Every year, shippers with "the same deal" as last year find their LTL costs went up anyway. Nothing was renegotiated. The discount on the pricing agreement did not move. The cause is usually a General Rate Increase, and it is one of the most misunderstood mechanics in LTL pricing.
What a GRI is
A General Rate Increase is a periodic increase to a carrier's published base-rate structure. Carriers typically announce it as an average percentage and apply it about once a year, though timing and frequency vary by carrier and by year. The actual change is not uniform. It can differ by lane, by freight class, and by weight tier.
Why your cost rises when your discount did not change
Most shippers do not pay the published tariff. They pay a negotiated discount off that tariff. If your agreement is a flat discount percentage, which is the most common structure, a GRI raises the published base and the same discount is then applied to a bigger number.
A simple illustration: a base charge of $1,000 at a 70% discount nets $300. If the base on that lane and class rises 6% to $1,060, the same 70% discount nets $318. Your discount is identical. Your cost is 6% higher.
This is normal under a standard tariff-discount agreement. It is also why comparing discount percentages tells you little, a point covered in how LTL rates are calculated.
The average is not your increase
Carriers generally announce a GRI in advance, commonly 30 to 60 days, with an effective date and an overall average percentage. That average is a headline. Carriers can apply the increase unevenly across the rate table, so the increase on the lanes, classes, and weight tiers you actually ship can be well above or below it.
The question to ask is not whether your discount changed. It usually has not. Ask how much the underlying tariff moved for your freight.
How to plan around a GRI
- Request the detailed rate-table changes, not only the average, and model them against your last 12 months of shipments. That gives you your effective increase.
- Time renewals and negotiations to the carrier's GRI cycle. Negotiating before an increase is a stronger position than reacting after it takes effect.
- Use the GRI as leverage. Carriers are often more willing to improve a discount schedule shortly before or after a GRI to keep volume through the change.
- Budget for an annual increase. Treat it as a standing assumption in your freight forecast, not a surprise.
What to check on your invoices afterward
After the effective date, compare a few like-for-like shipments from before and after: same lane, same class, similar weight. The difference in the discounted linehaul is your real increase. Remember that the fuel surcharge is usually a percentage of that linehaul, so a higher base also means more fuel dollars even when the fuel percentage is flat.