Dynamic pricing is heading LTL’s way — or is it?

Anyone who has booked an airline ticket online has interacted with a model known as “dynamic pricing.” Put simply, it’s the process by which airlines adjust fares, often on a moment’s notice, to reflect real-time changes in supply-and-demand conditions.

The less-than-truckload industry, hardly a first mover in information technology, is slowly but inexorably moving in that direction as well. For LTL, the shift is a big deal.

For generations, LTL pricing has been a static phenomenon. It has taken two forms: One is direct base rate pricing typically between large shippers and their carriers. The other is what is called “blanket” pricing, in which carriers load pricing matrices into third-party logistics providers’ TMSs. Those prices are then offered to small-to-midsize businesses (SMBs) that engage with carriers through their 3PL provider partners. Both models reflect pricing schemes that don’t change frequently.