Fourth Generation Optimization considers variances in accessorial charges

 Like line haul charges, accessorial costs vary depending on the carrier’s pricing strategy.  An example of how accessorials can impact truckload routing is stop charges.  Truckload carriers have different sensitivity to the number of stops they are willing to make in route, which is reflected in stop charges, not necessarily in line haul rates.  Frequently carriers have a lower rate; they generally have a greater sensitivity to making additional stops and thus have high stop charges.  Conversely, carriers with a higher rate may be more willing to make multiple stops, as reflected in lower stop charges. Fourth Generation optimization will balance the tradeoff between lower rates with fewer stops against a carrier with a higher rate with lower stop charges. Using a single set of rates and stop charges does not allow an optimizer to calculate this tradeoff and thus passes up the opportunity for significant cost saving.  Accessorial differences are equally relevant in LTL carrier selection – with often dramatic differences in charges for things like inside delivery, appointments, COD charges, and so on.

Tom Livernash

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