GTS Blog

How to Mitigate the Costs of General Rate Increases

Posted by Ascent Global Logistics on Apr 1, 2017 1:00:00 PM

GRI season is upon us. With many of the major LTL carriers already announcing their
numbers, it looks like September will bring increases in the range of 4-6%. What can you do to prepare and possibly mitigate the costs of general rate increases?

Acalculator.jpg general rate increase (GRI) is made by LTL carriers on average once a year. These increases are based on the carrier’s base rate with adjustments for the increasing cost of labor, equipment, operations and more. The percentage of the rate increases are tied to the lanes, weight classes, and weight breaks.

Keep in mind that if a carrier announces a rate increase of 4.5% it doesn’t mean that all of the lanes will be affected with the same increase. Rates in high demand lanes can be hit with more than double the increase; this means that the impact on your bottom line can be 15% rather than the announced 4.5%. That’s why it’s important to be aware of each lane you utilize for the impact on costs.

There are ways you can mitigate the costs of a GRI.

Improve Your Packaging

Proper packaging and downsizing on space will not only minimize freight damage but also lower your cost of shipping. Cutting out the filler and air from packaging will lead to more dense freight. The lower freight class means a lower freight cost. Check out some top freight packaging tips on our blog.

Choose the Right Mode and Transit Time

If you see your rates increase, it may be time to evaluate the modes and transit times you are utilizing. If you have been shipping one mode for your freight consistently, consider looking into the alternatives. Larger shipments may be less expensive to ship with a dedicated truckload, or smaller LTL may benefit from small parcel shipping.

Consider saving money by choosing longer transit times. There may be a desire to deliver your product quickly, but cost effective economy carriers can add savings if you don’t have a tight deadline. If possible, ship earlier so you can utilize lower cost transit times without missing delivery deadlines.

Utilize 3PL Services

3PL companies often have carrier negotiation experience and group buying power, both of which can mitigate the costs of GRIs. A good 3PL has valued added services that can save your SMB time, labor and money. You will have access to a transportation management system (TMS) and experienced professionals to help guide your shipping decisions. Read more about how 3PLs can mitigate the cost of GRIs on our blog.

 Being aware of upcoming GRIs is beneficial for a SMB. Partner with GTS and take control of your shipping rates. Visit to learn more about our transportation management solutions.

Topics: Cut Costs, General Rate Increses, GRI