The problem is further compounded by the growing
These developments will continue to shift heavier LTL shipments into lighter and minimum charge shipments. The classification system used by the LTL industry has opened the door for parcel carriers to capture this niche with attractive pricing, improved delivery options and better information systems. New technology has made certain products obsolete Compact discs have replaced larger and heavier LPs, for example. For example, the weight of televisions, video cassette recorders, and desktop computers has been reduced by several pounds in the past few years.
Many LTL carriers are reporting drop in tonnage per shipment and revenue per shipment. The implications for LTL trucking are profound, particularly with respect to that industrys traditional pricing methods. According to and estimates published by Alex Brown & Sons, LTL market share of nonlocal trucking dropped from 10. 0 to 7. 3 while the parcel industry increased more dramatically from 5. 6 billion to 19 billion. Satish Jindel is the principal of SJ Consulting Group, Inc.
Published Articles LTLParcel Competition Puts Pressure on LTL PricingTransport Topics 15, 1996by Satish Jindel In the early UPS limits were pounds and inches in combined length and girth. Satish Jindel is the principal of SJ Consulting Group, Inc. The minimum charge pricing approach of the LTL industry has opened the door for parcel carriers to capture this niche with attractive pricing, improved delivery options and better information systems. Freight is getting lighter and more compact thanks to use of lighter materials aluminum, fiberglass, and graphite instead of iron and steel and miniaturization.
However, these shipments are generally of higher value and thus more service sensitive segment of the LTL market. While some economists believe that this will reverse with improvement in the economy, other factors which will keep the trend going Growing emphasis on justintime and quick response inventory and distribution management systems, which results in smaller, more frequent shipments.
Too many shipments are priced on FAK freight all kinds basis, further hurting the classification process, which depends on such data base. Contact Us SJC Brochure Overview Published Articles LTLParcel Competition Puts Pressure on LTL PricingTransport Topics 15, 1996by Satish Jindel In the early UPS limits were pounds and inches in combined length and girth. Hence, they can support higher price if accompanied with savings in total supply chain management process. Satish Jindel is the principal of SJ Consulting Group, Inc.