Tariffs for less-than-truckload rules provide a framework for the carrier-shipper relationship, defining all the duties that a carrier will and will not perform for a specific shipment. The statements frequently include parameters and charges for commodity type, shipment characteristics, ancillary services, and duties performed at origin and destination, as well as information on claims, liability, and payments, among other things.
Most carriers’ websites have a comprehensive set of rules, but shippers frequently need help interpreting them or reviewing them accurately. This frequently results in the final pricing for a shipment differing from the original quote. To avoid some of the inherent pitfalls in the current process, some LTL carriers are making an effort better to highlight potential pricing and service exceptions up front.
“LTL rules tariffs have always been a separate rule set, or carrier terms and conditions.” Curtis Garrett, senior vice president at FreightPlus and founder and chief creative at Understand LTL, told FreightWaves, “It’s very reactive, somewhat disconnected from the actual LTL quoting process, but it’s very much governing how services are defined and how the carrier will be protected.”
The rules are intended to be general, but many agreements between carriers and shippers can be negotiated to provide additional details about duties and associated pricing. Liftgate usage at pickup and delivery, service to remote areas, residential drop-offs, and appointment-only deliveries can all be worked out ahead of time and priced appropriately.
Because the information is public, the way the rules are implemented is also a competitive differentiator among carriers. Most carriers attempt to set their fees in line with the rest of the industry, as no carrier wants to be the first or highest with an accessorial charge or the last or lowest.
“As carriers have become more adept at identifying costs due to trailer space, they have built-in more safeguards within the rules tariff,” Garrett explained. “However, as the rules tariff’s defining logic has advanced, the basic rating mechanism has become less connected.”
Shippers can price a load or obtain an application programming interface rate by visiting a carrier’s website. However, Garrett claims that these rates frequently come as a surprise.
“Instead of the true calculated, accurate rate, they receive the traditional price based on the base rates in play, the ZIP codes, the weight, and the class.” If they’re lucky, the carrier will send an alert stating that the shipment may be subject to a specific tariff rule. Others, however, do not.”
With more than 30 major LTL providers, most of which have variations in their respective rule sets and how they relay information, the likelihood of missing something is high.
Some carriers are attempting to improve their efforts to draw attention to the rules tariff, quantifying the terms, incorporating them into their web applications, and making them available via APIs. Garrett explained, “This makes them more definable and less opaque or interpretive.” “Eventually, all LTL rules tariff items will need to be in an ‘if this, then that’ format, taking into account all potential variables.”
As the industry transitions to smart contracts and Web3-type technologies, Garrett says he’s seeing more carriers put their tariffs in “digital, consumable formats — and with more customization specific to clients.”
“If they want to impact customer behavior proactively, there shouldn’t be a single bucket of reactive rules sitting in a PDF, buried on a carrier website.”
