Shippers Association or Cooperative – Cut Your Freight Charges Along with Others

Posted On 11th March 2024

Shippers Association or Cooperative

When shippers bind themselves together to obtain pricing – essentially a freight buying group – they can multiply their individual bargaining power vis-à-vis the large LTL carriers (common carriers) such as FEDEX GROUND, ARKANSAS BEST FREIGHT (ABF), ESTES EXPRESS, XPO, XPO LOGISTICS, OLD DOMINION, AAA COOPER, T-FORCE, and the others.

Historically the shippers’ associations have been non-profit corporations – and obviously, from the fact that they do not dominate the commercial landscape, you can assume correctly that their success was mixed over the years.

The largest problem they had, historically, is that there was no incentive at the center with a “selfish gene” dedicated to keeping overhead down and the buying price continuously low. When rates were dropping, no one at the shipper association was as incentivized as the for-profit freight combines (3PLs, 4PLs) to aggressively insist on renegotiations, and when rates are rising no one at the shippers’ associations were as aggressive as the 3PLs and 4PLs at fighting and delaying those increases.

The result was the decline of LTL shippers’ associations, and the rise of 3PLs and 4PLs (aka freight brokers).

Today if you are a frequent shipper of goods you can get the Carriers you want, at the price you need via an aggressive 4PL especially, such as

By “frequent shipper of goods” that doesn’t require anymore that you are an actual shipper you could be a manufacturer’s rep, a salesperson who drops ships from various manufacturers, or an importer of goods who distributes to and from different warehouses, a super aggressive Purchasing Manager who wants to but all their incoming freight expenses, or a creative owner of a small startup who is shipping a cool new product directly to other businesses or directly to consumers.