Over the past two decades major changes have occurred in the structure and business practices of transportation consumers (shippers) and providers (carriers). Shippers and carriers have experienced many evolutionary steps in how they negotiate LTL pricing, make individual shipment transaction decisions and implement these processes effectively throughout the technological, administrative and financial systems of the business enterprise. These changes impact many aspects and attributes of the requirements of an effective LTL benchmark pricing standard for use by the transportation industry.
SMC³'s involvement in LTL pricing centers on dissemination of pricing data through modern information technology. Specialized research initiatives and feedback from industry interest groups, as well as SMC³'s internal technological expertise, contribute to the company's process of supplying superior data and technology tools to the marketplace.
CzarLite Base Pricing
Serving as a market-based price list derived from studies of LTL pricing on a regional, interregional, national and international basis, CzarLite provides transportation professionals with a single, common baseline from which to conduct business. Because of this, CzarLite has become an industry standard, and is utilized as a base rate for discounting by many prominent shippers from all segments of the economy.
While the larger shippers license CzarLite for their own use in LTL carrier relations, thousands of small shippers are able to aggregate their shipments through third party relationships into powerful purchasing potential, also using CzarLite as the base rate. In both cases, these shippers and intermediaries selected CzarLite only after a careful analysis and review of other alternatives, including individual carrier rates and other industry base rates.
Because it is an industry standard, LTL carriers have completely integrated CzarLite into their business and pricing systems and are able to price shipments with accuracy and consistency. Carriers who bid their services to shippers using CzarLite create a common language between themselves and the shipper, because the uncomplicated pricing system promotes a shared understanding of net rates. With pricing confusion eliminated, trust is built between the carrier and their shipper-customer.
Carrier Pricing Strategies
Carriers utilize discounts in the marketing, sales and pricing of their services to the shipping public. It is important to note that discounts on shipments are almost solely based upon the characteristics of the shipment and the frequency with which a shipper uses a particular carrier. As a rule, casual, infrequent shippers will experience a lower discount level than larger shippers with more attractive shipment frequency, density and freight characteristics. While some shippers will receive an across the board shipping discount, others might be offered varying discounts based on the individual lanes in which they move their goods.