Background: A leading 4PL logistics provider specialized in US-Domestic Less-Than-Truckload (LTL) shipping, faced a significant challenge with their rate formats. They needed to convert complex Czarlite carrier rates into customer demanding formats like Per KG weight break pricing, Per W/M rates, Per CBM rates etc..

The reason was, many of their customers were looking for pre-agreed LTL rates in an RFP/RFQ format for their inland moves. .

For US export & import, shipper get a pre-agreed rate, mostly in an excel file. Similarly for US inland moves they were also looking for a pre-agreed rate in an RFP/RFQ.

Challenges :
This was a weird scenario and logistics market so far haven’t explored the opportunity to use Per KG, Per LB, Per w/m pre-agreed rates for US Domestic inland moves.

Quite obviously our customer had no exposure to crack this challenge and hence they were missing out this additional business. For years they have been ignoring this opportunity due to lack of expertise in converting Czarlite rates in their customer demanding formats in an RFP/RFQ. Other noticeable difficulties were…

• Use of Czarlite rates: Our customer carrier mix contained many US National, Regional and Local carriers. But none of them had rates in Per W/M, Per KG, Per Pound, Per CBM etc.
• Use of least cost carrier rate: Being a 4PL, our customer had procured many National, Regional and Local Carrier rates but this brokerage business mainly works based on Least cost rating. Shippers/Freight forwarders quote their shipments in TMS and they get the least cost rate that 4PL use to ship the shipments. So, it was not possible to get any pre-agreed set of Sell rates in formats like Per KG Weight break pricing, Per w/m pricing, Per CTW weight break pricing and many more.
• Error-Prone Processes: Another big concern was regarding the accuracy of the rates. It was important to design the rates but the more important part was to maintain the accuracy of the rates and make it profitable.

Solution :
Srinath Transportation Solution stepped in with its analytical expertise and started converting rates into our client demanding formats. Our method was to get our Customer’s Buy rates (National, Regional & Local carrier rates) and then reengineer them to various different formats... These formats include…

After using our reengineered rates, it was found that in real world our rates were accurate 90% of the time and overall, our rates generated a profit margin of 30-35%.

Also, this helped our customer to get more business and hence their overall shipment count increased at a great level.