A differential is a discount offered by a carrier that faces a service time disadvantage over a route.
The main purpose of offering differential is to attract customers who are looking for faster shipping times. In order to offer this discount, the carrier must have available capacity on their quicker service in order to make up for the lower rate.
It’s important to note that:
- Тot all carriers offer a differential pricing, and even among those that do, the discounts can vary greatly.
- For example, one carrier may only offer a 10% discount while another may offer a 50% discount.
Differential pricing is just one of the many ways that logistics providers can tailor their services to meet the specific needs of their customers.