If you’re a freight broker, you probably utter one or more of the above phrases daily. The variability of LTL shipments is a constant challenge. From changes due to cargo specs to unexpected accessorial fees, and the complexities of freight classification, many factors can take you by surprise, disrupt your operations, and lead to costly errors. Errors waste your team’s time and harm your relationships with customers and carriers. Even worse, errors eat away at your profits when you aren’t prepared to handle surprises.
The unpredictable nature of LTL shipping is the foundation of Tai’s second pillar of LTL profitability. Without integrated checks and balances in your daily workflows, costly errors and frequent rebilling can quickly erode your margins, impacting overall profitability.
Tai TMS helps brokers like you avoid these pitfalls by providing digital tools that alert you to potential errors before they happen. Tai streamlines your LTL booking process, saving you time on rebills, minimizing the number of claims you’ll need to handle, and cutting your overhead costs. Our customers have reduced their billing disputes by 35%! Read on to see how.
Rating Engine
According to C.H. Robinson, carriers hold all the pricing power right now because there is an undersupply of LTL carriers. Rates are on the upswing and expected to continue rising for the foreseeable future.
The keys to offering your customers the best rates are:
- Having comprehensive and competitive carrier contracts (tariffs) to ensure variety and good pricing.
- Building powerful digital carrier integrations that provide accurate transit times, service, and liability options.
Your LTL carrier tariffs outline your negotiated linehaul rates and charges for one carrier. It’s the legal framework that governs the broker-carrier relationship. These negotiated rates will eliminate some of those surprises you encounter in the LTL world.
Yet, strong tariffs are only part of the optimization equation. To effectively reduce errors and rebills, you must also use your TMS to the best of its capabilities. This includes integrating all carrier contracts and rate agreements into your TMS to ensure accurate and up-to-date pricing and availability. If your TMS doesn’t support these integrations, your team will have to spend time and resources researching other sources.
Powered by the Tariff Wizard, Tai’s Rating Engine provides API integrations that allow instant access to every LTL base, accessorial rate, and fuel surcharge, all displayed on one dashboard. Even better, each tariff automatically tailors your margin to your customer. This real-time comparison data helps your team quote accurate rates with better margins. It also allows customers who prefer a DIY option to access this dashboard and receive real-time and precise quotes.
Yet, shipping rates are only one source of confusion in LTL shipping. There’s also the risk of errors when assigning freight classes. Let’s look at that next.
Class Calculator
LTL carriers use a combination of factors to determine the price of a shipment. They start with your negotiated base rate determined by the weight and volume of the shipment. The rate increases as the shipment size and weight grows.
In addition, carriers factor in the freight class of shipped products. Every commodity has both a freight class and an NMFC code. Freight class represents the category of the shipped items.
NMFC codes relate to specific commodities within each freight class. These codes are meant to ensure consistency in how shipments are priced. Yet, in reality, they can make things more confusing for inexperienced shippers and brokers.
When you improperly assign a class code to a shipment, your carrier will need to reclassify it and potentially change the negotiated shipping rate. They’ll also charge your customer a reclassification fee. Improper classification can also cause delays and mishandling, resulting in costly damage claims. These are those “Oh no!” moments that you should avoid whenever possible.
Tai’s class calculator makes categorizing a shipment almost foolproof. Enter the shipment details into an order, and you’ll instantly know the correct freight class. If you enter an incorrect class into an order, Tai will flag it as incorrect and offer the proper alternative. Tai will also save the class designation for each shipment in the load record. It’ll be available for subsequent customer loads. With fewer errors, your team can focus on delivering excellent customer service and stabilizing your margins.
Accessorial Pricing Tool
One 2023 study reported that the average cost per LTL shipment for accessorials was more than $419. For some of the largest LTL shipping companies, this meant about $2.3 million in accessorial fees in 2023. This astronomical amount rises each time a shipment incurs unexpected fees due to errors.
Identifying and pricing accessorials based on each load and carrier agreement can be complex and confusing. You might not know if your shipment requires a liftgate or inside delivery, and sometimes carriers are unable or unwilling to provide certain services.
Tai TMS makes it easier by integrating with Shiplify, a pricing tool that identifies accessorials using the exact shipping class, load weight and dimensions, and destination location information. For example, you’ll view the destination location on a map, enabling you to visually verify whether your load needs a liftgate or other extra service.
How accurate is Tai’s Accessorial Pricing Tool? Our customers report that Tai helps them price accessorials with 99.5% accuracy.
Unexpected charges are miserable for everyone, including your finance/accounting team. Make every dollar count. The last way to enhance profitability by reducing the LTL surprise factor is to leverage the power of partnerships.
Tai Marketplace
Working with a fellow broker (formally known as co-brokering) can be useful for new and growing LTL brokers. A co-brokering deal with an established LTL broker can kickstart your entrance into the LTL space. It saves you the time and cost of building the infrastructure you need to be successful.
Partnering with established LTL brokers can substantially expand your network of carriers. You can also access more competitive rates by tapping into the partner broker’s relationships with carriers. In addition, leveraging another broker’s expertise or resources can improve your overall customer service.
Yet, finding reputable and trustworthy partners can be risky. These risks primarily stem from communication breakdowns, service inconsistencies, and unforeseen costs.
Tai’s Marketplace is a one-of-a-kind platform that connects you to established LTL brokers who want to work with you. Every broker is a vetted Tai customer. Through the Marketplace, you’ll have the buying power of an LTL broker without the headcount or the investment. You’ll find the best partner for every LTL load without the headaches and inconsistencies of the open LTL market.
Surprises are Inevitable
In life, you may love surprises. But in LTL, surprises are often a huge pain. From unpredictable accessorial fees to classification errors and co-brokering risks, the variability of LTL can be challenging. But they don’t have to derail your business. With Tai TMS, you can minimize surprises, streamline processes, and grow your bottom line.