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Module F – Freight Management – Tariffs, Rates and Customer Discounts

Copyright 2000 DPS Software Systems, Inc., 924 E. Green St., Pasadena, CA 91106

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Module F – Freight Management – Tariffs, Rates, &Customer Discounts

Purpose:

This purpose of this manual is to help the user understand how the automaticrating system in alphaTRUCK Version 2.0 functions and how all of the relateddatabase files need to be set up to make it work. At its conclusion, the readershould be able to setup and maintain all of the tables (data files) in the ratingsystem and be able to enter and update customer discounts.

Introduction:

In this age of “anything goes” pricing, the flexibility of the alphaTRUCK automaticrating system provides a comprehensive solution for meeting the requirement ofall of the common and most of the unusual pricing requests that can be receivedfrom sales personnel or customers. Some of the features of the system includethe following:

• Multiple Traffic Types• Automatic Assignment of Default Tariff by State Lane (CA to OR, WA to

OR, etc.)• Multi-Level “rate per hundred/minimum charges” rate tables• California Intrastate Central Coastal Surcharge (CCS) and LA metro rate

support• Percent discounts (multiple per level if required, different by weight break)• Percent surcharges (multiple per level if required, different by weight

break), with master ON/OFF switch• Flexible descriptions for percent discounts or surcharges• Custom tariff with odd weight break thresholds• Custom rate base methods & tables• Built-in support for most major tariff bureaus• Flexible freight class codes• FAK Rates (no class required)• Piece-rated capability• Discounts setup by customer• Master/Slave customer discount setup vs. Master Customer file or

specials file• Rate quote printing, archiving, and retrieval• Automatic interline division of revenue by various methods• Automatic calculation of agent revenue by various methods

Most of the programs that will be used for setting up the files required for ratingare “Standard File Maintenance Programs” or SFMP. An SFMP allows records



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in a database file to be added, changed, deleted, scanned, queried (select & sort,find feature), listed, or printed. Please refer to the alphaTRUCK Standard FileMaintenance Program manual for information on how to use an SFMP.

Part I – Setting Up the Automatic Rating System

The setting up of the Automatic Rating System so that shipments can beautomatically rated involves seven major steps. These steps include thefollowing:

Step 1 – Define the TariffStep 2 – Define the LevelStep 3 – Define the Rate Base Method and Enter the Rate Base DataStep 4 – Define the Allowable Freight ClassesStep 5 – Other Issues (Rate Base Description, CCS, LA Metro, etc.)Step 6 – Enter the Rates – Class, Minimums, Discounts & OthersStep 7 – Setup Default Tariff Information or Customer profile as required

using the “Rating Parameter Set”

Each of these steps will be discussed below with an explanation of the requiredprocedures.

Step 1 – Define the Tariff

The first step in creating a rate table is to define the tariff. This definitionspecifies how the rate table is configured in terms of the number of weightbreaks, the rate base lookup method, and other issues. This is accomplishedusing the Tariff Information Standard File Maintenance Program to add or modifyrecords in file FR-TAR (TARFIL). This program is accessed from the MasterMenu by selecting: 1, 3, 8, 2.

Most tariffs provide for class rates and minimum charges. The alphaTRUCKsystem requires that a tariff record be created for both the class rates and theminimums. The reason for this is to provide additional flexibility in the applicationof discounts or other rate level considerations. The example used in thisdocument will be to create the tariffs required to rate using the Rocky Mountain583 tariff. The following screen example shows the record required for the“class” rates of this tariff. The tariff code has been assigned the value of RC.This is an arbitrary choice, but, within the confines of a two-character code,should try to relate to the actual tariff in some way if possible. This tariff code isthe “key” to the Tariff Information file.

Fields 1 to 4 are for identification purposes only and are not used by the ratingsystem.



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Field 5 defines the number of freight classes that have been defined for this tariff.A smaller number means a slight performance gain in final freight chargescalculations. However, in this age of super fast computers, this amount isnegligible.

Field 6 defines the number of weight breaks allowed. In the case of this tariff,there are nine (9) weight breaks: Any Quantity, 5C, 1M, 2M, 5M, 10M, 20M,30M, and 40M.

Field 7 tells the automatic rating routines if this is a class tariff or a minimumtariff, 1 for class, 2 for minimum, 3 for Percent Change, 4 for COD Fees, 5 forSplit Charges.

Field 8 defines the tariff code that can be used to lookup rate base information.Because rate base information is generally unique to a particular tariff publisher(i.e. Rocky Mountain vs. Middlewest, etc.) it is necessary when using multipletariffs to have multiple rate base tables. Since these tables are usually large, if acustom tariff is defined, it is useful if the rate base table of an existing tariff canbe used instead of having to create a different rate base table for the customtariff. This is the purpose of this field.

Field 9 defines the tariff code that can be used to lookup division of revenuefactors for interline and agent splits. This field functions in a manner similar tofield 8 above, but in this case, for division factors.



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Field 10 defines the tariff type code. This is a very important field because itdetermines how the system will attempt to compute the rate base. Among all ofthe issues related to automatic rating, rate base computation is perhaps the mostdifficult and the most different from one bureau’s tariff to another bureau’s tariff toa custom tariff. Some of the current choices in the alphaTRUCK system include:

• California Distance Table 8 (California Intrastate)• Rocky Mountain 583• MARS 500 (Middlewest Bureau)• Middlewest 550• Middlewest 551 prior to January 1, 1996• Middlewest 551 effective January 1, 1996• Pacific Inland Tariff Bureau• Destination Zip Code = Rate Base• Rate Base = 1• Domestic USA 3 Digit Zip to 3 Digit Zip• 1st 3 Digits of Zip = Rate Base• Czar Lite National Tariff• Flat Rate, California Intrastate, by Weight Category• Wisconsin Intrastate City Index• Washington State Intrastate, Sections 6 & 7• MDTA 500-B

Due to the advanced modular programming methods used to createalphaTRUCK Version 2.0, as new methods are required, they can be easilyadded.



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Field 11 defines the deficit weight rule that applies. There are only two choicesfor this field: R-Any amount and C-Minimum 500 pounds or ten percent of thetotal shipment weight. The latter is only used in California Intrastate shipments.

Field 12 sets a YES/NO flag as to whether or not ‘truckload’ freight classes areallowed. These are the freight classes below class 50, (i.e. 45, 37.5, 35, etc.).Most tariffs no longer use these freight classes but are still used by manyCalifornia Intrastate carriers.

Fields 13 and 14 set the units used for both ‘weight’ (pounds, kilograms, piece-rated, cube, lineal feet, miles) and ‘money’ (U.S. Dollars, Canadian Dollars,Mexican Peso). The default settings are ‘Pounds’ and ‘U. S. Dollars’.

Field 15 allows for the entry of a C.O.D. fee calculation method code. Thechoices are as follows:

• P – Normal per tariff schedule• F – Flat rate• M – Percent of COD Amount with minimum/maximum• N – Not Applicable

The default entry is “P”.

Field 16 sets a YES/NO flag that tells the system if this is a Metro/Drayage tariff.This is only used in the Los Angeles, California area for intrastate shipments.

Field 17 works in conjunction with Field 16 and defines how the systemdetermines if a shipment is eligible for the application of the Los Angeles Metrorates.

Field 18 works in conjunction with both fields 16 and 17 and defines the defaulttariff code for the applicable LA Metro rates.

Field 19 sets the number of zip code digits required to look up a division ofrevenue factor. If left at zero, the system will use 3, the D-83 default.

Fields 21 to 35 define the possible 15 weight breaks that a tariff can have. Enterthe actual value for the weight break (i.e. for a 5,000 pound weight break, enter5000). When entering weight breaks for a class tariff, weight break number one(1) should always be zero (0) for “any quantity”. However, when entering weightbreak number one for a minimum tariff, this field should be set to one (1). If not,a shipment with zero weight will be rated as a minimum charge.

Fields 36 to 50 define “LTL use.” Three entries are allowed in these fields, ‘Y’ for‘Yes’, ‘B’ for Both, and ‘N’ for ‘No’. If an active weight break has a flag set to ‘B’



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or ‘N’, it means that it can be used with “truckload” classes. A tariff that does notallow truckload classes should only have “Y” for the active weight breaks.

The following example shows the setup for a minimum tariff that would be usedwith Rocky Mountain 583 class rates.

Step 2 – Define the Level

The next step in creating a rate table is to define the level. The level is anarbitrary number that will be used to reference the “value” of rates for a particulartariff. Setting the level up is accomplished using the Rate Table LevelDescription File Maintenance program. This program is accessed from theMaster Menu by selecting 1, 3, 6. The screen for the program is shown in thenext example, with information for Level 1.



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This level description file is used to define both “rate per CWT” (class) tarifflevels, minimum tariff levels and percent change levels. Depending on what youare defining determines what information you need to enter in this screen. Fields1, 5, 9, and 13 provide the description for a Class tariff, Minimum tariff, Discountpercent or Surcharge percent, respectively. Fields 2, 6, 10, and 14 determinewhat descriptions print on the freight bill. If these flags are set to ‘Y’ for Yes, thedescription in fields 9 and 13 will be used. If the flags are set to ‘N’ for No, thedescription will be “composed” when the freight bill is printed based on theamount of the discount or the surcharge. The OK? And Misc. columns are fortraffic department use only and have no specific system function.

Step 3 – Define the Rate Base Method and Enter the Rate Base

The answer provided in Field 10 of the Tariff Information record (see example inStep 1, Define the Tariff, Pg. 110) will determine what is required to look up therate base. In the case of Rocky Mountain 583, two tables are required todetermine the rate base between an origin zip code and a destination zip code.The first of these tables is the “Base Point Postal Code by Actual Postal Code”table. This table will define for an actual zip code, the basing zip code thatshould be used to find the rate base and any increase factor that should beadded to get the correct value. See the following example for zip code 93715.



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To access the Master Rate Base Parameters File Maintenance program, fromthe Master Menu, select 1, 3, 8, 7.

In this case, zip code 97301 is the base zip, with an increase factor of 60. Afterthe base zip code is found for both the origin and destination zip codes, the nexttable that is used is the Rate Base by Tariff by Base Point Postal Code. Thistable contains the actual rate base that would apply between the two base points.This value would be increased by any factors that were found in the Base PointPostal Code by Actual Postal Code table. The rate base table is shown below.

To access the Rate Basis By Tariff File Maintenance program, from the MasterMenu, select 1, 3, 8, 6.



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For other types of tariffs, other rate base data must be entered in the file shownin the in the previous example. For example, if you want “zone” rates, where the“zone” is a letter (such as “A”) and the applicable zone is determined by 3 digitzips only, the entries in this file would consist of the origin 3-digit zip, thedestination 3-digit zip and a rate base of “A”. While this is a simple rate basemethod, some methods can get complicated. It is recommended that youcontact alphaTRUCK support for help in setting up rate base data.

Step 4 – Define the Allowable Freight Classes

The next step in the process of setting up a rate table, is to define to the systemall of the freight classes that will be allowed to be used with this tariff and theincrease factors (if any) that will also be needed. The SFMP for this file isaccessed from the Master Menu by selecting 1, 3, 8, 3. An example of thisscreen is shown below.

The key to this file is comprised of the tariff code and the actual freight class.The tariff code field is edited and must be a code that already exists in the tariffinformation file. The NMFC Class can be any 1 to 4-character string comprisedof numbers or letters. There are a few reserved codes, which must be in this fileto ensure certain features of the automatic rating system function properly.These reserved class codes are defined below:

CODF – COD FeePCCn – Percent Change – Class, where ‘n’ is in the range 1 to 9PCMn – Percent Change – Minimum, where ‘n’ is in the range 1 to 9MIN1 – Minimum Charge, Single ShipmentMIN2 – Minimum Charge, Multiple Shipments



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APPT – Appointment ChargeSPT1 – California Intrastate Split charges, 1 to 99 milesSPT2 – California Intrastate Split charges, 100 miles & up

Field 1 provides for a description of the class.

Field 2 is the freight class key component to the master rate table file. In thecase of Rocky Mountain 583, the tariff only provides for the class 50 rate.Therefore, the lookup rate process uses this class (CL 50) to read the rate tableand then modifies it by an increase factor (see fields 4, 5, and 6).

Field 3 is a rate system index and is used in the automatic rating routines tocontrol the accumulation of weights by each freight class on a freight bill. For acomplete set of freight classes for a given tariff, this index should begin with 1 forthe highest class and for each successive lower class be incremented by one.The maximum value of this index should be the value set in field 5 of the TariffInformation File (Pg. 109).

Fields 4, 5, & 6 contain the increase factors referenced in Field 2 above. Theuse of these factors depends on the tariff type code. In the case of Californiaintrastate rates, the only increase factor used is the one in Field 4. For this tariff,the increase factor is set to a value of one (1) for all classes except those overclass 100. For classes over 100, the factor is used to multiply the CL 100 rate toget to the over CL 100 (i.e. for CL 125 the factor would be 1.25). For RockyMountain 583, all three fields (4, 5, & 6) are used. Which increase factor to useis based on the first digit of the rate base. For example, a shipment with a ratebase of 20625 would use the increase factor found in Field 5 (increase factor 2).Other tariffs use other mechanisms for determining the increase factor.

Field 7 is a Yes/No flag that identifies a freight class as a “truckload” class.

Field 8 is an index that is used to print rate charts. The use of this field will bedeveloped further on a future release of the software.

Field 9 is a Yes/No flag that turns on the TAB display for this class.

If the tariff being set up requires a complex class increase factor methodologysimilar to Middlewest 550, setup records in the MWB Class Increase Factor file.This file can be accessed from the Master Menu by selecting 1, 3, 8, A, 2. In thiscase, the increase factors in this file are not used.



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Step 5 – Other Items (Rate Base Description, CCS Data, LAMetro, etc.)

There are several other database files that may or may not need to be updatedwhen adding a new tariff. These files include the following:

• Rate Base Description ( 1 3 8 5 )• California Central Coastal Surcharge ( 1 3 8 A 3 )• California Distance Table 8 Mileage (Not available)• Metro/Drayage Tariff Assignment (1 3 8 A 4 )• Middlewest Tariff Bureau Class Increase Factors ( 1 3 8 A 2 )• Middlewest Tariff Bureau Rate Base Cross Reference ( 1 3 8 9 )

The numbers in parenthesis represent the keystrokes required from the MasterMenu to get to the SFMP for the reference file.

Rate Base Descriptions File: The rate base descriptions file contains a recordfor each valid rate base value that a tariff requires. The purpose of thisdescription is for validation and “looping” purposes during the various rate entryprograms. The SFMP for this database file is reached from the Master Menu byselecting 1, 3, 8, 5.

California Central Coastal Surcharge File: If you have never heard of theCentral Coastal Surcharge, then you probably can skip this section. Thissurcharge applies only (or used to apply…most carriers don’t charge thisanymore since deregulation) on freight moving into or out of one of the centralcoastal counties as defined by the California Public Utilities Commission (whichas of 1997 no longer handles truck regulatory matters). Based on a weightindex, a flat charge would apply per shipment. To get to the SFMP for this file,select 1, 3, 8, A, 3 from the Master Menu.

California Distance Table 8 Mileage File: This file contains point-to-point milesfor 2,952 points in the state of California. It is used for California intrastate ratebase determination as first developed and used for the CPUC Tariff MRT-2(Minimum Rate Tariff 2). It is still used by most general commodity carriers asthe basis for rate application in the state. This is one of the few files that doesnot have company control and does not have a key. Its construction and layoutis a function of indexes in the range of 1 to 2,952, which are assigned toindividual cities in the Cities File (database ID of FC-CTY). Given two indexes, amathematical formula is used to find the correct record and field in a record to getthe mileage between the two indexes (and therefore between two cities).Although no menu selection is available to modify the contents of this file (noSFMP), the program FR2DT8 is available to the system super-user to executefrom the n/FR prompt if corrections or updates are required.



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Los Angeles Metropolitan Tariff Setup File: This is another “CaliforniaIntrastate” only required file. The LA Metro rates apply only to those pointslocated in the “Los Angeles Metropolitan Territory” as defined by the CaliforniaPublic Utilities Commission. This “territory” was established to provide shipperswhose freight moved within its boundaries reduced rates, which includedminimum charges up to a 1,000 pounds per shipment. Since the age ofderegulation, more and more carriers are abandoning the use LA Metro ratesdue to some of the confusing rules that traditionally have come with it and noware using simpler, more creative ways of providing customers with reduced ratesfor all traffic.

The main purpose of this file is to define to the automatic rating system, the classand minimum tariff ID’s for the LA Metro rates. To get to the SFMP for this file,select 1, 3, 8, A, 4 from the Master Menu.

Middlewest Tariff Bureau Class Increase Factors File (1, 3, 8, A, 2): The datain this file is used to apply increase factors to the “base rate” for various freightclasses for tariffs published by the Middlewest Tariff Bureau and also for territory“E” of the Czar Lite Tariff, published by the Southern Motor Tariff Bureau. Thisfile was required since these tariffs have a more complex method of class factorincrease than does the Rocky Mountain 583 tariff. In this case, both the ratebase group number and the weight break group number are required to yield theproper freight class increase factor.

Middlewest Tariff Bureau Rate Base Cross Reference File (1, 3, 8, 9): Thisfile is required by the MWB 550 tariff to provide the “actual rate base” to use ratebase” conversion. This is due to the way the rate table is constructed by thistariff publisher. Instead of having a single rate base value for each set of rates inthe rate table, this tariff has a range of rate bases. To eliminate the need to haveduplicate rate records, this file was created to provide a cross-reference (i.e.given rate base 10001, which is in the range 10001 to 10005, use 10005 for therate lookup). The contents of this file do not normally require any modification.

Step 6 – Enter the Rates

There are several ways to enter rates into the master rate table. The mostobvious is with the SFMP for this table. The screen for this is shown in the nextexample.

To access the Master RateTable File Maintenance program from the MasterMenu, select 1, 3, 1, 1.



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The key to this field is comprised of the tariff code, level, rate basis, and class.These items, along with the applicable weight bracket, must be known before ashipment can be rated. The process of rating a shipment involves getting thisinformation either from the user or determining it based on origin and destinationzip codes.

A word of caution regarding rate base values…the rate base value in version 2.0of alphaTRUCK is stored as a “string” variable. This means that it will sort in analphanumeric sequence as opposed to a strict numerical sequence (i.e. inalphanumerical sorting, the number 10 will come before the number 2: 1, 10, 2,20, 3…). The reason for using a string variable was to allow for rate base valuesthat contain letters. Certain tariffs in Canada use a letter associated with the ratebase. It also facilitates the use of “zone” rates where the zone may be a singleletter (i.e. A, B, C). See an example of the “Input RateTable“ screen below. Toaccess this program, Input Rate Table – Weight Break by Class, from themaster menu, select 1, 3, 1, 3.



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While it is possible to enter rates using the SFMP, two additional methods havebeen created to simplify the process of entering rates. Depending upon the typeof tariff you are entering, the weight priority method or the class priority methodcan be used. The weight priority method is illustrated in the previous exampleand the class priority method is illustrated in the next example. Both of thesemethods require that the “Rate Base Description” file contain a complete set ofrate base values for the tariff being entered.

To access this program, Class by Weight Break from the Master Menu, select1, 3, 1, 6.



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Step 7 – Setup Default Tariff Information & Customer RateProfile Files

Before launching into a discussion regarding how to set up the default tariffinformation or a customer profile, it is important for the reader to understand thealphaTRUCK Automatic Rating System “Rating Parameter Set” or RPS.

In Step 6 above, we learned that in order to find a rate in the master rate file, weneed the tariff code, the level, the rate base and the freight class. Theseelements go to make up the “key” to the rate file. We also learned that themaster rate table contains class rates, minimum charges, percent changeamounts (discounts and surcharges) and other items needed for rating. Wheredoes the key information come from when a shipment is being rated? Thisquestion is answered by means of the default tariff information file, the customerrate profile (non-standard rates) file and the “Rating Parameter Set” (RPS)provided by these files. The user may also optionally enter the RPS manuallyduring a rate quote session or during freight billing.

What is the “Rating Parameter Set”? As we have just learned, before theautomatic rating routines in alphaTRUCK can begin the process of rating ashipment, five parameters must be known. These five parameters are as follows:

1. The Class Rate Tariff CODE (i.e. RC, WC, MW, etc.)2. The Class Rate Tariff LEVEL3. The Minimum Charges Tariff CODE (i.e. RM, WM, MN, etc.)4. The Minimum Charges Tariff LEVEL5. The Percent Change LEVEL

These five parameters make up the “Rating Parameter Set (RPS). Every freightbill printed by alphaTRUCK indicates what RPS was used to rate the shipment.This information is found in the “Tariff Information” box, just under the shipper’saddress. A typical entry may read as follows:

2RC001RM001120

Where the leading “2” means the shipment was rated using automatic mode (a 1means it was rated via manual mode). The RC001 means (in this case) theclass rate tariff used to rate the shipment was the Rocky Mountain 583 level 1 setof rates. The RM001 means the minimum charges used in the rate calculationprocess was again Rocky Mountain 583 and the level 1 of minimums. And thelast 120 means that the percent change level used was 120. This percentchange level could represent a 20 percent discount or a 20 percent discount witha fuel surcharge, or any other combination of discounts and surcharges. What itstands for depends on how it has been defined in your system. Each element ofthe RPS is discussed further in the below paragraphs.



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The Class Rate Tariff CODE: This code defines the class tariff that will be usedto rate the shipment. In most cases, it also defines the rate base lookup methodthat will be used to determine rate base and the tariff code that will be used tolook up any discounts or surcharges that apply to the class-rated charges, basedon the percent change level component of the RPS.

The Class Rate Tariff LEVEL: This value determines the level of rates that willbe used in computing the class-rated charges for a shipment. The term “level”means a difference in the actual rate per hundredweight. For example, for tariffRC, rate base of 20625 and freight class 50, the any quantity rate might be$35.45 for Level 1. Given the same tariff, rate base, and class, the any quantityrate for Level 2 might be $38.57. When used in conjunction with the class ratetariff, a level defines an entire rate table with different rate per hundred ratevalues that are numerically higher or lower than another level. Generally the onlytime an entirely new table must be created is after a general rate increase.

The Minimum Charges Tariff CODE: This code defines the minimum tariff thatwill be used to compute the applicable minimum charge (not floor minimum) forthe shipment. It also defines the tariff code that will be used to lookup anydiscounts or surcharges that apply to the minimum, based on the percent changelevel component of the RPS.

The Minimum Charge Tariff LEVEL: This value determines the level ofminimum charges that will be used in rating a shipment. As discussed in theclass rate tariff level paragraph above, the term level means a difference in theactual minimum charge. In the example above, the applicable minimum for Level1 might be $111.86 while the applicable minimum for Level 2 might be $122.99.

A note about minimum rate table entries…the class code used for minimums inmost cases is “MIN1”. For some tariffs that provide an alternate minimum chargein the case where a shipper made multiple shipments on the same day, a secondset of minimum charges can be entered using a class code of “MIN2”. Thismultiple minimum rule is generally only found in California Intrastate tariffs.

The Percent Change LEVEL: This number defines the level component of themaster rate table key that will be used to locate any applicable discounts orsurcharges that may apply to the shipment being rated. A single percent changelevel number can represent up to 9 percent discounts and 9 percent surchargeswith a single level. This works by using the special freight class codes that havebeen reserved for these percent change items in conjunction with the ByDefinition rule for the rate base value used by percent change records in themaster rate table. These special By Definition items are listed below.



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Special Percent Change Freight Classes:

Class Tariffs: PCCn, where “n” is in the range of 1 to 9Minimum Tariffs: PCMn, where “n” is in the range of 1 to 9

Special Rate Base Assignments:

Percent Discount: Rate Base=2Percent Surcharge: Rate Base=1

When entering percent change values in the master rate table file (note that adifferent percent change can be entered for each weight break), use the followingformat:

For a 15% percent value, enter 1500

Now that we know what a RPS (Rate Parameter Set) is, how does the systemknow what RPS to apply to a specific shipment? This question is answeredusing the Traffic Type Codes File, Default Tariff Information File, the CustomerRate Profile (non-standard rates) File, the Master Customer File, and the SpecialBilling Data file. Each of these files can contribute to the proper determination ofthe applicable RPS on a specific shipment. However, it all starts with the TrafficType and Default Tariff Information file.

The Traffic Type Code File:

When Version 2.0 of alphaTRUCK was first designed, the decision was made toadd an extra level of flexibility to the automatic rating system. In Version 1.0, thesystem was only able to automatically rate shipments moving from point A topoint B for a single traffic type. With Version 2.0, by adding the “traffic type”designator, a shipment moving from point A to point B can be rated manydifferent ways depending on the current setting of the traffic type code. Some ofthese settings are as follows:

T – LTL/TL TruckingA – Air FreightI – IntermodalD – DistributionS – Special Commodities

The global defaults file (GN-DPS) sets the default for traffic type for all system-rating programs (D/Rates, Enter Freight Bills, Freight Bill Corrections, andothers). However, the user can, at any time, change this setting for their currentrating or billing session to any other available traffic type.



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The Default Tariff Information File

The default tariff information file is the starting point for determining theapplicable RPS. Using the current traffic type setting and the origin anddestination states of the shipment being rated, a record in this file is read whichprovides the required default RPS. A fatal rating error will occur if the systemcannot find this record. See the example below for a record in this file. Theclass tariff code that is found for the particular “state lane” has special meaningas the “default class tariff” and is used to locate customer profile records thatmay apply on this move.

To access the Default Tariff Information File Maintenance program, from theMaster Menu, select 1, 3, 8, 4.

Other information contained in this file includes: The applicable floor minimum;default freight class; tariff for rate base lookup; distance table points (ifapplicable); and the Interstate level that should be applied on intrastateshipments (origin and destination states the same), but where the user indicatedduring freight billing that the shipment was involved in interstate commerce.

The Customer Rate Profile File

If a customer is provided a “non-standard” set of rates or discount, a RPSdifferent from the default RPS must be available for the automatic rating system.This RPS is found in the Customer Rate Profile file (FC-NSX). See the followingexample for a typical record in this file. A record is added to this file using thefollowing as the key to the file: the customer’s alpha code and the applicable



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“default class tariff” code for the state lane that the customer has been providedthe non-standard RPS for.

To access the Customer Discounts File Maintenance Program, from theMaster Menu select 1, 4, 2.

The following paragraphs will discuss the various fields in the Customer Profilemaintenance screen.

Field 1 provides a way to turn off automatic rating for a specific customer. Entera ‘Y’ in this field if you want shipments for this customer to be manually ratedonly.

Fields 2 to 7 define the RPS in the same manner as the default tariff informationfile. This includes the class tariff, class tariff level, minimum tariff, minimum tarifflevel, percent change level, and the interstate level to use for special caseintrastate shipments.

Fields 8 to 12 define an alternate RPS that is used based on the value in fieldnumber 13, ALT set usage.

Field 13 defines the use of the RPS found in fields I through 12. The choices forthis field are as follows:

N – Not ApplicableD – Intermodal DistributionM – Los Angeles Metro BaseI – Non-Director (Interline) Rates



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Field 14 defines the C.O.D. Fee calculation method. The master rate tablecontains the amounts of the C.O.D. fee by using a rate base of 1 and a freightclass of COD. This field interprets how the record in the master rate table isused. The choices are as follows:

P – Normal per Master Rate TableF – Flat Rate as found in rate position 1M – Percent of the C.O.D. amount, percent in rate position 1, with a

minimum charge in rate position 2.N – Not applicable (no C.O.D. fee will be added to charges)

Field 15 provides an ON/OFF switch to force a multiple shipment condition all ofthe time. This is used in conjunction with the MIN2 minimum charges asdiscussed earlier in this document.

Field 16 defines the default freight class for this customer. During freight billingand D/Rate rate quotes (if the customer information has been loaded), if theclass field is left blank, this class value will automatically be inserted.

Field 17 provides an ON/OFF switch for the use of a floor minimum. If set to ‘Y’,any discount provided cannot force the charges to go below the amount indicatedin field 18. If set to ‘N’, discounts would be applied without regard to an absolutefloor amount.

Field 18 defines the floor minimum discussed in Field 17 above.

Field 19 defines the floor minimum that would be used for the alternate set ofrates, if applicable (see Fields 8 to 12).

Fields 20 and 21 define the use and amount of a minimum weight requirement. IfField 20 were set to a ‘Y’, then the discount defined by this record would apply ifthe weight of the shipment exceeded the weight amount entered into Field 21.

Fields 22 to 24 provide space for some sales and marketing information. Entriesinto these fields are optional.

Fields 25 and 26 allow for a contract number and expiration date. Thisinformation can be queried using the Select and Sort system to print a report ofcontracts due to expire.

Field 27 is the date this record was first entered.

Field 28 is an ON/OFF switch to disable the printing of charges on a prepaid D/Rfor a customer. If the system global switch is already set to do this, this settingwill be ignored.



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Fields 29 to 36 provide various rate application questions that can be answeredwith a ‘Y’ or an ‘N’. One exception to this is the “Interline Concur” question. Forthis question, a third choice is available: Use alternate rates.

Field 37 allows for the setting up of a “FAK” rating situation. If the “Enter ClassOK” question is answered with an ‘N’, during freight billing, the biller will not beallowed to enter the class and the class entered in Field 16 (see previousdiscussion on Field 16) will automatically be entered.

Methods of Reading the Customer Profile File

Now that we have a discount record entered, how does the system find it? Themost obvious is via the customer alpha code and the default tariff code. When afreight bill is entered, a check is made based on the debtor, shipper, consigneehierarchy, of the records in the Customer Profile file. However, it is possible for acustomer to have a rate applied from this file and not have a record in this file.This is done one of two ways as follows:

1. Alternate Rate Field in the Master Customer File. Two fields located in theMaster Customer file provide for the assignment of an alternate customercode for the purposes of getting rate information. In the CustomerInformation SFMP, (from the Master Menu 1, 4, 1) Field 33 must be set toa ‘Y’ and Field 34 must contain the customer code of the customer whoserates are to be used (this customer must have a record in the customerprofile file). This feature is useful if you have a large customer with manybranch offices. Only one record needs to be added to the Customer RateProfile file. All of the branch office customer records then can updatethese two fields and use this one rate profile record.

2. Another option to setting up individual Customer Rate Profile records foreach customer is to use the Special Billing Data SFMP (from the MasterMenu select 1, 4, 3). If a customer has a record in this file, the customercode found in the “Sort by Customer Code” field will be used initially tocheck for a customer discount in the Customer Rate Profile file.

In review, three methods exist for setting up a “non-standard” RPS for acustomer as follows:

1. Enter a record in the Customer Rate Profile file.2. Enter an “alternate rate code” in the Master Customer file.3. Enter a record in the Special Billing Data file using the “sort by” field.



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Part II – Setting up a Discount to an Existing Rate Table

This section will briefly review the steps required to set up a discount to anexisting rate table. It is assumed that this will be a percent discount, not alowered rate per hundred rate amount.


The first step is to select an arbitrary value to represent the discount level. Thislevel number can be in the range of 1 to 255. You can also use a level numberfor a percent change level even if it is already being used for a class or minimumtariff level. Some customers use the 100’s for percent discounts. For example,120 would represent a 20 percent discount. Whatever level you choose, give itsome thought as it will be difficult to change your mind later after you havecreated several records that will use this level number.

Once you have decided on a level number, add a record to the level file. SeePart 1, Step 2 above.

Step 2 – Add Class File Records

If you already have discounts on your system, you will not need to do this step.This step would only be done the first time you setup discounts. Add two recordsto the freight class file (see the example on Page 115), one for a class of “PCC1”and one for a class of “PCM1”. These classes were probably set up on yoursystem when alphaTRUCK was initialized.

Step 3 – Add Rate Table Records

Next, add the required records to the master rate table file. For a simpler percentdiscount setup, two records are required in this file, one for the class tariff andone for the minimum tariff. See the following example for a sample record in thisfile for a 60% discount to the Rocky Mountain 583 class tariff. A similar recordmust be added for the minimum charge tariff. In this case, the class code wouldbe PCM1 instead of PCC1.

Note that the only difference between a percent discount record and a percentsurcharge record is the rate base value. The rate base for a surcharge is a “1”while the rate base for a discount is a “2”.

To access the Master Rate Table File Maintenance program, from the MasterMenu select 1, 3, 1, 1.



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The final step is to add a RPS record to the Customer Rate Profile file. This wascovered in detail in Part 1, Step 7. After this record is added, if additionalcustomer codes require the same RPS, use the “ALT Rate Code” feature of thecustomer file to avoid having to add additional records to the Customer RateProfile file.

This completes the setting up of a customer discount. All future freight billsissued for this customer will be rated using this new RPS. One word of cautionregarding the correction of freight bills issued prior to the effective date of thisnew RPS…if automatic rates are used during a correction of an old freight bill,the system will use the new RPS for calculating the rate. In this case, manualrates should be used for the correction.

Part III – Updating Rate Table with Rate Increase

This section will briefly discuss the steps required to apply a general percentincrease to an existing rate table. When a rate increase is decided on by acarrier, it is assumed that it will still require the old rates (rates in effect prior tothe rate increase) for working with freight bills that were issued before the rateincrease. It is for this reason that an entirely new rate table must be created withthe new rate levels. alphaTRUCK provides various utility programs to facilitatethis table creation process. One of the more subtle questions that must beanswered during a rate increase is whether to make the new table have thesame level number as the “default” or to give it an entirely new level number andthen change the default to match this new level. The answer to this questionimpacts all of the records in the Default Tariff Information by State Lane file, theCustomer Rate Profile file, and all existing freight bills in the system. DPSSoftware recommends that you keep the default level number the same (i.e. now



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with the new rate levels) and store the rates that were in effect prior to the rateincrease as a new level number. This means that corrections to freight bills thatwere originally billed prior to the rate increase must be corrected using manualrates or the RPS will need to be manually changed to use the old rate levelnumber.


Based on the decision made to the question raised in the above introductorysection, the level number being defined will either be the new default level or thelevel of the rates in effect prior to the rate increase. In either case, select a newlevel number and enter it into the level file per the instructions found in Part 1,Step 2 of this document.

Step 2 – Copy Table (Class & Minimum)

The next step involves making a copy of all of the involved tariffs in the rateincrease. This copy process is facilitated using the “Transfers Between Tables”utility program (from the Master Menu select 1, 3, 1, 2). The following exampleshows what this “copy” utility screen looks like.

In the case of a rate increase, the source tariff code and the target tariff code willbe the same. For the source rate level number, enter the current default level.For the target rate level number, enter the level number defined in Step 1. Theremaining fields in the upper section of the screen should be left blank (freightclass, weight breaks, starting and ending rate base).



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In the lower section, there must be a one-to-one relationship between the CWTindexes of the source and the target tables (i.e. target index is 1, source indexmust be 1 and so on, up to the number of weight breaks defined in the tariff).This “copy relationship” feature is used when you are creating a new tariff thathas a different number of weight breaks than the one you are copying. Be sureto copy both the class tariff and the minimum tariff.

Step 3 – Do the Increase

Once a new table is created, on the system there now exists two identical ratetables with the exception that the level number is different. After deciding whichlevel will become the new default, use the “Percent Rate Change – Global” utilityprogram to apply the increase (from the Master Menu select 1, 3, 1, 4). See thefollowing example.

Enter the tariff code of the tariff you are increasing (again, you will need to do thisfor both the class tariff and the minimum tariff). Next enter the level number. Ifyou are going to apply different increases for each weight bracket, enter theweight bracket value next. This value corresponds to the weight break numbersfound in the Tariff Definition file (i.e. AQ – 0, 5C – 500, and so on). The percentchange amount is entered as a percent with two places of accuracy. Forexample, if the increase is for 2.5%, you would enter 250. This will be re-displayed when you move to the next field as 2.50. Next, indicate if the percentchange is for an increase (I) or a decrease (D). After all of this information isentered, you need to enter a ‘Y’ at the prompt, “Are you sure this is what youwant to do?” Answering ‘Y’ at the prompt will begin the process of applying thepercent change to the whole tariff (or weight break if that option was selected).



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Step 4 – Default vs. New

If you decided to keep the default the same level it was before the increase, thenno additional changes are required with the exception of the possible adjustmentof some customer rate profiles if you have agreed to keep their rate levels thesame. If this is the case, then you must reset the level numbers in these recordsto the new level that was created to store the rate levels prior to the rateincrease.

If you decided to make the new level the new default, then all records in thedefault tariff information file and the customer rate profile must be updated toreflect this change.

Part IV – Steps to Rating a Freight Bill

This final section of this document is designed to aid the reader in understandingthe steps taken in the automatic rating routines to actually rate a shipment.

The first step is to make sure that all required information is provided. Thisrequired information includes the following items:

• Origin Zip & State• Destination Zip & State• Weight by Class• Traffic Type• Shipper, Consignee, & Debtor

Based on this information, the following steps are taken to rate a shipment.

1. Determine the Default Tariff Information based on traffic type, origin state anddestination state (see file FR-DTI, Master Menu 1, 3, 8, 4).

2. Check the Customer Rate Profile file for any “Non-Standard” rates, using thedebtor, shipper, and consignee customer codes. The alternate rate code fieldsare also checked for each of these customers.

3. Based on the answers received from Steps 1 and 2 above, the TariffInformation File is read for both the applicable class tariff and minimum tariff.

4. The information provided by Step 3 informs the rate base lookup macro whatmethod is to be used to determine the rate base. This is based on the tariff typecode and the origin and destination points. The rate base must be found or therating process will fail.

5. Now that the tariff, level, rate base, and freight class information is all known,the next step is to read the maser file for the class rates. The freight charges are



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then calculated based on the actual weight and the next weight break. Anyapplicable surcharges and discounts are also applied.

6. After the class-rated freight charges are computed, the minimum charge isalso determined with all applicable percent change items applied.

7. Now that the class rate charges and minimum charges have been computed,the correct method for rating the shipment can be determined. A comparison ismade of the class charges based on actual weight versus being billed at the nextweight group. The higher of these two charges is eliminated. The nextcomparison is with the minimum charge and the class-rated charge. If the class-rated charge is below the minimum, the class-rated charge is eliminated and theminimum applies. If the class-rated charge is higher, the minimum charge iseliminated and the class-rated charge applies. The final comparison is with thefloor minimum. If the remaining charge is below the floor minimum, the floorminimum is applied.

8. When Step 7 is finished, the resultant charges are applied to the freight bill.

module f – freight management – tariffs, rates, & customer ...€¦ · module f – freight...

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