Rural vs. Interline Shipments

Written by Neal Willis
     

iStock_000053069624_Medium_Trucks_LoadingThere are a couple of key differences in rural and interline shipments.  First, known interline points are different from rural points in that it is a guarantee that the freight will be transferred from one carrier to the next, most likely during the line-haul process, which drastically increases the amount of handling.  Rural points only include a secondary carrier being involved in the pickup or delivery of a shipment and line-haul remains within the carriers’ network.

Interline shipments utilize purchased transportation from the original billing party’s end.  For example, if you wanted to interline using carrier “A” and carrier “B” and the pickup is made out of carrier “A’s” network, then carrier “A” would be the original billing party.  Carrier “A” would be using purchased transportation from carrier “B” to complete the delivery within carrier “B’s” network.  Carrier “A” pays carrier “B” based on a negotiated rate they have between one another.  Carrier “A” then bills the shipper with the rate carrier “A” paid to carrier “B” factored into the freight bill the shipper receives.

Second, the chances of damage, shortage and lost freight are significantly increased with interline iStock_000010401419_Medium_Riskshipments because handling is doubled and sometimes even quadrupled when the freight is handed off to another carrier during the line-haul.  With rural points, the pickup or delivery carrier is handling in the same manner the “original” carrier would as opposed to an interline shipment where each carrier is handling the freight at their break-bulks, regional and local terminals.

Lastly, interline shipments can cause billing problems since carrier “A” is paying carrier “B” a rate that’s based on a completely different rules tariff than what the shipper is being billed by carrier “A”, which can be difficult to determine when the base rates and rules tariffs are vastly different.  Therefore, some type of conversion of rates must be made for rating and billing purposes.  Unlike rural points where a shipper’s pricing generally applies to all portions of the shipment, pricing doesn’t normally apply to all portions of an interlined shipment.  For example, if a shipper uses carrier “A” in their network and they hand the freight off to carrier “B”, then the rules tariff will typically only apply to carrier “A’s” portion of the move.  After that, it’s a gamble. 

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