Calculating LTL rates manually can be an agonizingly long process. As your customer waits on the phone, your dispatcher must check class, weight, accessorials, and fuel surcharges. Manually toting up an LTL rating is slow, prone to errors, and inconsistent. And one dispatcher’s calculation is not always the same as the next. Many logistics and trucking companies have witnessed these holdups first hand. But the good news is LTL rating software can shave minutes off every quote and keep your customers happy at the same time.
The Real Cost of Manual LTL Rating
Manual LTL rating might be the way things have always been done, but it’s costing you more than you think. First, it’s time consuming to manually cross reference the shipment’s place of origin, destination, and weight against a spreadsheet of carrier rate tables to find the appropriate base rate.
Second, if you’re shipping through the United States, you’ll have to determine the correct National Motor Freight Classification (NMFC) code for the commodity you’re shipping to accurately calculate how much the shipment costs.
Third, you’ll have to calculate all the extra charges, including liftgate service, residential delivery, or inside delivery.
And, then there’s the additional fuel surcharge percentage, which is easy to get wrong as diesel fuel costs bounce all over the place.
Each of these steps have risks associated with them.
- Human error: If your calculation includes the wrong class or misses an accessorial, you risk over or under charging your customers.
- Slow quote turnaround: While your customers wait, you risk losing a deal to your competition.
- Inconsistent pricing: Different dispatchers may rate the shipment differently, meaning you risk inconsistent margins.
- Wasted labor: While your staff spends hours on repetitive look ups, they could instead be doing higher value work.
LTL pricing automation can help you quickly reduce the time it takes to calculate costs for your customers, improve your consistency, and give your dispatchers time back to do premium work.
What Is LTL Rating Software & How Does It Work?
LTL rating software is software that automatically calculates freight rates using carrier-specific rate tables, classification data, and rules, instead of manual look ups.
How it works:
- Shipment details are entered (origin, destination, weight, class, commodity)
- The system pulls the correct rate base and applies the right tariff and/or discount structure
- Accessorials, fuel surcharges, and minimums are calculated automatically
- A finished rate is generated in seconds
When it’s integrated with your TMS, rate calculation software connects core features your LTL operation needs like dispatch, billing and customer quoting. This means no more double data entry, which saves you time and money.
The Power of Automated Freight Rating for Accuracy
Using automated freight rating software means more reliable rate quotes to your customers and more consistency throughout your business. Instead of guesswork, your dispatchers will be able to create quotes with the correct class rate, the correct discount tier, and the correct accessorial charges applied every time.
As a result, you’ll reduce the time spent resolving billing dispute and rate audients from customers and brokers. Every dispatcher on every shift provides the same accurate rate.
LTL Pricing Automation: Getting Quotes Out Faster
Rating is time consuming, but moving to an automated system means improving the ability to quote quickly. That means you’ll improve your time to close out and bill your shipments. LTL pricing automation means quotes will go out in seconds, rather than getting stuck in a lengthy series of manual calculations.
Speeding up your rating has multiple benefits:
- Faster sales cycle: You can win business before a competitor responds
- Less back-and-forth to confirm pricing
- Reduced administrative bottleneck during high-volume periods
When you process hundreds of shipments per week, saving a few minutes per quote will add up quickly.
Rate Calculation Software and the Bottom Line
Trucking companies are in a volume business. As you add up time savings, you will be able to see improved margins. Accurate, automated rate calculation software protects your margins four ways:
- Prevents underpricing that quietly erodes profit
- Prevents overpricing that drives customers away
- Reduces labor cost spent on manual rating tasks
- Supports better data for negotiating with shippers/brokers because you know your real cost-to-serve
Automated rating helps your business scale, while manual rating slows you down.
–> Read our blog about how to calculate TMS ROI.
How to Make the Switch to Automated Rating
When you decide you’re ready to automate your manual processes and make the move to LTL rating software, you can follow the easy steps below:
- Audit your current rate tables: ensure you have clean data so you can deliver clean rates
- Choose software that integrates with your TMS: You won’t enjoy the full range of benefits if you constantly enter data from one system to another
- Train your team: Automation works best when staff trust and understand it
- Start with your highest-volume lanes or customers: Start with your highest volume lanes or customers to prove the value of the system before you roll it out fully
- Review and adjust regularly: Rates, fuel surcharges, and accessorials change; keep your system updated to reap the biggest benefits
Conclusion
Manually rating costs LTL carriers time, money, and accuracy. Automation can help you address all three issues. Carriers that adopt automated rating have the advantage: faster quoting, more accurate pricing, and the ability to scale without adding headcount.
Want to see how automated LTL rating works inside a modern TMS? Request a demo and we’ll show you what fast, accurate pricing looks like for your operation.
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