SMC³ has announced that its General Rate Committee (GRC) has approved an overall rate increase of 6.1%, to become effective on June 7, 2004.
At its March 3, 2004, public GRC meeting, SMC³ presented the results of specific economic data collected from its carrier members, the LTL (less-than-truckload) industry and other data sources used in developing SMC³’s Carrier Cost Index (CCI). Following this presentation and an open discussion, a motion was adopted to docket a proposal to increase rates and charges in all SMC³ Tariffs having application on Interstate and/or Foreign commerce.
On April 14, SMC³ held a public GRC hearing, attended by carriers, shippers and other members of the transportation community, in Atlanta. At that time the increase was approved as docketed.
“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,” said Jack E. 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 fourth quarter, 2003 average operating ratio parallels that of first quarter, 2002, when the U.S. economy was deep in recession.
The integral factor in formulating the annual GRI is SMC³’s Carrier Cost Index. The CCI accurately reflects the market basket of products and services consumed by LTL carriers in their operations. Because motor carrier costs involve numerous inputs that are unique to the motor carrier industry and the actual carrier involved, SMC³ pioneered and developed the CCI in 1999 to more accurately quantify the increased labor, labor-related and non-labor expenses in a carrier’s operations. This assists carrier efforts to obtain adequate revenue, thereby enabling the carrier to continue operations, attract capital and serve the shipping community.
For more information about the General Rate Increase, visit www.smc3.com/gri