Over the years, pricing and freight payment has changed dramatically and gotten much more complex. Initially, carriers loved the idea of pricing by five-digit zip code, or by specific city-state combinations. However, maintaining those records and updating systems over time becomes problematic. It leads to errors when Mr. Manual gets involved.
Carriers have improved their position in the “LTL grocery store” by reweighing freight, dimensioning, and adding the appropriate accessorial charges. What all of this leads to – and the Mastio & Company scores for all carriers show—the LTL industry generally does poorly with the freight payment process and billing their customers correctly. I cannot imagine a shipper out there that doesn’t have an invoicing horror story. Chances are, you will end up in a collections battle at some point for various reasons.
The carrier industry has unintentionally created the cottage industry of freight payment due to the industry’s poor billing practices. I know first-hand about this. I started 35 years ago with a freight payment and auditing company and was always amazed at the overcharges I found for customers.
Clearly, getting the bill-of-lading information sent to the carrier electronically would solve a nice chunk of this problem, but it won’t fix it completely. What needs to happen has already happened in both truckload and parcel. We believe that LTL is next. Your price needs to be like booking an airline flight online—you supply the correct address for pickup and delivery, the correct cube and weight, and the carrier will return to you a price that won’t change. At OD, we are testing this concept, called One Rate One Time™, on a small scale with a few shippers.
One rate, one time. No balance dues. The price you pay is the price you were quoted. No class required base rate, fuel surcharge, or accessorial charges. The only thing you will see is one all-in rate. But, here’s the catch: our expectation is all data must be correct, transmitted electronically, no paper, and we get paid upon delivery.
The revolution is coming, and Old Dominion is leading the charge. We’re excited about the future of freight payment and improving this process.