DC Velocity - January 2015

BY MARK B. SOLOMON, SENIOR EDITOR

MOTOR FREIGHT

FOR NEARLY EIGHT DECADES, LESS-THAN-truckload (LTL) carriers have been giving away their trailer space. Not all of it, obviously. But enough to make a difference in their revenues and profits, and enough to have provided shippers with backdoor rate cuts that have kept on giving since Franklin D. Roosevelt was president.

Change doesn’t happen overnight in the hidebound LTL trade. But change is in the air, and it’s being driven by so-called dimensioning, or dimensionalizing, machines that precisely calculate the amount of space a shipment will occupy in a trailer. The machines allow the carrier to price its capacity based on the amount of space a shipment takes up, and not rely on a 78-year-old commodity classification formula that, over time, has robbed carriers of billions of dollars of legitimate revenue, often due to the carriers’ own missteps.

The machines measure a shipment’s dimensions—arrived at by multiplying length, width, and height—and provide proof of their calculations. A high-end “static” machine designed to measure stationary objects sells in the low to mid- $80,000s. The payoff can be rapid— 30 to 60 days, depending on how a carrier uses the machine and how it calculates return on investment (ROI), according to Jerry Stoll, market manager-Americas, transportation and logistics for Columbus, Ohio-based equipment maker Mettler-Toledo International Inc. Stoll said he’s seen strong demand from carriers looking to put new shippers who may never have been exposed to the classification-based rating system on space-occupied pricing right away.

Clark Skeen, president of CubiScan, a Farmington, Utah-based manufacturer of dimensioning systems, declined to give ROI data mainly because his customers are loath to give them. “I’ve been told that if they divulged details of the machines’ value, they’d fear we’d have to raise our prices on them,” he joked.

Old Dominion Freight Line Inc., a Thomasville, N.C.-based carrier, has used dimensioning equipment since 2009. By the end of 2014, YRC Worldwide Inc., based in

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The rise of dimensioning machines will make LTL trailer space allocation more efficient than ever. It will also eventually end shippers’ 80-year free rate ride.