Old Dominion Freight Line Announces General Rate Increase and New ODFL 550 Base Tariff

Old Dominion Freight Line, Inc. announced two pricing initiatives that will be implemented effective November 30, 2015:

(i) a general rate increase (GRI) of 4.9% applicable to rates established under the existing ODFL 559 tariff, and

(ii) a new, “re-indexed” base tariff, the ODFL 550, which eliminates the fuel surcharge when the average U.S. Department of Energy (DOE) price of diesel fuel is under $3.00 per gallon.

Todd Polen, Old Dominion’s Vice President of Pricing stated “At Old Dominion, we are committed to delivering our superior value proposition of on-time, claims-free service at a fair price. In order to satisfy our customers’ expectations and deliver on the promises we have made, we must continue to enhance our high-quality service network and systems.”

“Our GRI will affect our ODFL 559 tariff and is intended to partially offset the rising costs of new equipment, real estate, technology investments, and competitive employee wage and benefit packages.”

“Although the GRI will impact each customer differently based on specific shipment lanes and distance traveled, it is consistent with our long-term yield management philosophy and the overall impact of the increase is expected to be 4.9 percent, the GRI also provides for a nominal increase in minimum charges with respect to intrastate, interstate and cross border lanes.”

Old Dominion Freight Line Rates

“Our yield management philosophy is to take a fair approach that minimizes the impact to our customers’ budgets while also supporting the value proposition that we promise to deliver each and every day,” continued Mr. Polen.

“Therefore, we have listened to our customers and developed a new ODFL 550 base tariff that we expect will make it easier for customers to utilize our services. The ODFL 550 tariff is a re-indexed tariff option that is designed to simplify rate estimates through the elimination of a traditional fuel surcharge until such time as the price of diesel fuel reaches the average DOE price of $3.00 per gallon.”

“The new ODFL 550 tariff will allow shippers to provide their customers with freight quotes without the frustration of estimating fuel cost as long as the average price of diesel fuel remains under $3.00 per gallon.”

“For those customers who prefer their existing pricing format our existing class tariff, the ODFL 559, will still be available. For any customer who would like to explore a new base tariff option, however, we are excited to work with them on the ODFL 550.”

Related: Where Are Diesel Fuel Prices Headed in the USA?