API (Application Program Interface) rating with LTL common carriers is quickly becoming the standard method to perform rate requests for LTL shipments. It is refreshing that LTL common carriers have started to embrace API technology to give their customers more options to connect and utilize their services, but it is also important to understand the Pros and Cons for this upcoming technology when it comes to LTL rating. Here are a few Pros and Cons to consider before deciding to no longer build your LTL freight contracts in house.
- No Tariff Building or Maintenance: Not every freight brokerage has the experience or resources to build and maintain their own freight contracts, so pulling rates directly from the carrier is very time effective. Avoiding the headache of creating and updating a 4,000 lane specific LTL tariff with high cost delivery areas will save you more than a few hours of your day.
- Updated Weekly Fuel Surcharges: No more building and updating fuel tables for each of your LTL carriers. More importantly no one has to be responsible for updating multiple weekly fuel surcharge averages for the week.
- No Additional Licensing Fees: Freight brokers can save money by using a carrier’s rating API by avoiding any annual product licensing fees and one time setup fees for carrier base rates. New carrier base rates are sometimes required to be purchased yearly if the carrier is unwilling to extend their discount on an older base rate.
- No Audit Visibility: By using a carrier’s rating API, the freight broker no longer has an internal tool to audit their freight bills. They are 100% reliant on the carrier to provide accurate rates based on the freight contracts that was previously negotiated.
- Slower Rating Speeds: Reaching out to multiple carrier rating APIs can add more than a few seconds to populate the LTL rating results compared to 2 to 3 seconds it takes with a internal rating engine. Also if the carrier is having a problem with their API, the rates might not populate at all during a rate request without the user knowing unless the error specified by their Transportation Management System (TMS).
- Carrier Adoption of Technology: Most large national and regional carriers offer an open API for their customers to pull their LTL rates into their TMS, but there are still some smaller carriers who currently do not support the technology. There are also a couple of large national carriers that will not support API rate requests for blanket third party LTL rates.
If you would like more information on how our Freight Broker Software can help provide an all in one LTL solution (API and/or Tariffs) for all your rating needs, please email me at [email protected] or call 877-261-4004 x130.