In today’s rapidly evolving business landscape, efficient shipping and logistics are paramount to success. If your company operates within a retail delivery model, particularly dealing with physical products larger than parcel size, understanding Less Than Truckload (LTL) freight shipping is essential. In this article, we will delve into the world of LTL freight and explore how ACME Logistics has emerged as a leader in this space, providing businesses with cost-effective and efficient shipping solutions.
What is LTL Freight?
LTL stands for “Less Than Truckload,” and it refers to a shipping method designed for transporting shipments that are larger than parcels but not hefty or sizable enough to warrant a full truckload. LTL shipments don’t monopolize an entire truck, which means that available space on the truck is often shared by shipments from various shippers or carriers.
To understand LTL freight more comprehensively, we can quantify it in terms of freight class weight categories, typically ranging from 150 to 15,000 pounds. These categories correspond to various designations in the National Motor Freight Classification (NMFC) system, which comprises 18 classes numbered from 50 to 500. Generally, lower classes signify easier and less expensive shipments. For example, a freight class of 50 typically applies to durable freight that fits comfortably on a standard 4′ x 4′ pallet and weighs at least 50 pounds per cubic foot.
It’s essential to note that the freight class listed on the bill of lading for truckload shipments depends on multiple factors, including weight, density, stowability, ease of handling, and liability. To accurately determine a freight class, all of these factors must be taken into account.
LTL vs. FTL Freight and Parcels
LTL shipping involves shipments that do not occupy an entire trailer and usually falls within freight class categories of 150 to 15,000 pounds. In contrast, Full Truckload (FTL) shipping deals with shipments that fill an entire trailer and typically exceed 15,000 pounds in weight. On the opposite end of the spectrum, parcels encompass smaller shipments, typically up to 150 pounds, that require no special means of storage, transport, or handling.
The primary distinctions between LTL freight shipping, FTL shipping, and parcels are based on the amount of trailer space needed and weight considerations.
Pros and Cons of LTL Freight Shipping
LTL freight shipping offers several advantages but also comes with some potential drawbacks. Let’s explore both sides of the coin.
Benefits of LTL Freight Shipping:
- Cost Sharing: One of the most significant advantages of LTL shipping is that you share space and shipping costs with other shippers, which can result in lower overall shipping expenses compared to other truckload methods.
- Palletization: LTL shipments can typically be loaded onto pallets, offering better protection against damage compared to shipments comprising multiple smaller units.
- Access to Services: LTL carriers often provide additional services like inside pickup and delivery and liftgates, expanding your shipping options.
Drawbacks of LTL Freight Shipping:
- Size and Weight Restrictions: LTL shipping is only suitable for items that exceed parcel size and weight but don’t require a full truckload. Very small, very heavy, or bulky items may require alternative truckload methods.
- Additional Fees: Cost savings from sharing truckloads can be offset by surcharges and service charges, making LTL shipping less cost-efficient for some shipments.
Determining LTL Shipping Rates
LTL shipping rates are determined by a variety of factors, including:
- Distance: The distance the truck must travel to reach its destination.
- Freight Class: Based on weight per unit of volume, ease of storage, handling, and liability risk.
- Special Handling: Whether the shipment requires special handling, such as fragile packages, perishables, or hazardous materials.
- Additional Services: Considerations like collecting a digital proof of delivery or expedited delivery.
These variables collectively influence the cost of LTL shipments.
Reducing LTL Shipping Costs
To mitigate the cost of shipping LTL, consider the following strategies:
- Partner with Other Businesses: Collaborate with other businesses to share shipment costs efficiently. Freight brokers can assist in finding suitable partners.
- Utilize Dispatch and Routing Software: Choose LTL providers that leverage dispatch and routing software to enhance efficiency and reduce last-mile delivery costs.
- Engage Third-Party Logistics Providers: Opt for third-party logistics providers that negotiate with LTL carriers on your behalf and employ logistics software to optimize LTL freight arrangements.
These approaches can significantly enhance the cost-effectiveness of LTL freight shipping.
When to Use LTL Shipments
LTL freight is ideally suited for shipping packages ranging from 150 to 15,000 pounds, provided they do not necessitate a full trailer. For businesses operating within these parameters, working with LTL carriers can be cost-effective, especially when arrangements with freight brokers or third-party logistics providers secure discounts on these services.
Why Technology is Critical for LTL Shipping Today
In the modern logistics landscape, technology plays a pivotal role in LTL shipping. LTL providers rely heavily on logistics technology, such as dispatch and routing software, to ensure on-time deliveries. This technology aids in efficient allocation of available truck space, route scheduling, and real-time notifications to drivers and customers, ultimately enhancing the customer experience.
Technology also empowers LTL customers. Freight brokers utilize online portals to help shippers find and compare carriers, simplifying the decision-making process.
Optimizing LTL Freight Shipping
Efficiency and cost-cutting are essential in LTL freight shipping. To optimize your LTL freight shipping, consider the following best practices:
- Key Metrics: Utilize key performance indicators (KPIs) to set goals, compare carriers, and measure the performance of your LTL shipments. KPIs could include cost per pound, on-time delivery rate, freight damage rate, and billing accuracy.
- Accurate Measurement: Accurate measurement and classification of your truckload freight are crucial to determine if LTL is the right choice.
- Compare Multiple LTL Services: Different service providers may offer varying prices, shipping speeds, and additional services. Compare multiple carriers to control costs and select the best fit.
- Proper Packaging: Ensure that LTL freight is packaged correctly to optimize efficiency and prevent damage.
- Accurate Documentation: Provide complete and accurate information on your LTL shipment documentation, including size dimensions, weight, freight classification, number of units, and declared value.
The Future of LTL Freight
LTL shipping, like the broader supply chain, is evolving towards increased complexity, sophistication, and efficiency to handle larger delivery volumes. To make the most of LTL shipping, accurately assess multiple carriers, monitor performance through delivery KPIs, and follow proper shipping processes. Collaborate with carriers that offer special services and prioritize a positive customer experience as they work to enhance delivery capacity and efficiency.
Frequently Asked Questions
What is the difference between LTL and FTL freight?
Full Truckload (FTL) shipping is suitable for freight that fills a full trailer and weighs over 15,000 pounds. In contrast, LTL freight refers to shipments that do not require a full truckload and typically weigh between 150 and 15,000 pounds. FTL may be preferable for certain types of perishable or fragile truckload freight.
Why is LTL Freight so expensive?
LTL shipping tends to be more expensive than FTL because it involves higher shipping costs for carriers. LTL carriers have to make multiple stops for each shipper they serve, leading to increased fuel consumption and handling time. This, along with higher driver costs, is factored into LTL freight rates, making them less cost-efficient than FTL options for carriers.
