Meaning
Basic transport fees charged for moving freight between two primary terminals or distribution hubs constitute the core of commercial shipping expenses. These line haul rates cover the distance-based portion of the trip, excluding pickup and delivery. They are usually negotiated as a price per mile or a flat rate per truckload.
They do not apply to accessorial or terminal fees.
Base Pricing
Shipper contracts establish fixed price structures for anticipated freight volumes. Negotiating competitive line haul rates allows manufacturing companies to forecast long-distance shipping costs with high precision. These rates form the baseline from which total landed cost is calculated.
High-volume lanes typically attract deeper discounts from major carriers. Fluctuations in shipment volume can shift these rates to spot market pricing, affecting profit margins on core corridors.
Route Efficiency
Intermodal transfer points and hub-and-spoke systems depend on scheduled long-distance moves. Optimizing the flow of goods across these lanes helps in securing lower line haul rates from freight providers. Carriers offer better pricing when they are guaranteed consistent, year-round volume.
This reduces their empty-mile exposure.
Contract Annex
Distribution agreements must detail the geographical boundaries and pricing tiers of transport services. The pricing annex of the contract lists the line haul rates for each origin-destination pair. This annex prevents disputes about non-standard routes.
It represents the legally binding pricing structure for the duration of the agreement.
