What is CzarLite and How Does it Work?
Authored by SMC³ on July 6, 2021
So, what exactly is CzarLite, and why does your company need it? In a nutshell, SMC³’s CzarLite® LTL base rate provides a neutral rating standard that allows LTL shippers and 3PLs to quickly and accurately evaluate shipping rates from multiple carriers at a glance to help make informed carrier selection decisions—removing the unnecessary complexity that would otherwise accompany this process.
Simple, right? Not so much. This high-level answer likely brings to mind a whole host of follow -up questions, including why a neutral, standardized base rate matters? Or more importantly, how it can help improve your bottom line? That’s because the need for neutral LTL base rates is more important now than ever, due to substantial industry and demographic shifts over the last few decades.
To begin to understand why a neutral base rate is now critically essential, let’s start with some important background information. In 1990, three main carriers handled the majority of domestic freight movement in the United States, accounting for annual revenue of $13.7 billion. Now, three decades later, the big three has become a big 25—and growing—accounting for more than $38 billion in revenue each year. At the same time, populations across the country have exploded to create new urban centers and new shipping lanes that were nonexistent 30 years earlier.
This has rewritten the way carriers operate, and their freight prices reflect these operational changes. For starters, as new destinations, routes and freight specs enter the market, the rate base—or “list price” of freight charges—is no longer usually the price shippers actually pay for services. This is because carriers deliver discounts on top of this price to account for the variances in freight class, density, distance and other factors.
Another layer of complexity: each carrier works with their own base rate and these “list prices” vary across each carrier. This means understanding the true cost of working with an individual carrier requires complicated math to untangle base rates, freight discounts and other factors. This makes it difficult to compare carriers, and it often leads to billing discrepancies. Each time this happens, it usually means a better fit—and possibly a better cost—was left on the table.
To solve for these multipart issues, shippers and logistics service providers need standardized LTL pricing and a modern neutral base rate that accurately reflects current demographic profiles and domestic freight shipping activity.
This is where SMC³’s CzarLite fills a critical and growing need. Equipped with a wealth of pricing information from many of North America’s top carriers, CzarLite allows carriers to build their overall pricing offers for each shipper using a common starting point, allowing shippers and 3PLs to quickly understand the “true” price each carrier is offering and select carriers that are the best fit for their business. As a result, it also delivers valuable process savings that can help shippers and 3PLs streamline their operation, minimize the impact of carrier selection errors, and refocus on high growth opportunities.
With CzarLite base rates, shippers and 3PLs can:
- Quickly evaluate the impact of carrier rate adjustments, discounts and FAK classifications
- Benefit from the work of SMC³ data scientists who ensure the CzarLite rates reflect the most recent demographic and freight trends across North America
- Manage both classification-based and density-based shipment pricing to adapt to global business standards
- Easily access and integrate North America’s most widely used base rates into existing business systems and technology platforms
- Empower seamless cross-border pricing with solutions tailored for shipments between the U.S. and Mexico or Canada and within each country