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Dalor Logistics, Inc.
6005 West Ryan Road
Franklin, WI 53132
(414) 421-8900
(414) 435-3127 - FAX
 

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Volume Pricing
Volume pricing is a service which an increasing number of freight logistics providers make available to customers who wish to find freight solutions at cost-effective prices. It is usually offered as an extension of a less-than-load (LTL) freight distribution service. LTL freight distribution is most often provided on the basis of a standard tariff-based price system, but these systems are nearly always restricted to freight size parameters which define how much freight can go into a single motor truck shipment and do so by the weight of the freight shipments in question. In effect a logistics provider than supplies, organizes and/or runs freight motor vehicles used for the consolidation of LTL freight shipments will dictate limits for what can and can’t go into the trucks.

This limit is often defined by the scope of the logistics provider’s organization and varies according to the distance the provider will transport freight, the means by which they will do so, and the sort of customers their business model targets. The limits are not based on an absolute calculation of volume or weight capacity of motor trucking vehicles, but often on a projection of expected total required capability for a particular freight lane. Since LTL freight carriers operate on the premise of routine mixed freight loads running prescribed lanes between breakbulk hubs, their success depends on their ability to run motor freight truck fleets economically and routinely – and the gains in reliability and economy of scale are the main advantages which these logistic providers pass on to their customers and use to attract new customers.

However the by-volume pricing of freight is the next ‘grade’ pricing method which LTL freight carriers often offer; the rates are done on a spot-quote basis, accounting for not only the weight but also the physical dimensions of the freight load. Usually a volume pricing quote given to a company will also factor in several different aspects of the logistics provider’s own business, such as the amount of space they have on motor freight vehicles presently travelling the route to the breakbulk hub local to the client’s freight’s desired destination. As a general rule, logistics providers will offer by-volume pricing for any freight shipment that takes up more than five pallet spots, and which weights in excess of 7000 lbs. However, these standards can vary from one logistics provider to another. In cases when large amounts of LTL freight are being sent long-distance by such a provider, it is not uncommon for them to contract a full truckload freight carrier and make use of their motor trucking resources for the ‘middle step’ of a journey (i.e. between their own breakbulk hubs). This situation is made more common by demand for larger freight loads, and it is this sort of demand that usually merits by-volume price quotes – so it is not uncommon for freight transport subcontracting to be another factor in the size of those quotes.
 
 


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