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July 3, 2023

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July 3, 2023 | Journal of Commerce 49 www.joc.com Surface Transportation "There are still a large number of shippers who prefer pre-negotiated or contracted pricing based on the way they procure LTL transporta- tion," he said. Logistics managers are facing relentless pressure to lower trans- portation costs after two years of soaring truckload and LTL rates and supply chain disruptions. That's cre- ating opportunities for carriers that can deploy dynamic pricing technol- ogy to keep their trailers running as full as possible, and for shippers to find savings. That's how ABF was able to increase its shipments per day 7.9% in the first quarter even as overall LTL volumes declined 9.1%. And according to ArcBest, con- tract LTL pricing continues to resist downward pressure from declining demand. "Pricing on core LTL-rated business, excluding fuel surcharges, increased by a percentage in the mid-single digits in May," the com- pany said. But it's not just the current mar- ket that is fueling dynamic pricing, according to Anderson. "We built our dynamic pricing offering with economic ups and downs and the ever-present potential for unexpected supply chain disrup- tions in mind," he said. "We imple- mented it prior to the pandemic, so we have seen usage of it in a wide range of market conditions." JOC email: bill.cassidy@spglobal.com twitter: @willbcassidy Even as larger customers reduce shipping volumes, ABF's dynamic pricing program "has been effective in optimizing revenue and managing to more consistent business levels by filling available capacity in our net- work during this weaker economic environment," ArcBest said in a June 12 report filed with the US Securities and Exchange Commission. "Profitable dynamic LTL-rates business drove shipment and ton- nage growth, which was offset by lower demand from core accounts," ArcBest said in the report. Dynamic pricing technology has been around for years, but it has been a hard sell for some LTL shippers, especially large companies moving high volumes of LTL freight. "The size and scope of customers using dynamic pricing varies," Den- nis Anderson, ArcBest chief strategy officer, told the Journal of Commerce. "It really centers around how they route their freight. Shippers that make individual shipment routing decisions are most likely to be users of dynamic LTL pricing," Anderson added. consistent with the first quarter of 2023 and our yield [revenue per hun- dredweight] continued to improve," Greg C. Gantt, president and CEO of the North Carolina-based company, said in a statement. Forward Air, an expedited LTL and truckload carrier, reported Tuesday the annualized decline in shipment volume is shrinking as the third quarter approaches. Forward's pounds per day dropped 9.4% year over year in April and 6.4% in May. "In June, we are continuing to see an increase in volumes," CEO Tom Schmitt said in a statement. Forward's revenue per ton mile excluding fuel surcharges increased 2.1% in April and May, even compared with a more robust freight economy a year ago. "However, even with some early signs of an improving freight environment, we believe the softer demand will continue to be a head- wind through the remainder of the second quarter," Schmitt said. More dynamic pricing The relatively firm LTL pricing and soft US freight market is creat- ing opportunities for greater use of dynamic pricing technology as ship- pers search for savings and carriers try to fill partially empty trailers. At ArcBest subsidiary ABF Freight System, for example, dynamic pricing contributed to a 2% year-over-year gain in shipments and tonnage in May while many compet- itors saw shipments decline by high- single-digit percentages. "The truckload guys have a spot market that creates a competitive dynamic that doesn't exist in LTL." Overall US LTL revenue per shipment rose 2.7% in Q1 2023 despite a 9.1% drop in shipments. CK Foto / Shutterstock.com

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