It's belt-tightening time again for shippers. SMC 3 (www.smc3.com), the nation's largest rate bureau, has approved an general rate increase of 4.7% for its 125 less-than-truckload (LTL) carrier members. It could have been worse — SMC 3 originally recommended an increase of 5.5%.
Members of SMC3's general rate committee cited increased operating costs driven by insurance rates, labor needs and security requirements as key factors contributing to the need for a rate increase. They also mentioned legislative regulations such as the 2007 engine emissions requirements and changes to the way individual states handle toll increases. Since fuel costs are addressed in a surcharge, those costs were not included as justification for the rate increase.
"The sole purpose of this general rate increase, as always, is for the carriers to more nearly meet their revenue needs so they can work toward a healthy operating ratio and attract capital," says Jack Middleton, president and CEO of SMC3.
The general rate increase takes effect on May 2.