Configuring Tiered Rating

Tiered rating allows you to adjust shipment costs up or down at certain thresholds, essentially penalizing or rewarding carriers based on workload.

For example, you may penalize shipments over a certain limit with an extra charge or premium but you can force the loads to be given to a certain carrier. For example, there is a daily contract to provide 10 trucks. If there is a requirement one day for 12 trucks, there will be an extra charge for procuring the additional equipment, but it is possible.

Similarly, a reduction can be provided for additional traffic. Instead of using a refund, the rate would be adjusted on the shipment. For example, there is a daily contract for 3 small loads in a day. This leaves some with time remaining. If there is need for a fourth load, the rate could be discounted since the equipment is available and not in use.

Tiered rating differs from rate unit based profiles. Tiered rating looks across shipments for penalizing or awarding price breaks; rate unit break profiles are within a shipment.

Tiered rating is not designed to optimize carrier selection during daily bulk plans, rather it is intended to manage tiers historically. Only when shipments are planned individually can tiered rating be done in real time.

If using tiered rates which have small increments, note that the tiered rating functionality is not designed to handle simultaneous building of shipments. It is intended for modeling discounts based on larger time periods and tiers, such as having a 10% discount for more than 200 shipments in a quarter.

Configuring Tiered Rating

1. Select a rate offering with a rate offering type such as TL-Tiered, that allows tiered rating. This is done by assigning a rate attribute ID of "Tiered Rating" to the rate offering type.
2. Define a time period.
3. Associate the time period to the rate record or rate offering.
4. Define the rate using a cost with a condition that uses a tiered rate basis item.

Applying Tiered Rates to Shipments

1. Optionally, set the RATING ENGINE ALWAYS CALCULATES TIERED RATES parameter to TRUE. When you set the parameter to TRUE, this instructs the rating engine to simulate tiered rating for the shipment if it has not been recorded to its time slot already.
2. If you want shipments to automatically record the shipment within its tiered historical time period, create an automation agent that uses the Record Shipment for Tiered Rating agent action.
3. If you want to manually record this shipment in the historical time period, run the Record Shipment for Tiered Rating action on selected shipments.

Note: All rates with a Tier Level or Accessorials with a Tier Level will be invisible to standard rate inquiries. This is because conditions must be specified.

You can see historical data on a rate record by using the Rate Record SmartLink "View Tiered Rating Historical Time Periods".

You can view the rates charged to the shipments by looking at the Total Actual Cost on the shipment.