Retailers and 3PLs are under pressure to move high volumes of freight faster, with fewer errors, and at lower cost. But less-than-truckload (LTL) shipping introduces complexity that can quickly erode margins if left unmanaged.

This guide breaks down what’s driving LTL costs, where savings are hiding, and how technology-forward shippers are optimizing every load to stay ahead.

What drives LTL cost

Less-than-truckload (LTL) shipping isn’t just priced by weight—it’s governed by a mix of operational and classification factors that affect cost per mile and cost per pound. Retailers and 3PLs that manage high delivery volumes need a clear understanding of how these variables work to protect margins and avoid surprise fees.

Costs are determined by a combination of:

  • Freight class: Based on density, stowability, handling, and liability, lower freight classes (e.g., Class 50) are generally cheaper. Misclassification can lead to reclassification fees and shipment delays.
  • Distance and zone: Longer distances, rural destinations, or out-of-network zones increase cost due to fuel use and fewer deliveries per route.
  • Accessorial services: Liftgate usage, inside delivery, delivery appointments, and proof of delivery add cost. These services are common with oversized or big and bulky freight.
  • Handling complexity: Multi-stop routes, special packaging needs, or delivery restrictions drive labor time and idling costs.
  • Speed and SLA guarantees: Expedited delivery narrows carrier flexibility and adds to overall rate structure.

The more complexity introduced to an LTL shipment, the more likely it is to trigger added cost.

 

Cost reduction strategies

For retailers and 3PLs shipping LTL regularly, cost control starts with the right partners and the right planning.

Here are a few high-impact strategies:

  • Work with freight brokers: Brokers allow shippers to consolidate loads and fill trailer capacity, reducing per-unit shipping costs through shared use.
  • Partner with 3PLs: 3PLs often have contracted rates across multiple carriers and can negotiate more favorable pricing due to higher volume.
  • Digitize load planning: Intelligent routing and consolidation software helps optimize truck space and sequence deliveries to minimize deadhead miles.
  • Audit your accessorials: Recurring fees from mismanaged liftgate use or manual appointment scheduling can add up quickly. Audit invoices to find repeat charges that can be avoided with better routing logic or provider selection.

Each of these actions helps shift LTL from a fixed cost center to a variable cost advantage.

 

Technology’s role

LTL shipping has become more dynamic—and more complex. Manual planning can’t keep pace with today’s delivery demands. That’s why leading retailers and 3PLs rely on logistics technology to control cost and protect service levels.

Key capabilities include:

  • Automated carrier selection: Systems that assess cost, service level, and capacity in real time can assign the most efficient carrier for every shipment.
  • Exception monitoring: Real-time alerts allow dispatchers to act on delays or missed pickups before they impact downstream deliveries.
  • Digital documentation: APIs and integrations eliminate billing errors and streamline classification through auto-generated bills of lading.
  • Self-service scheduling and notifications: Allowing consumers to track and adjust their deliveries reduces WISMO tickets and improves satisfaction.

Technology doesn’t just make LTL more efficient—it makes it measurable. And that’s critical for optimization.

 

Best practices to optimize LTL

Optimization isn’t a one-time fix. It’s an ongoing process that spans every phase of the shipment lifecycle—from classification to carrier benchmarking.

Apply these practices to stay ahead:

  1. Track the right KPIs: Cost per pound, on-time delivery rates, damage claims, and billing accuracy help teams identify patterns and evaluate partners.
  2. Measure and classify shipments accurately: Incorrect dimensions or freight classes drive rework and costs. Consistency improves planning and pricing.
  3. Compare carrier performance: Monitor not just cost, but SLA compliance and claims rates. Different carriers perform differently by region or vertical.
  4. Improve packaging: Palletized or crated shipments reduce damage, improve stowability, and prevent upcharges tied to odd-sized loads.
  5. Standardize documentation: Use digital forms to ensure shipment data is accurate, complete, and instantly accessible.

When these processes are embedded into daily operations, LTL stops being a margin risk—and starts becoming a competitive lever.