Multiple carrier rates will change the mode chosen for the movement of the freight. Generally, a full truck costs more than an LTL charge for a single shipment. However, with large mark LTL shipments, the crossover point of when an LTL shipment costs more than a full Truckload is dynamic. This crossover point is subject to the OD pair and the multiple LTL and Truckload carriers under consideration. The same characteristics can apply on the other end of the scale where the difference between a small package rate and an LTL rate is also dynamic, and the optimal solution will vary in the same way they do for large mark LTL. Transportation managers have generally dealt with this issue by adopting such rules of thumbs as; shipments under 150 lbs. are shipped on small package carriers, and shipments that take up half the trailer and are under 12,000 lbs. are shipped as LTL. Multi-carrier optimization eliminates this guesswork and, in real-time, compares all carrier modes and options in the selection of the optimal mode and carrier.
Below is an actual Example of 8,000 lbs. shipment going from Dulles VA to Atlanta, GA. The carrier selected in this case will determine the mode. Choosing between Carrier A and Carrier C would result in a truckload shipment. Selecting between Carrier B and Carrier D results in the shipment going LTL.
It is not enough to compare one LTL rate against a Truckload rate. Fourth-generation software needs to choose between multiple carrier rates.