The Cons of Parcel Hundredweight (CWT) Programs

Freight Cowboy — Fri, 19 Apr 2019 10:00:52 +0000

Considering the various factors that must be reviewed before determining the best freight shipping program, it’s likely that you become stuck choosing between parcel hundredweight (CWT) and Less-Than-TruckLoad (LTL) programs. While CWT programs can be quite advantageous, they also have a few cons to remember.

Are you torn between freight shipping programs? Here’s what you need to know!
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What Are the Disadvantages of CWT Programs?

Whether you’re shipping small packages or a shipment weighing hundreds of pounds, you should be contemplating the shipping costs including fuel surcharges. You must also evaluate the technology for rating and routing, the loading or unloading dock (for large shipments), the staging area, and more.

Determining the Best Cost/Transit Time
Carrier Prices & Negotiation
Less Competition

1) Determining the Best Cost/Transit Route

One of the biggest hindrances of CWT programs is being able to decide the best cost/transit routing decision. It may require state-of-the-art software to compare CWT pricing and transit, not only in relation to CWT vs LTL but also CWT pricing in relation to your present parcel pricing program. In many cases, LTL transit time can not only compete with parcel CWT transit times, but they can also actually deliver your shipment quicker.

Pro Tip: Consider using modern programs to compare CWT pricing and transit.

2) Carrier Prices & Negotiation

If you’re not accustomed to CWT pricing and the various moving parts of how the rates are constructed, many shippers may feel at a disadvantage when shown pricing from the carrier. Like any transportation pricing, the majority of the elements are open to negotiation. Areas of negotiation would include the following: discounts, commodity tiers, minimum package charges, FSC differential, accessorials, etc. CWT pricing is just as negotiable as your regular parcel and LTL pricing.

3) Less Competition

Unless multi-sourcing your usual parcel business, it’s probable that the shipper only has one option for CWT pricing. Less competition is never great. While most shippers have multiple LTL carriers to choose from in relation to price and transit.

Conclusion

Shipping CWT has many pros, but like anything else, parcel hundredweight service also has a few cons. It’s necessary to weigh the pros and cons of both CWT and LTL shipments. We will be reviewing the pros and cons of LTL programs in the coming weeks. Check in for the latest article!

Interested in learning more about parcel hundredweight CWT programs? Join the conversation to speak with our logistics experts, today!