SMC' announced that its General Rate Committee (GRC) has approved an overall rate increase of 3.5%, to become effective on April 2.
At its Dec. 13 public GRC meeting, SMC' 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 SMC' tariffs having application on interstate and/or foreign commerce.
Pursuant to SMC''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 lower percentage than was originally docketed at the Dec. 13 meeting.
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. While fuel costs continue to be a concern 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 SMC''s Carrier Cost Index (CCI). The CCI accurately 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, SMC' pioneered and developed the CCI in 1999 to more accurately quantify the increased labor, labor-related and non-labor expenses in a carrier's operations. This assists carrier efforts to obtain adequate revenue, thereby enabling the carrier to continue operations, attract capital and serve the shipping community.
SMC' meets the needs of the transportation industry by delivering pricing expertise that supports the shipping public while helping carriers target a reasonable economic operating environment. SMC''s data, technology and educational initiatives deliver the company's pricing expertise to more than 1,500 carrier and shipper members as well as thousands of customers throughout the United States, Canada and Mexico.
SMC' plans to release an executive summary detailing the cost drivers affecting the approved rate increase prior to the increase's April 2 effective date. For more information on the SMC' General Rate Committee, go to www.smc3.com/gri.
