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TRUCKING DEREGULATIONS * USA - A brave new world of pricing
The government's decision to lift the rate bureaus' antitrust immunity could open the way for new less-than-truckload pricing models. But it won't happen overnightNorth Attleboro,MA,USA -DC Velocity, by Peter Bradley -October 2007 issue: -- For less-than-truckload (LTL) shippers, 2007 has been a pretty good year. It's not just that they're enjoying more rate negotiating leverage than they've had in some time (thanks to a relatively soft economy). It's also that they received word this spring of an important and long-sought legal victory that could open the way to more motor carrier rate competition... In May, the federal Surface Transportation Board (STB) took one of the final steps in deregulating the trucking industry by ending antitrust immunity for the carrier rate bureaus and the committee that oversees the national freight classification system. Assuming it withstands a legal challenge, the ruling could have far-reaching effects on the industry, giving shippers greater influence in the classification system, stripping freight bureaus of collective ratemaking approval, and perhaps smoothing the way for carriers and shippers to explore new and less complex ways of pricing LTL freight... When it issued its decision, the STB said that it believed the time had come to open the motor carrier industry to the forces of market competition... Others are not so pleased by the ruling. Critics include the National Motor Freight Traffic Association (NMFTA), the parent organization of the National Classification Committee (NCC), which is one of the groups that will lose its antitrust immunity... Still, the prospect of setting prices without using freight classifications gives some truckers the jitters. "We would be worried about that going away," says Randy Mullett, vice president of government relations for Con-way Freight... In fact, Michael Regan, head of NASSTRAC's advocacy committee, expects to see changes in trucking pricing structures in the nottoo-distant future... Despite these potential advantages, nudging the industry to adopt new pricing models won't be easy. Just ask Yellow Freight (now Yellow Transportation). Back in 1995, the long-haul LTL carrier attempted to do just that. With some fanfare, Yellow Freight announced a simplified pricing plan. But the idea may have been ahead of its time. The effort promptly fell flat on its face... (Photo from: www.hickerphoto.com - "Yellowhead Highway" - A beautiful spring scene of Rocky Mountains, and lush green trees lining the road along the Yellowhead Highway in Alberta near Hinton, Canada)
Labels: deregulations
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