SMC3 plans to raise LTL rates by 6.1%

SMC3 plans to raise LTL rates by 6.1%

The Southern Motor Carriers Rate Conference Inc. (SMC3) ( plans a general rate increase of 6.1%, to become effective on June 7, 2004. The increase was approved by SMC3's general rate committee.

“Our analysis of member carriers' 2003 overall operating results indicates that these and other carriers are still conducting business at a higher operating ratio than that which is acceptable for healthy growth,” says Jack Middleton, president and CEO of SMC3.

The average reported operating ratio in 2003 was nearly 3% above the industry's established standard for an effective operating ratio. SMC3's historical data of member carriers' operating results indicate that the Q4 2003 average operating ratio parallels that of Q1 2002, when the U.S. economy was in recession.

The integral factor in formulating the general rate increase is SMC3's Carrier Cost Index, which reflects products and services consumed by less-than-truckload (LTL) carriers in their operations. Because motor carrier costs involve numerous inputs that are unique to the industry and the actual carrier involved, SMC3 developed the CCI five years ago to quantify the increased labor, labor-related and non-labor expenses in a carrier's operations.

The rate increase followed public hearings attended by carriers, shippers and other members of the transportation community. LT

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May, 2004

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