Don't Raise Rates

Don't Raise Rates

Copyright 2002, Traffic World Magazine

Your Sept. 9 article "End of a Long Proud Run" and some others I have read recently mention that LTL rates will increase up to 15 percent because of one less large carrier. I disagree with this except for maybe those shippers that used CF. The other LTL carriers already took their rate increases for the year and I see no reason for them to take an earlier increase. LTL carriers should be analyzing the freight they haul and offering discounts based on various freight characteristics so they make money. If they have a money-losing account and no strategic reason to keep them, let another carrier have them.

Assuming this, they should not be raising the rates. If there are a number of new potential shippers and the existing carriers do not have the capacity to haul them, the carriers need to react by increasing capacity. In most cases, I doubt they were at full capacity before CF filed Chapter 11.

I am one shipper that will react strongly against carriers that try to raise their rates significantly just because of CF, and I feel most will agree with me. I suspect if capacity issues get tight and the economic law of supply and demand dictates prices should go up, I can see the rates going up slowly from their current rate of increases but not by the 10 to 15 percent numbers you mentioned, at least not in the short term.

Jerry Hahn

Traffic & Warehouse Manager

DCI Marketing