What is LTL Freight?

Less-than-Truckload, also known as LTL freight is a versatile shipping solution that offers businesses of all sizes a cost-effective and efficient way to transport their goods.

By consolidating shipments from multiple shippers and understanding what is LTL freight you can streamline your supply chain and improve your bottom line.

LTL freight provides a practical and efficient solution for businesses that don’t require a full truckload for their shipments.

By consolidating cargo from multiple shippers, LTL freight carriers optimize truck capacity, resulting in significant cost savings and improved transportation efficiency.

This approach is particularly beneficial for businesses that ship smaller quantities of goods or have shipments that vary in size and weight. LTL freight offers a flexible and adaptable solution that can accommodate a wide range of shipping needs.

How Does LTL Freight Shipping Work?

There are several strategies involved in the LTL process:

Shipment Pickup: LTL carriers collect shipments from various businesses, ensuring timely pickup and efficient transportation.
Consolidation: Shipments are grouped together at a strategically located consolidation hub. This process maximizes truck capacity and minimizes empty miles, leading to improved efficiency and cost savings.
Transportation: The consolidated truck travels to its destination, following carefully planned routes to optimize delivery times.
Delivery: Individual shipments are delivered to their respective recipients, ensuring accurate and timely delivery. The LTL carrier coordinates with the recipient to schedule a convenient delivery time and handle any necessary paperwork.

Advantages of LTL Freight Shipping

LTL freight offers a significant cost advantage over full truckload (FTL) shipping for businesses with smaller shipments. By consolidating shipments from multiple shippers, LTL carriers optimize truck capacity, reducing transportation costs, which translates into substantial savings for businesses, allowing them to allocate more resources to other areas of their operations.

LTL carriers offer a wide range of services and options, providing businesses with the flexibility to meet their specific shipping needs. Whether you require expedited shipping, residential delivery, or hazardous materials handling, LTL carriers can accommodate your requirements.

LTL carriers serve a vast network of locations, ensuring that businesses can ship goods to virtually any destination. This accessibility is particularly valuable for businesses with a national or international footprint.

By consolidating shipments and minimizing empty miles, LTL freight contributes to a more sustainable transportation system, aligning with the growing emphasis on environmental responsibility and corporate social responsibility.

Drawbacks of LTL Freight Shipping

LTL shipments often take longer than FTL shipments due to the consolidation process, multiple handling transfers, and potential routing inefficiencies. The additional time spent in transit can impact delivery times and lead to delays in receiving goods.

The multiple transfers and handling involved in LTL shipping can increase the risk of damage to your goods, which is especially true for fragile or sensitive items that require careful handling. While LTL carriers take measures to minimize damage, there is always a risk associated with multiple transfers.

LTL carriers often charge additional fees for services beyond standard transportation, such as a residential delivery, liftgate service, or hazardous materials handling. These fees can add to the overall cost of your shipment and should be carefully considered when budgeting.

What Determines LTL Shipping Rates?

There’s a lot of factors involved which affect LTL shipping rates:

Weight and Dimensions

The size and weight of your shipment directly influence the cost. Larger, heavier shipments generally require more space and handling, leading to higher rates.

Distance

The distance between the origin and destination is a significant factor in determining shipping costs.

Longer distances typically result in higher rates due to increased fuel consumption and transit time.

Accessorial Charges

LTL carriers often charge additional fees for services beyond standard transportation, such as residential delivery, liftgate service, or hazardous materials handling.

These charges can vary depending on the specific services required and the carrier’s pricing structure.

Fuel Surcharges

Fluctuations in fuel prices can impact shipping rates.

Carriers may implement fuel surcharges to offset the increased costs associated with higher fuel prices.

Peak Season

During peak shipping seasons, demand for LTL services can increase, leading to higher rates, which is especially true during the holiday season or other periods of high economic activity.

Who Should Use LTL Shipping?

LTL freight is a versatile shipping solution that can benefit a wide range of businesses.

Small and Medium-Sized Enterprises (SMEs): LTL freight offers a cost-effective option for SMEs that don’t have the volume to justify FTL shipping.

Businesses with Fluctuating Shipping Needs: If your shipping needs very frequently, LTL provides flexibility and allows you to pay only for the space you use.

Businesses Shipping to Multiple Locations: LTL carriers serve a vast network of destinations, making it ideal for businesses with a national or international footprint.

Businesses with Limited Storage Space: LTL allows you to ship goods as needed, reducing the need for large storage facilitates.

How to Lower LTL Freight Rates

Combine multiple shipments into a single LTL shipment to reduce costs and improve truck usage.

Build strong relationships with LTL carriers and negotiate favorable rates, especially for businesses with consistent shipping volumes.

Select a carrier with a proven track record, a strong network, and competitive pricing. Consider factors such as transit times, service reliability, and additional fees.

Use efficient packaging to minimize the shipment’s dimensions and weight. This can significantly reduce shipping costs, especially for shipments with high density.

Freight forwarders can often secure better rates by using their volume and negotiating with multiple carriers.

Use online tools and platforms to compare rates, track shipments, and optimize your LTL shipping process.

Be mindful of seasonal fluctuations in shipping rates and plan your shipments accordingly. Avoid peak shipping periods if possible to secure better rates.

In some cases, alternative shipping methods, such as intermodal transportation or rail freight, may be more cost-effective. Consider these options, especially for long-distance shipments or shipments with specific requirements.

Membership in shipping associations can provide access to resources, networking opportunities, and potential discounts on shipping services.

How to Optimize LTL Freight Shipping

Consolidate Shipments: Combine multiple shipments into a single LTL shipment to reduce costs.

Negotiate Rates: Build strong relationships with LTL carriers and negotiate favorable rates.

Choose the Right Carrier: Select a carrier with a proven track record and competitive pricing.

Optimizing Packaging: Use efficient packaging to minimize the shipment’s dimensions and weight.

Consider Freight Forwarders: Freight forwarders can often secure better rates by leveraging their volume.

Use Technology: Use online tools and platforms to track shipments, compare rates, and streamline the LTL process.

LTL shipping FAQs

What’s the difference between LTL and FTL?

LTL and FTL are two primary modes of freight transportation. While they share the common goal of moving goods from point A to point B, they differ significantly in terms of the volume and nature of the shipments they handle.

LTL (Less than Truckload)

LTL shipments are those that do not fill an entire truck. This is ideal for businesses with smaller shipments that don’t justify the cost of a full truckload. LTL carriers consolidate shipments from multiple shippers into a single truckload.

LTL carriers consolidate shipments from multiple shippers into a single truck, reducing costs and improving efficiency.

FTL (Full Truckload)

FTL shipments involve a dedicated truck for a single shipper.

This is suitable for businesses with large shipments that can fill an entire truck. FTL shipping offers faster transit times and greater control over the shipment, but it can be more expensive for smaller shipments.

How long does LTL shipping usually take?

LTL transit times can differ depending on several factors, including:

Distance: The distance between the origin and destination.

Carrier Efficiency: The carrier’s network, routing, and handling practices.

Traffic and Weather Conditions: Unexpected delays due to traffic or adverse weather can impact transit times.

Peak Season: During peak shipping seasons, demand for LTL services can increase, leading to longer transit times.

How are LTL shipping rates determined?

LTL shipping rates are calculated based on several factors:

Weight: The weight of the shipment.

Dimensions: The size of the shipment, including length, width, and height.

Distance: The distance between the origin and destination.

Accessorial Charges: Additional fees for services such as residential delivery, liftgate service, or hazardous materials handling.

Fuel Surcharges: Fluctuations in fuel prices can impact shipping rates.

Peak Season: During peak shipping seasons, demand for LTL services can increase, leading to higher rates.

What is LTL Freight?