Discounting the rate prior to rating versus discounting the extension results in differing amounts. Which works out better for the carrier? Here are 3 examples. In ALL cases, it works out better for the carrier to discount the rate first. It is pennies on every transaction, but might result in hundreds or thousands of dollars over time. The example shows 3 shipments of different weights and different rates. The discount applying to the shipments is 66%. Discounting the extension versus discounting the rate always results in a lesser amount.
It is because applying a discount to a lessor amount (the rate) results in smaller discount than applying the discount to the larger amount (the extension).
