| Re: How to model TL and LTL rates based on zip codes
Hi OTMRookie,
About your question for the rate service; it all depends on how sensitive your requirements are for the transit times. If simulated travel times work well for you for both shipment types and do not impact your business, I would go down that path but if you need a higher level of accuracy I would use a lookup approach for each lane and type.
In simulation you can have OTM calculate the transit time based on the distance and an average speed per distance range and in my experience, it works very well with TL shipments especially when you have multi-stop shipments.
But it might not work as well for Intermodal and LTL shipments, since the location of the terminals and the service areas, and service type are other factors in the transit time and it changes depending on the carrier. To solve this we uploaded the transit time for every lane for most of our LTL carriers. But this has a cost; it is a time consuming task, it is hard to collect this information from the carriers and it needs some degree of maintenance.
About the distance, it also depends on your level of accuracy required. When you use estimated distances, OTM uses the latitude and longitude of the locations to calculate the distance and of course, the estimated distance is not going to be accurate.
Since your TL rates have a per mile basis it is very likely that you may need to use an external rating engine that matches the one used by your carriers in their ratings.
Hope this is useful,
Alejandro B.  |