Time to check your LTL pricing knowledge
Wise executives are stepping up to improve the performance ability of their people through programs like this, and they will serve the domestic and international supply chain profession very well.
I attended the formal kick-off of the online-live “hybrid” seminar held by SMC3 and the Logistics Training Center on the subject of LTL pricing and costing last month.
Students work through the course materials at their own pace and supplement that work with a chance to see and hear from successful industry role models on Zoom discussing the practicalities of moving LTL. SMC3 has announced a schedule for other courses to be offered as “live” in addition to a self-paced version of courses toward a certification in LTL.
The pricing and costing course is eight modules, presenting both a shipper and carrier perspective on the nuts-and-bolts that make up the complex world of LTL classification, rating and pricing along with discounts, FAK and as-weight formulas. And if you don’t know the definition of these terms, you may want to consider attending yourself or signing up a member of your team. As we’re finding, many shippers these days are without technical knowledge in this growing area of responsibility.
In fact, new shippers and former truckload-only distributors have found that they need to gain an understanding of how the 80-year-old classification and rating system for packages and pallets of products works in order to figure out what areas they can save money on.
As we’re seeing, e-commerce has resulted in a boom in LTL shipping both to consumers and small businesses. Both shippers and carriers are hiring new people or moving operational people into buying or selling roles at shipper and carrier organizations and educating those people has been largely a one-to-one mentoring exercise, often taking months.
Many of the young people I see in these roles have learned a narrow part of the transportation function—just enough to get their daily tasks done. They lack a broader foundation and knowledge of options that would raise their effectiveness and empower their career acceleration. Online education, with practical examples, correct terms, and access to industry experts makes for a better, more valuable professional transportation analyst, salesperson or executive.
SMC3 member company executives appear to be “all in” for helping develop the transportation specialist career path. There have been over a dozen executives involved so far in these programs and the development of the course materials. I myself have been involved in the development effort and feel that the programs are a chance to give back to the industry after 40+ years of making a living in logistics.
Questions addressed by the panelists included dimensional pricing, dynamic pricing, internal carrier costs and ways shippers can reduce carrier expenses. A key message from a recent Zoom call with more than 60 participants was that carriers are measuring everything from the apparent level of sophistication of the shipper, to the time it takes to get loaded, to the accuracy of product descriptions. These factors and more influence the recognition of cost-to-serve and quality assessment of the shipper as a desired customer.
To quote someone for a year-long contract, carriers need to control risk; and education on the carrier and shipper sides of the deal reduces that risk. Wise executives are stepping up to improve the performance ability of their people through programs like this, and they will serve the domestic and international supply chain profession very well.
