Old Dominion Freight Line (NASDAQ: ODFL) is the most recent less-than-truckload carrier to implement a general rate increase (GRI). The carrier announced Thursday a 4.9% hike to rates under various class codes effective Jan. 3. The GRI will start two months ahead of a similar increase it installed earlier in 2021.
Less-than-truckload carriers typically issue GRIs annually to account for cost inflation throughout the network. The increases are applied to general tariff codes not under contract and vary by lane and shipment type. The stated percentage increase is an average of the overall impact the rate changes will have.
“This GRI will affect our class tariffs and is intended to partially offset the rising costs of real estate, new equipment, technology investments and competitive employee wage and benefit packages,” Todd Polen, VP of pricing services, stated in a press release.
Some of Old Dominion’s customers will also see “a nominal increase in minimum charges with respect to intrastate, interstate and cross-border lanes.”
Robust freight volumes and capacity tightness throughout trucking markets have allowed LTL carriers to drive yields higher. Many are using the favorable backdrop to find freight that better fits the network and carries higher margins. The yield initiatives have been evidenced in recent GRI announcements, which are rolling in earlier than the normal and at higher amounts than the first-quarter 2021 increases of 5% to 6%.
FedEx Freight (NYSE: FDX) customers will see a 5.9% GRI beginning Jan. 3 across most zones. The company will also implement a “no shipment tendered” surcharge “when a pickup is performed and no shipment is tendered to the carrier” on Jan. 17.
Forward Air (NASDAQ: FWRD) announced a 7.9% GRI but it won’t take effect until Feb. 1.
Old Dominion recently reported a continuation of strong growth trends through the first two months of the fourth quarter. Daily revenue increased 30% year-over-year in November, following a 36% jump in October. Tonnage was up 16% in October and 12% in November with yields nearly 17% higher in both months.
“At Old Dominion, we are committed to delivering our premium value proposition of on-time, claims-free service at a fair price,” Polen continued. “To satisfy our customers’ expectations and deliver on the promises we have made, we must continue to enhance our high-quality service network and systems.”
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