December 11, 2014
Column | big picture

Farewell, class rates?

As carriers seek to shift their customers away from the traditional freight classification system, many shippers are resisting the change. That's ironic, because shippers have complained loudly for decades about the way the classifications are developed.

By Peter Bradley

The way businesses practice logistics has undergone dramatic change in the past generation. A combination of deregulation, technological innovation, globalization (and its antithesis, reshoring), the growth of third-party services, and more has led to substantial shifts in the way businesses do just about everything in the management of their supply chains, from sourcing to managing returns.

Thus, I'm always at least mildly surprised when an artifact of old ways of doing business reappears. It continues to occur, though. I've just read a story by Executive Editor Mark Solomon on the freight classification system that has for decades provided a baseline tool for determining rates for less-than-truckload (LTL) shipments. Solomon outlines the effort by many carriers to shift their customers away from that complex system to one that makes use of shipments' density and actual dimensions—a pricing approach long used (and now expanded) by parcel carriers. As Solomon explains in his story, it's a shift that LTL carriers believe would give them better and more accurate information on customers' shipments than the classification system and would also, not incidentally, improve yields.

Many shippers are resisting the change, which is ironic, because shippers have complained loudly for decades about the way the classifications are developed. It would seem to me that simplified and accurate measures should benefit both parties and would do nothing to undermine shippers' negotiating clout. That's being lost not to technology, but an economic law far older than the freight classification system—the law of supply and demand.

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Once again, we are seeking nominees for our annual Rainmakers award. Each year, DC Velocity recognizes 10 to 12 individuals who combine a record of professional success and significant contributions to the logistics profession. The process for nominating someone to be a Rainmaker is simple. Send me an e-mail with the name of the nominee and a 50-100 word description of why the nominee merits consideration for this distinction. Include the nominee's company, job title, and contact info (phone number and e-mail address). We seek nominees who are directly responsible for logistics, material handling, supply chain, or distribution management as well as consulting, academic, vendor, and association professionals who have in some way distinguished themselves from the crowd.

We will pass on the nominees to our editorial advisory board for selection of the 2015 award recipients. That group's job has become more difficult with each passing year as the number of highly qualified nominees continues to grow.

We will recognize the 2015 recipients in our July issue.

About the Author

Peter Bradley
Editor Emeritus
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.

More articles by Peter Bradley

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