What is LTL Point-to-Point Pricing?
Point-to-point pricing entails the negotiation of LTL rates tailored to particular lanes or routes connecting two designated points. Unlike traditional reliance on published tariffs, this approach involves shippers and carriers collaborating to set rates based on the distinct attributes of the shipment and route. Embracing point-to-point pricing provides enhanced flexibility and the possibility of reduced rates, especially for high-volume, high freight class freight or recurrent shipments between specific destinations.
Real Life Point-to-Point LTL Example:
In the case of a shipper located in Syracuse, NY, with recurring weekly orders to Philadelphia, PA, and typically shipping 2-4 pallets of freight, this would indeed be an ideal scenario for utilizing point-to-point pricing. Since the shipping route between Syracuse and Philadelphia is consistent and recurring, negotiating a specific rate for this lane can provide both the shipper and the carrier with greater efficiency and cost-effectiveness.
For example, let's say Company XYZ in Syracuse, NY, regularly ships 2-4 pallets of goods to a distribution center in Philadelphia, PA, every week. Instead of relying on standard tariff rates or density-based pricing, Company XYZ could negotiate a fixed rate per shipment specifically for the Syracuse to Philadelphia route with TLI (Transportation Logistics, Inc.). This negotiated rate would take into account factors such as distance, frequency of shipments, and the consistent volume of freight.
Point-to-Point Benefit
By utilizing point-to-point pricing for this recurring lane, TLI can establish a mutually beneficial arrangement for shipper and carrier that provides cost predictability, streamlined operations, and discounted rates compared to ad-hoc or non-contracted shipments. This demonstrates the suitability and advantage of point-to-point pricing for consistent freight movements between specific locations.
What's the Point?
Point-to-point pricing is particularly effective for accommodating irregularly shaped pallets, high freight class freight, and shippers with very frequent recurring LTL lanes. This
LTL pricing model offers flexibility and tailored rates based on the unique characteristics of the shipment and the lane, making it well-suited for such scenarios.
