Increase in Demand for Parcel and Truck Carrier Pricing Analysis - Global Trade Magazine
  September 26th, 2016 | Written by

Increase in Demand for Parcel and Truck Carrier Pricing Analysis

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  • More businesses are turning to freight auditing experts.
  • Freight auditors use shippers data to analyze carrier proposals.
  • U.S. ecommerce sales rose to 8.1 percent of total retail sales in the second quarter of 2016.

National Traffic Service, a leader in the freight audit and payment industry, is experiencing an uptick in the number of businesses interested in their proposed carrier pricing analysis service.

While company officials cannot pinpoint the exact catalyst for the boost, it is likely linked to the growing role ecommerce plays in retail sales, as well as the complicated pricing system the shipping industry is known for.

“If you and I are shopping, say for a TV, we can easily compare the prices across various products, assuming that they all have the same screen size,” said Garry Oswald, National Traffic Service’s vice president of sales and marketing. “But parcel shipping rates, for example, are based on service levels, zones, fuel surcharge tables, accessorial charges, and numerous other factors. Besides the sheer number of variables, definitions of these charges are not always the same between carriers like FedEx and UPS.”

With all these moving parts, comparing one carrier’s rates to another is difficult for businesses to do on their own. However, freight auditing companies like National Traffic Service have the capabilities and expertise to match all the variables against a company’s specific shipping practices.

Proposed carrier pricing assessments use a business’s past shipping data, apply the rates in the proposed pricing agreement, and provide a company with the total amount it would have paid under the offered contract. With this number, companies can then assess how much they will save, if anything, with the new carrier.

Oswald stresses how important the analyses can be in decision-making because a great rate in one area doesn’t necessarily translate into huge savings for the businesses.

“A company may do mainly next-day or second-day shipping,” he said. “In this case, even if the proposed rates for ground service are excellent, it doesn’t benefit the shipper much. Applying the proposed pricing to actual shipping activity will reveal whether rates are truly beneficial to the company’s bottom line.”

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