Old Fart"

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    Something else to worry about for you: Time and time again, as an LTL P & D driver, I would run into pickups where the shipper had absolutely NO IDEA on how to package whatever he was shipping, to avoid damage. Not only to his freight, but to your other customer's freight.
    If it isn't packed correctly and protected, you WILL have a freight claim. If you are dealing with the same shippers all the time, it isn't a problem. It is the odd-ball things. Maybe something like a large electric sign that somebody wants to send in for repair. Or even slot machines sent from one casino to another.
    Transporting used equipment has its own set of problems. That huge dent in the metal cabinet? That long scratch on an otherwise fine piece of furniture?
    And then you have the car parts, shipped from junk yards. If they are crooks, (and a lot of them are,) they will ship out damaged parts, well packaged, then when the consignee opens the package and finds that fender for the 1958 Corvette has this huge crease, or even break in it, the shipper will try to file for "freight damage."
    LTL is not an easy business.
     
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  8. Lightspeed2013

    Lightspeed2013 Bobtail Member

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    Jun 20, 2013
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    Thanks so much guys, I have encountered many customers that have had the same packaging problems you refer too I'm glad you said that as well. One more question if you guys don't mind, being a new owner I constantly stress when I slow down in business during the year. Most of my customers are supply chains/distributors, but I notice in the summer the deliveries consistently slow down from mid april to july. I have a smaller truck in my fleet as of now so I know thats part of the problem but was wondering if this is normal. Thank you again for any input I really appreciate it.
     
  9. chompi

    chompi Road Train Member

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    I would recommend constantly checking shipping prices by keeping your eyes on load boards and even just calling around to competitors to get estimates. Also national fuel averages are going to play a part in your costs so you may want to also check that daily along with surcharges. Depending on what you are hauling for customers there are websites that also show going rates.
     
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  10. Lightspeed2013

    Lightspeed2013 Bobtail Member

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    Jun 20, 2013
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    Thanks for the recommendations really appreciate it. The primary reason I'm running into issues price wise is that I'm trying to simplify my pricing structure while staying competitive. Most shipments I do are Expedited or next day, and are taken in a 16 to 26 foot truck. I wanted to get my structure down to a base rate (based off distance), cost for weight and maybe 1 or 2 additional charges if the delivery is taken inside the office building etc. Most LTL's from what I understand price with by distance, weight, class, whether its a residential or business, fuel charges, and then after that lift gate and inside delivery charges if needed. Sorry for the novel but if you have any additional input I would greatly appreciate it, thanks in advance.
     
  11. Big Don

    Big Don "Old Fart"

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    Let me touch on inside residential delivery here, briefly. We handled a lot of appliances that were sold in some store, and drop shipped direct from the factory or warehouse. Many times, the unethical salesmen in these stores would not only promise inside delivery, but set up as well.
    Then when we would deliver, naturally the receiver expected service that we were not able to supply. In fact, our company would not even let us enter a residence. We could put it in the garage, or by a door. But we were absolutely not to go inside a residence.
    I guess there were to many claims about interior damage to their houses from "careless drivers."

    Another thing we were prohibited from doing, was stairs. Residential or commercial, it didn't matter. We did not go up or down stairs to make pickups or deliveries. I believe it was a worker's compensation thing.
     
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