SMC³’s General Rate Committee (GRC) has approved an overall rate increase of 3.25%, to become effective on April 3. SMC³ is a provider of data, technology and education as an integrated solution to the freight transportation community.
At its Jan. 25 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. 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 February 13, pursuant to SMC³’s notification to the public, a hearing was held in Atlanta that was attended by carriers, shippers and other members of the transportation community. At that time the proposed increase was discussed and subsequently approved at a reduced percentage than originally docketed.
GRC members attending the public hearing cited increased operating costs driven by insurance premiums, driver recruitment and security requirements as key factors attributing to the need for a rate increase. Other comments surrounded the escalating costs of facility and equipment purchases and/or rentals, as well as the operational disruptions caused by last year’s unusually severe hurricane season. While fuel costs continue to be a burden to carriers, these costs were not included as part of the GRI discussion because fuel is addressed separately in a surcharge.
The integral factor in formulating the annual GRI is SMC³’s Carrier Cost Index. The CCI 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 quantify the increased labor, labor-related and non-labor expenses in a carrier’s operations. The intent is to assist carrier efforts to obtain adequate revenue, thereby enabling the carrier to continue operations, attract capital and serve the shipping community.
SMC³ plans to release an executive summary detailing the cost drivers affecting the approved rate increase prior to the increase’s April 3 effective date.
