White Paper: The Power of Data Accuracy in LTL Shipping

The final catalyst that caused another increase in re-rating was the COVID-19 capacity crunch of the early 2020s. In the opening months of the crisis, the stakes skyrocketed for how every cubic foot on a truck was allocated. While dimensioners and digital scales had been available for some time, they were suddenly put to far more consistent use. Similar to the way remote work and videoconferencing exploded during the initial phases of COVID, digital measurement tools and methodologies were the ideal technologies to meet the moment. Advanced systems including forklift-mounted scales and digital dimensioners were already in place at many carriers’ facilities, and density-based pricing was well-understood. 

“The availability and use of dimensioners has expanded massively in the last five years,” said the NMFTA's Peterson. “There are more and more of them out there, especially on the carriers’ docks, where companies have both the room to install them, and good reasons to use them.”

When COVID receded, advanced measurement technologies had become a permanent feature of the way the shipping industry does business and ensures safety. “The industry uses this technology for sound reasons: so we don’t overload our trailers and compromise safety,” said Old Dominion’s Polen. “We need to know what’s going on every truck as we build loads, so we don’t end up rolling out 2,000 pounds overweight, violating regulations, and putting people and freight at risk.”

For decades, shippers and carriers worked within wider margins of error out of necessity, due to the limitations of their measurement tools. Estimates were common, and often did not receive heavy scrutiny unless significant problems were encountered. In other words, there was a lot of “wiggle” in the system. However, thanks to the combined effect of digitization, improved measurement technology, and the pandemic capacity crunch, LTL freight abruptly became far more finely quantified, which resulted in a rise in the amount of freight being re-rated. 

Dusty Siemers, Logistics and Purchasing Manager for Bestorq, an industrial equipment supplier, saw this firsthand. “As much as 25 percent of our shipments were coming back with a re-weigh or re-classification,” he said. “Our accounting department flags any invoice that doesn’t match the original price, so I was looking into as many as 30 cases a month. It was a huge time drain. Accounting was frustrated. Finance was upset about extra costs. The issues sometimes escalated all the way up to our owners.”

Douglas Dynamics, a manufacturer and upfitter of work truck attachments and equipment, got a shock when they implemented a transportation management system (TMS). “Before the new system was in place, we had no idea how much we were being re-rated,” said their Logistics Manager, Brian Walton. “We were shocked to find that around 25 percent of our shipments had excessive length, incorrect weight, or incorrect classification.”

All of these issues come down to a single core cause: carriers had been planning for a certain size, weight, or class of load but picked up something that didn’t match those specifications. In the age of precision, what might seem like small discrepancies—underestimating a dimension by even an inch or two—can add up when building out a linehaul trailer with mixed loads, causing freight not to fit as expected.

“It’s a simple but brutal truth,” says Old Dominion’s Plemmons. “If a piece can’t fit in the trailer, or the door can’t close, or our weight is too high, we can’t move the load. Whatever piece doesn’t fit is the one that’s going to be left behind, go on another shipment, and possibly end up late. Nine times out of ten, that’s going to be the piece with the incorrect dimensions. Data accuracy isn’t just about avoiding fees, it has a direct effect on on-time deliveries.” 

KaTom, a restaurant supply company based in the Eastern U.S., found ways to improve data accuracy without investing in dimensioning equipment.

“For us, the lightbulb moment was seeing all of our shipping data in one place,” said their Senior Distribution Center Manager, Sunny Knight.  “It allowed us to look at our freight spend holistically, see heat maps, understand exactly where our items were moving and with what frequency.”

The resulting insights revealed that they could save a significant amount on shipping by pooling their West Coast-bound shipments into multiple full drop trailers per week to OD’s Salt Lake City distribution center. From there, OD broke down the shipments and moved them to their final destinations via LTL.

“The final result was faster transit times with a 30% reduction in overall cost,” said Knight. “It was an entirely different way to think about how we move goods. The more accurate data we have, the more potential efficiencies we can find.”

Beyond simply avoiding unanticipated fees, collecting better data and improving accuracy carries a host of additional benefits. In particular, shipping costs become far more predictable, making financial or cost projections more accurate. When the price of a significant portion of outbound shipments changes between booking and invoicing, it creates additional work for accounting and finance departments. In many organizations, the person making carrier selection or shipping decisions is wholly unaware that these costs are being incurred. In any case, unpredictable charges on a business’s balance sheet can have a negative impact on strategy and planning.

“Predictability is incredibly important in my line of work,” said Bestorq’s Siemers. “It makes all the difference if we know that when we ship a certain amount of product, it’s going to reliably cost a certain amount of money.”

Employee time is another precious resource that’s at stake. “Reviewing just one invoice can take 10 or 15 minutes,” said Gary Schaefer, a Solutions Specialist at Old Dominion Freight Line. “Then, there’s all the overhead of flagging the bill, passing it around through different departments, and deciding how to respond. That’s clerical time when those employees could be doing other things for our customers. When these discrepancies come in regularly, it ends up draining productivity across multiple departments.”

“Starting the shipping process with accurate data does three things,” says the NMFTA’s Keith Peterson. “First, when there are accurate dimensions and weight, carriers can make sure they have the right people and equipment for the pickup. Second, it reduces re-weighs and re-classifications. Finally, it’s a huge opportunity for shippers to examine what their handling units look like, and whether they’re preparing their units for shipping optimally.”

“By the time your carrier re-rates you, it’s too late,” says Old Dominion’s Plemmons. “You often get a cascade of adjustments on the back end that ripple through multiple departments, from finance, to accounts payable, all the way to the C-Suite. Getting shipping data as accurate as possible on the front end solves these problems before they start.”

Providing accurate shipping data benefits both shippers and carriers. When carriers know exactly what they’re hauling, they can do load planning more confidently and allocate resources more effectively. This creates better, more predictable results for shippers from on-time performance to elimination of unexpected charges. The overall result is greater transparency, and better overall relationships.

“When you send out 100 perfect shipments in a row that don’t require re-rates, it changes the conversation with carriers, and everything becomes more collaborative,” said Douglas Dynamics’s Walton of his experiences before and after implementing a data accuracy overhaul. “That efficiency helps the entire system. The relationship works much better when it’s a two-way street. We end up finding solutions together that benefit both of us.”

Accuracy concerns also extend to consignees. Inaccurate shipping data can cause delays, which may impact on-time, in-full (OTIF) requirements or other agreements. Honoring these agreements not only avoids fines, it allows retailers to manage inventory more precisely, which can result in better vendor scorecard metrics and improved relationships with shippers. “If you’re trying to hit a narrow window with your freight, it’s absolutely critical that you get your data accurate at the front of the process,” says Old Dominion’s Plemmons.

“A rise in initial data accuracy translates into a rise in efficiency across the system,” says Old Dominion’s Polen. “That lets us serve the customer better because we can do more direct loads, with more predictability and less freight handling, all of which translates to less chance of damage, faster transit times, and reduced costs. That ends up back in our customer discussions about the overall cost of their shipping.”

Improving freight data accuracy creates a wide range of positive effects. While the initial goal might be to reduce unexpected costs by eliminating re-weighs and re-classifications, getting these things right also reduces overall costs and improves revenue predictability. Relationships with carriers become more simple, stable, and transparent, allowing carriers to operate more efficiently. Finally, shipper-consignee relationships improve as performance and accuracy improves. Ultimately, businesses find they are able to offer customers better service overall, driving repeat business and building stronger relationships into the future.

At Douglas Dynamics, the experience of going deep on data accuracy had positive effects that went beyond the balance sheet. “The re-rates were the biggest cost impact we were having, but all the data we’re collecting also gives us an advantage in negotiating rates, and collaborating with carriers," said Walton. "We know so much more about our freight now, that the discussions with carriers can go to an entirely different place. We want to be a shipper of choice, and having a precise handle on our data is one of the best ways to get us there.”

“We were able to eliminate extra fees entirely, which boosted our revenue predictability,” said ULINE’s Bartko. “That in turn improved our budgeting and financial planning accuracy, and allowed us to continue to deliver outstanding customer service. Upgrading our data processes had benefits that went far beyond shipping.”

“We love working with shippers who know their data,” says Skip Velardo, Vice President of Transportation at Old Dominion Freight Line. “The more accurate they are, the more prescriptive they can be. That allows us to plan out routes farther ahead, be predictive—potentially even modifying or creating routes where we know there is going to be demand. It helps us, it helps them, and moves us toward a place of true partnership.”