LTL GRI – Tightening Capacity – It’s Still a Market Rules Game

Posted by Ward TLC - Wednesday, July 10th, 2013 at 12:11 am


money-ratesMost carriers continue to move forward with their mid- year GRI’s, business as usual.  It has been indicated by many industry professionals that tightening capacity and rate discipline are helping to support improved carrier returns.There is still much work to be done to support raising costs and aging fleets and to motivate a seemingly disinterested next generation to join the carrier side of the industry.

Are GRIs still needed?

The fact of the matter is that GRIs are needed to aid in recovery of the continued increasing costs of equipment, health care, insurance, compliance of government guides as well as upgrading what has now become older technology, fleets and facilities. While many still say that tightening capacity is contributing to higher rates, that is debatable. Carrier pricing discipline is contributing to higher rates and each market served remains unique based on competition and “local” strength of the economy.

Carriers still need to find the freight that best suits the needs of their systems to maximize cube, capacities and needed efficiency. While a slow growing and still relatively unsettled economy is better than where we have come from the past 5-6 years the overriding market conditions still drive the pricing. A carrier needs to know their market, tie that to their needs and then search out those customers that can best fit the capacities of their network. While utilizing price to fill needs still has its place, it is the understanding of freight mix, capacity and the ability to negotiate a fair price for service that provides the adequate return that will push the industry to a more stable financial future.That financial stability drives the ability of the carrier to re-invest in its physical assets but a sometimes overlooked yet as important factor is the ability to attract the up and coming work force to want to participate in “all aspects of the business”.

Good people are essential

Yes, there is a definite need to attract new drivers because the freight doesn’t move without them, but there are many other critical jobs that are performed daily on the docks and in the offices of carriers that are equally important to the success of the industry. While many people focus on the technology of the carriers, shippers, and TPL’s as the answer for progress and improvement, all of that technology is useless without a well-run operation which is still driven by people; a point that is often overlooked by many.

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