You go out shopping one day and find a sale on a particular item that you have wanted for a long time. The item was originally $200 and is on sale for 75% off. You are ecstatic and make the purchase. You call your best fried to tell them about the amazing deal you just got. Then, the bomb drops…they just purchased the same thing from another store for 65% off, but their original price was $100 instead of $200. You received a larger discount, yet you paid more!
The same principle applies when purchasing transportation from a less-than-truckload (LTL) carrier…it pays to know what the “base” is for which the discount will be applied. Each LTL carrier has their own rate base and there are also some generic rate bases. They all typically take what is known as a general rate increase, or GRI, annually. The current rate base will obviously have higher rates over a rate base from five years ago. With the variances in rate bases from carrier to carrier, and with annual changes, it is imperative that you ask, “75% off what”?