Do Relationships Impact LTL Pricing Strategy?

Every year, many shipper-carrier negotiations and conversations involve pricing and what LTL costs will look like.

One of our OD Solutions Specialists came to me not long ago and asked me an important question as he was working to negotiate a pricing change. Do relationships matter when developing LTL pricing strategy?

Relationships absolutely do matter in pricing. At Old Dominion, we don’t view relationships with customers as transactional or tactical. It’s important that we become a true, long-term partner with the shipper and provide a service they can validate is worth our premium price.

OD values customers that we have a strong relationship with, have similar corporate values, pay their bills on time, and have a relationship that is built on trust. In short, building long-term business relationships matter as we approach our LTL pricing strategy.  

Many believe that the “right” price is one that maximizes company profits. That “right” price convinces the highest number of customers to buy for the highest price possible. That is, the sweet spot that balances sales and margins. Sounds great in opportunist terms, but that ignores the relationship question we value here at OD. Like all things, it requires you to look a little deeper and use a little nuanced thought. Sometimes a strong business relationship with your shipping partner is worth more than the numbers a pricing model returns to you.

At OD, we are focused on serving our customers, taking the time to understand your shipping needs and how your business operates. In my long career in this industry, the conversations around pricing typically work much more efficiently when the relationship with your shipping partner is built on trust.