If your company uses a retail delivery model which ships physical products larger than parcel size, understanding LTL freight shipping is essential for doing business. This is particularly true for last mile delivery, where an efficient shipping process is critical for customer satisfaction.
In this guide, we’ll walk you through the essentials of LTL shipping, including:
- What is LTL freight
- How LTL shipping differs from other shipping options such as full truckload freight and parcel shipping
- The advantages and potential drawbacks of using LTL shipping
- Understanding the costs of using LTL and how carriers go about determining prices for LTL shipping
- When it makes sense to ship with an LTL freight carrier instead of shipping another freight class.
What is LTL Freight?
“LTL” means “less than truckload.” Less than truckload LTL shipping refers to a truckload shipping method used for transporting a shipment which is larger than a parcel but light enough or small enough that it doesn’t require a full truckload.
Since LTL shipments don’t use an entire truck, free space on the truck often is shared by other shipments from other shippers or carriers.
We can understand the subject more precisely by quantifying the definition in terms of freight class weight categories. The LTL freight class refers to categories between 150 and 15,000 pounds. This encompasses a number of freight class designations in the National Motor Freight Classification (NMFC) system.
There are 18 classes numbered from 50 to 500, with lower classes being easier to ship and generally less expensive. For example, durable freight which easily fits on a standard 4’ x 4’ pallet and weighs 50 or more pounds per cubic foot has a freight class of 50. You get more information by consulting official NMFC freight class categories.
The bill of lading which accompanies truckload shipments will show the official freight class.
Note that the freight class which belongs on the bill of lading for truckload shipments is determined by a number of factors – besides sheer weight – which together determine the transportability of the truckload freight. These can include weight per unit of volume (density), the amount of space required to show the shipment (stowability), ease of handling and the proneness of a shipment to be damaged or cause damage (liability).
To properly enter a freight class on a bill of lading or to properly interpret a bill of lading, you need to take all of these factors into account.
What is the difference between LTL and FLT Freight and Parcels?
LTL shipping involves truckload shipments which don’t fill a full trailer and generally encompasses freight class categories between 150 and 15,000 pounds. In contrast, full truckload shipping, known as FTL shipping, involves truckload shipments which fill an entire trailer and usually uses categories exceeding 15,000 pounds.
At the other end of the scale, parcels involve smaller shipments of up to 150 pounds which don’t require any special means to store, transport or lift. So the key differences for distinguishing full truckload shipments and parcels from LTL freight shipping are by the amount of trailer space required and by weight.
Pros and Cons of LTL Freight Shipping
Compared to other types of truckload shipments, LTL freight has both benefits and drawbacks.
What are the benefits of LTL freight shipping?
The biggest benefit of LTL shipping is that you’re sharing space and shipping costs with other shippers. When you use LTL shipping, you’re only paying part of the cost for the shipment. This can make your total costs for shipping LTL lower than when using other truckload shipping methods.
LTL freight shipping has other advantages as well. Most LTL shipments can be loaded onto pallets, which provides better protection against damage than shipments of multiple units of smaller sizes.
This can also give you access to services you could not use with certain shipping methods. For instance, with LTL carriers, you may be able to use inside pickup and delivery and liftgates.
What are the drawbacks of LTL fright shipping?
Shipping LTL has some potential disadvantages as well. Less than truckload shipping only allows you to ship packages which exceed parcel size and weight and don’t require a full truckload of freight. If you’re shipping very small items, very heavy items or very bulky items, you might need other truckload shipping methods.
Another potential drawback when you choose LTL shipping is that the cost savings from sharing truckloads can be offset by additional fees such as surcharges and service charges.
This stems from the fact that LTL shipping usually is not the most cost-efficient option for freight carriers compared to full truckload shipping. LTL shipping requires drivers to stop at multiple pickup points, and sometimes extra drop-off points, and spend more time loading. This costs carriers more for fuel consumed both driving and idling than freight carriers who ship full loads. LTL carriers also have to pay more to drivers. To offset these costs, the carriers build them into the LTL freight rates per mile.
Which factors determine LTL shipping rates?
A carrier or 3pl logistics provider uses a number of factors to determine the LTL shipping rate.
Factors which impact LTL rates include:
- The distance the truck has to go to get to its destination
- The freight class of the shipment, based on its weight per unit of volume, ease of storage, ease of handling and liability risk
- Whether the shipment requires any special handling, such as handling of fragile packages, perishables or hazardous materials
- Whether the drivers is performing additional tasks such a collecting a digital proof of delivery.
- Whether the shipper wants an expedited delivery speed for their items
All these variables can go into the cost of determining LTL shipments.
What can you do to reduce LTL shipping costs?
One way to reduce the cost of shipping LTL is by partnering with other businesses for more efficient load sharing. Freight brokers can help you find partners to split your shipment costs.
Another way to save on costs is to work with an LTL shipping provider which uses dispatch and routing software. Using this type of software can increase efficiency and cut last mile delivery costs for carriers, in turn passing savings on LTL freight shipment on to customers.
A third method to realize significant cost savings is to work with a third-party logistics provider. These providers can help you cut LTL freight expenses by negotiating with LTL carrier companies for you and by using logistics software to optimize LTL freight arrangements.
3 ways to make LTL freight more cost effective
- Use freight brokers to partner with other shippers
- Work with LTL shippers who use intelligent dispatch and routing software
- Contract third-party logistics providers to help you arrange your shipping and delivery
When to use LTL shipments
LTL freight is most widely used for shipping freight packages between 150 pounds and 15,000 pounds which don’t need a full trailer. If your truckload freight fits these parameters, working with LTL carriers can be cost-efficient, particularly if you can make arrangements with a freight broker or third-party logistics provider to arrange discounts on these freight services.
When should you use parcel instead of shipping LTL?
Parcel can be more cost-efficient for packages up to 150 pounds. Consider using less than truckload shipping for packages larger than this.
However, note that some parcel carriers have expanded their policies to accommodate larger packages, so whether shipping parcel or shipping LTL is your best option needs to be determined by cost comparison on an individual basis. For example, if you’re shipping to an office building, a parcel service may allow you to avoid inside delivery costs which an LTL carrier might charge.
Why Technology is Critical for LTL Shipping Today
LTL shipping providers today depend heavily on logistics technology such as dispatch and routing software to ensure on-time delivery. Technology helps LTL shippers manage essential tasks such as allocating available truck space, scheduling routes and sending real-time notifications to drivers and customers. This helps ensure on-time delivery and allows LTL shippers to coordinate second delivery attempts with customers.
Technology also helps LTL customers. For example, freight brokers use online portals to help shippers find and compare carriers.
How to optimize LTL Freight Shipping
You can follow a number of best practices to increase efficiency and cut costs when shipping LTL freight. Here are a few guidelines to use when you ship LTL freight.
1. Use key metrics to guide LTL freight management
When shipping LTL freight, using key performance indicators will give you a more objective basis to set goals for your LTL shipment management, compare LTL carriers and measure performance of your LTL shipments. Some important KPIs for include:
- Cost per pound of shipping LTL freight
- On time delivery rate of LTL carrier services
- Freight damage rate of less than truckload freight carriers
- Billing accuracy of carriers
Establishing your key metrics before you ship LTL freight will help you compare shipping providers, identify the right last mile carrier for your needs, and optimize your logistics planning and performance.
2. Measure and classify your LTL freight accurately
Knowing whether you should use an LTL carrier depends on accurate measurement and classification of your truckload freight. Measuring weight and dimensions further gives you the information you need to compare costs with different freight carriers.
Finally, less than truckload carriers require accurate classifications for your bill of lading. For all these reasons, it’s important to measure accurately when shipping LTL.
3. Compare multiple LTL freight services
Different service providers may offer different prices for the same LTL load as well as different shipping speeds and optional services such as over-the-threshold or contactless delivery. To control costs and other important variables, be sure to compare multiple carriers when shipping LTL freight.
4. Package LTL shipments properly
When shipping LTL, it’s important to pack LTL freight correctly to optimize efficiency and avoid damage to your truckload freight. One key consideration when you ship LTL freight is whether you should place pallets inside wooden crates or pack them in shipping containers.
5. Fill out LTL shipment documentation correctly
When shipping LTL, make sure you provide your LTL carrier with all the information they need to ensure on-time delivery of your LTL shipment. Key information freight carriers need for shipping LTL includes size dimensions, weight, freight classification, number of units and declared value.
The future of LTL freight
LTL shipping is going in the same direction as everything in the supply chain: more complicated, more sophisticated, and with a stronger emphasis on efficiency to handle larger delivery volumes.
To get the most out of your LTL shipping, make sure to accurately assess multiple carriers, measure performance through delivery KPIs, and follow the proper shipping process.
You can take further steps to make shipping LTL freight more affordable and customer friendly by using freight brokers to partner with other shippers, work with LTL providers with intelligent dispatch and routing tools for faster and more efficient delivery, and work with third party delivery providers to help you arrange shipments according to your specific shipping needs.
As carriers work to increase delivery capacity and efficiency, your best bet is working with carriers that provide special services and good experiences that your customers will appreciate.
Frequently asked questions:
Full truckload freight shipping can be your most cost-efficient option if you ship freight which fills a full trailer and weighs over 15,000 pounds. FTL also can be a better option for certain types of truckload freight which are perishable or fragile, such as frozen food.
Shipping LTL is expensive because it involves higher shipping costs for LTL carriers compared to an FTL shipment. With FTL, the driver only has to stop at one pickup location to hook up their trailer and then drive to their drop-off point. A full truckload freight driver, is on the road most of the time, apart from stops for fuel and meals and rest. This generally makes FTL freight shipments the most cost-efficient option for freight shipping carriers.
In contrast, an LTL carrier has to stop at an additional pickup point for each shipper they serve, and in some cases additional drop-off points. At each point, the driver has to spend time loading or unloading, which can consume fuel idling. Drivers for these services typically get paid more to compensate for extra time and extra handling. Companies with these services build these additional freight shipping expenses into their fees when calculating delivery costs.