Aggregate Tender Rates

Posted in Operations and Supply Chain Terms, Total Reads: 443

Definition: Aggregate Tender Rates

It is the discount offered or a lesser rate charged to a shipper by the carrier, if the shipper ships two or more same class-related shipments to a carrier at one place and time.

A carrier usually sets a minimum criteria for classes based on weight, say, 10 Tonnes, to charge a lesser rate to the shipper. The carrier saves cost if the shipper ships two or more shipments together, hence reducing the carrier’s pick up costs which in turn is passed on by carriers to shippers in the form of discounts or reduced rate.

It is also usually tendered by a carrier to the shipper when shipper agrees to provide multiple shipments to the carrier over a period of time in exchange of a discount.

Numerous other pricing innovations have been introduced by carriers to increase shipments through a single shipper.

For example, UPS offers discounts to its customers based on aggregate weight or cubic volume of the item to be shipped. This reduced rate, offered by carriers is called Aggregate Tender Rate.



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