4 Key Benefits of LTL Shipping for Your Business

Managing supply chain logistics is a constant balancing act. You need to keep inventory moving, meet customer delivery expectations, and control operational costs. Waiting to accumulate enough freight to meet a 10,000-pound minimum for a full truckload can throw this entire system out of sync. It ties up valuable warehouse space, complicates production schedules, and can lead to frustrating delays for your customers. Less Than Truckload (LTL) shipping provides a solution by decoupling your shipping schedule from your freight volume. The operational benefits of LTL shipping go beyond simple cost savings; they create a more agile and responsive fulfillment process from the ground up.

Supply chain logistics and shipping operations are difficult enough to oversee without waiting for the size or weight threshold of entire trucks to be met. Unfortunately, with “full truckload shipping” (FTL), that’s the situation you’re stuck with managing. In contrast, “Less than truckload” (LTL) shipping provides planning flexibility and cost savings while reaping greater peace of mind for your logistics operations. Here, we’ll explore some of the benefits of LTL shipping and their broader impact.

What is the Purpose of LTL Shipping?

LTL is a solution developed by shipping companies to streamline logistics for businesses that don’t move full truckloads of freight frequently. FTL shipping generally requires a load weighing at least 10,000 lbs., which many businesses cannot readily meet. Still, customers generally assume their orders will be quickly delivered—often regarding the estimated shipping times displayed during online checkout as absolute. This forces companies to balance those expectations and customer satisfaction against their cost efficiencies when overall order volumes slowly reach full-truck capacity. Do you wait until reaching 10,000 lbs. of cargo and risk delivery delays? Or do you pay for unused cargo space to ensure the items are on their way? You can bypass both options with LTL, which businesses can leverage for transporting heavy singular items or quantities that fall between FTL and parcel shipping. The difference between LTL vs parcel and FTL is that with LTL freight shipping, multiple companies’ freight loads are combined to fill the entire truck. Consolidating your items with this solution allows businesses to collectively reach FTL shipping thresholds easily and at any time.

How the LTL Hub-and-Spoke Model Works

To understand how LTL shipping remains so efficient, it helps to visualize the “hub-and-spoke” model that most carriers use. Think of it like an airline’s route map. Your shipment is first picked up and taken to a local terminal. From there, it’s consolidated with other shipments and transported to a larger, central distribution center—the hub. At the hub, all the freight is sorted and re-consolidated onto new trucks heading toward the final destinations. These routes from the hub to smaller, regional terminals are the spokes. This system allows carriers to build dense, efficient routes, reaching more places without sending half-empty trucks across the country. As Inbound Logistics explains, this method is key to making the entire network function smoothly and cost-effectively.

Typical LTL Shipment Weight Range

So, what’s the sweet spot for an LTL shipment? Generally, LTL is the go-to option for freight that weighs between 150 and 15,000 pounds. This is the zone where a shipment is too large or heavy for standard parcel services but doesn’t fill an entire truck. According to logistics resource Geotab, these shipments are typically loaded onto pallets for easier handling and transport. This weight range covers everything from a few pallets of inventory heading to a retailer to a single large piece of equipment for a customer. Understanding this range is the first step in effective modal optimization, ensuring you’re not overpaying for FTL when you don’t need it or trying to force a large shipment through the parcel system.

What are the Benefits of LTL Shipping?

The most apparent benefit of LTL shipping is the ability to immediately schedule cargo transportation. But beyond that, what other advantages can companies realize with LTL? The benefits of LTL include:

1. Faster turnaround – FTL is often quicker if you have the full freight load ready, but it can significantly slow down total fulfillment timelines. The longer items are stockpiled and shipments are delayed, the more complications your business experiences:
   • Successful transportation and logistics heavily depend on efficient throughput. Waiting to meet FTL freight shipping minimums reduces your usable warehouse space or requires you to increase square footage, driving up operating costs.
   • Your production process doesn’t have to factor in shipping and logistical constraints related to delivery.
   • Items with limited use or consumption timelines (e.g., perishable food) don’t risk sitting past expiration dates.
   • Shipping delays negatively impact your customers’ satisfaction, leading to a poor reputation and reviews that further impact future sales.
2. More efficient shipping spend – Paying for unused cargo space when using FTL quickly drives up your shipping costs. When multiple businesses combine freight, it becomes less expensive to ship to lower-volume destinations that can otherwise increase rates.
3. Lower per-shipment rates – By consolidating your cargo with other companies, LTL shipment carriers can more easily provide better rates. Effectively, FTL volumes and pricing are always available for transporters via combined loads.
4. More environmentally friendly – Every truck’s shipment consumes fuel and emits exhaust. With LTL shipping, you can reduce the related environmental effects because: 
   • More regular transportation activity allows LTL shippers to optimize routes for the greatest efficiency.
   • Less unused cargo space with LTL shipment not only results in lower costs, but your environmental impact per goods transported also decreases.
   • LTL helps reduce the total number of on-road trucks that the industry requires to meet shipping demand.
5. Outsourced logistics management – Small and medium-sized businesses may not staff a large or full-time logistics team (or have dedicated personnel at all). Partnering with LTL shippers augments your team with experienced professionals that oversee the cargo on each truck.
6. Increased access to shipping technologies – Businesses want peace of mind from knowing where their packages are. Between tracking technologies and re-scanning items during load consolidation, they gain greater visibility with LTL options.
7. Better protection and security – Whenever LTL cargo is consolidated, the shipper will repack the truck with the safest configuration to protect the load and ensure your packages are secured. Each stop functions as another check-in on the cargo.

The benefits of LTL shipping expand beyond making delivery immediately available for companies unable to meet FTL minimums with high regularity—it can also help optimize your entire operation while substantially reducing costs.

Flexibility and Scalability for Growing Businesses

Your business isn’t static, so why should your shipping strategy be? Demand fluctuates with seasonality, market trends, and your company’s growth. LTL shipping is built to handle these changes. Whether you’re navigating a holiday rush or a slower period, LTL can adjust to your needs without forcing you to commit to a full truck. This means you don’t have to delay shipments while waiting to fill a trailer, nor do you have to pay for empty space when volume is low. This adaptability is crucial for scaling your operations efficiently, allowing you to maintain momentum and keep customer satisfaction high, no matter what your sales charts look like. It’s a smart way to reduce high-volume shipping costs without sacrificing speed or service quality.

Access to Wide Carrier Networks

Reaching customers wherever they are is key to expanding your market. LTL carriers operate on extensive networks, often using a hub-and-spoke model to deliver freight to a vast number of locations, including those in remote or less-trafficked areas. This gives your business the power to reach new customer bases without the headache of building out a complex, private logistics network. Tapping into these established routes means you can confidently serve a broader audience. Of course, more carrier options can also mean more complexity. That’s why a strategy for carrier diversification is so important; it ensures you’re not just reaching more places, but doing so with the right partners at the best possible rates, turning wider access into a true competitive advantage.

Availability of Special Services

Not every shipment is a simple dock-to-dock delivery. Sometimes, your freight requires special handling to ensure it arrives safely and conveniently for your customer. LTL carriers offer a suite of special services, often called accessorials, to meet these unique needs. These can range from temperature-controlled transport for sensitive goods to hazardous materials handling. These value-added services allow you to customize your shipping process, providing a better experience for your end customer. However, these services come with additional fees that can quickly inflate your shipping spend if not managed properly. Understanding which services you truly need and negotiating their costs within your carrier contract is essential for keeping your budget in check while meeting specific delivery requirements.

Liftgate Service

What happens when you’re shipping a heavy pallet to a location without a loading dock, like a small retail shop or a residential address? That’s where liftgate service becomes a necessity. A liftgate is a hydraulic platform at the back of the truck that lowers freight from the trailer to the ground, making it possible to unload heavy items safely and easily without a forklift or dock. This service is crucial for preventing potential injuries and avoiding damage to your products during delivery. While it’s an invaluable option for final-mile deliveries to non-commercial locations, it is an accessorial charge. It’s important to track these fees and ensure they’re applied correctly, as errors can and do happen. An invoice audit and recovery process can catch these mistakes, saving you money.

Inside Pickup and Delivery

For shipments that require a bit more hands-on attention, inside pickup and delivery is the perfect solution. This service goes beyond the standard curbside drop-off, as the carrier’s driver will move the freight across the threshold of the building for either pickup or delivery. This is especially useful when shipping high-value equipment to an office, delivering supplies to a specific department within a large facility, or for any scenario where the recipient may not be able to move the freight themselves. It adds a layer of convenience and white-glove service that can significantly improve the customer experience. Just like other special services, this comes at an additional cost, so it’s important to factor it into your shipping budget and use it strategically for shipments where it adds the most value.

Assistance with Regulatory Compliance

Navigating the web of shipping regulations can be a full-time job in itself. From proper documentation and labeling for hazardous materials to cross-border customs paperwork, there’s a lot to manage. LTL carriers are well-versed in these transportation rules and can be a vital partner in helping your business remain compliant. They handle much of the necessary paperwork and ensure that shipments adhere to federal and state regulations, which simplifies the entire process for you. This partnership helps you avoid the risk of costly fines, shipment delays, and legal issues that can arise from non-compliance. By leaning on your carrier’s expertise, you can free up your team to focus on core business activities, knowing your freight is moving correctly and legally through the supply chain.

Is LTL Better than FTL?

Whether LTL or FTL is the right shipping choice depends on the volume and weight of the items you’re loading, along with how often you fill the trucks. FTL shipments are usually delivered faster from the pickup time and with lower costs (particularly for high-volume destinations). Directly transporting from location A to location B does have its advantages. But achieving those benefits requires your business to move FTL-sized shipments on a regular schedule. So it comes down to the impact of FTL shipping on your overall operations—the least expensive and most efficient option isn’t beneficial anymore if it produces a net negative.

Is LTL Better than FTL?

Whether LTL or FTL is the right shipping choice depends on the volume and weight of the items you’re loading, along with how often you fill the trucks. FTL shipments are usually delivered faster from the pickup time and with lower costs (particularly for high-volume destinations). Directly transporting from location A to location B does have its advantages. But achieving those benefits requires your business to move FTL-sized shipments on a regular schedule. So it comes down to the impact of FTL shipping on your overall operations—the least expensive and most efficient option isn’t beneficial anymore if it produces a net negative. If your business is continually running into complications because your freight loads slowly accumulate in a warehouse bay as you await the 10,000 lb. FTL minimum, then LTL options offer substantial benefits.

Understanding the Cost Crossover Point

The primary benefit of LTL shipping is its cost-effectiveness for shipments that are too large for parcel but too small for a full truck. Because the cost of the truck is shared among multiple shippers, each business pays a lower rate than they would for an exclusive truck. The key is identifying the “crossover point” where LTL becomes the most economical choice. This typically happens when a shipment exceeds the size and weight limits for parcel carriers (usually around 150 pounds) but doesn’t meet the 10,000-pound threshold for FTL. Understanding this balance is fundamental to modal optimization, ensuring you’re not overpaying for parcel surcharges or for empty space in a half-full truck.

If speed is your absolute top priority, LTL might require some planning. Since trucks make many stops to pick up and drop off different shipments, LTL freight can take longer to arrive than a full truckload. A shipment might travel from a local terminal to a regional hub, be sorted, and then loaded onto another truck heading toward its final destination. Each of these stops adds time to the overall journey. You need to factor this extra time into your delivery estimates to manage customer expectations and maintain a smooth supply chain. For time-sensitive freight, you may need to consider expedited LTL services or other shipping modes.

Higher Risk of Damage from Frequent Handling

The LTL process involves moving freight on and off several trucks and through multiple terminals. This frequent handling, combined with sharing space with other cargo, can increase the chance of your goods getting damaged. Unlike FTL, where your shipment is loaded once and unloaded at the destination, LTL freight is touched at each consolidation point. This makes proper packaging absolutely critical to protect your products. It also highlights the importance of understanding your carrier’s liability coverage and having a clear process for filing claims if damage does occur, which can be a key point in carrier contract negotiations.

Complex Pricing Structures

Figuring out the final cost of an LTL shipment can be tricky. Unlike the straightforward pricing of a parcel shipment, LTL rates are determined by a combination of factors, including freight class, weight, density, and various accessorial fees for services like liftgates or residential delivery. This complexity can make it difficult to forecast your shipping spend accurately and can sometimes lead to unexpected charges on your invoice. These variables are why many high-volume shippers work with experts to audit freight invoices and negotiate clearer, more favorable pricing terms with their LTL carriers.

LTL vs. Parcel Shipping

For many businesses, the choice isn’t just between LTL and FTL; it’s between LTL and parcel shipping (think UPS or FedEx). While both methods are used for smaller shipments, they are designed for very different types of freight. Parcel carriers excel at moving small, individual boxes through a highly automated system of conveyor belts and sorting facilities. LTL, on the other hand, is built to handle larger, heavier, and palletized goods that don’t fit into the parcel network. The decision to use one over the other often comes down to size, weight, and the number of items you’re sending to a single location.

Fewer Size and Weight Limits

One of the clearest advantages of LTL is its ability to handle items that parcel carriers simply can’t. Parcel services have strict limits on size and weight because packages need to be compatible with their automated systems and be manageable for a single driver to lift. LTL can easily accommodate large, heavy, or irregularly shaped items, especially when they are secured to a pallet. This makes it the ideal choice for shipping things like furniture, industrial parts, or multiple boxes that are consolidated into a single, larger shipment, helping you avoid the hefty oversize and overweight surcharges common with parcel carriers.

Ensuring All Packages Arrive Together

When you send a multi-box order via a parcel carrier, there’s a chance the packages could get separated in transit and arrive on different days. With LTL, all the items in a single shipment are typically palletized and travel together under one bill of lading (BOL). This means everything arrives at the destination at the same time. This consolidation not only simplifies the receiving process for your customer but also makes tracking much easier, as you only have one number to monitor instead of several. It creates a more predictable and professional delivery experience for larger orders.

Access to Personalized Customer Service

Navigating customer support with major parcel carriers often means dealing with a massive call center and a general 1-800 number. LTL shipping can offer a more personal touch. Many LTL carriers provide you with a local contact at the terminal or even a dedicated account manager who understands your business and your specific shipping needs. This direct line of communication can be invaluable when you need to resolve an issue, get a custom quote, or coordinate a complex pickup. It’s a level of service that is often hard to find in the high-volume world of parcel shipping.

How LTL Costs are Calculated

LTL pricing is a blend of several interconnected factors, which is why it can seem so complex at first glance. Unlike a simple rate chart, LTL carriers use a detailed formula to determine the cost of each shipment. The final price depends on how much space your shipment occupies, the type of items you’re shipping (known as freight class), and the distance it needs to travel from pickup to delivery. On top of these core components, carriers add fuel surcharges and any applicable accessorial fees. Gaining visibility into these cost drivers is crucial for managing your freight spend, which is why many businesses rely on a spend management portal to analyze their data.

Key Pricing Factors

Several key factors combine to determine the final price of your LTL shipment. Understanding each one is essential for managing your costs effectively and avoiding surprise charges on your invoice. From the physical characteristics of your freight to the distance it travels, every detail plays a role in the final calculation. Let’s break down the most important components that influence your LTL rates.

Weight and Dimensions

Accurate measurements are the foundation of LTL pricing. The carrier needs to know the precise weight and dimensions of your shipment to calculate its density and determine how much space it will take up in the truck. If the information you provide is incorrect, the carrier will reweigh and re-measure the freight, leading to billing adjustments and unexpected fees. Always provide exact figures on your Bill of Lading (BOL) to ensure accurate pricing and avoid costly corrections. This simple step helps build a good relationship with your carrier and keeps your invoices predictable.

Freight Class

Every item shipped via LTL is assigned a freight class, a standardized number from 50 to 500 set by the National Motor Freight Traffic Association (NMFTA). This class is based on four characteristics: density, stowability, handling, and liability. A dense, sturdy item like steel bolts would have a low class (e.g., 50), making it cheaper to ship. Fragile, low-density items like ping pong balls would have a high class (e.g., 500) and cost more. Using the wrong freight class is a common mistake that leads to billing errors, making invoice auditing an essential practice for LTL shippers.

Distance

As you might expect, the farther your freight needs to travel, the more it will cost. LTL carriers calculate this based on the origin and destination zip codes, a pairing often referred to as a “lane.” The base rate for a shipment is heavily influenced by the distance of its lane. Carriers have different strengths in different regions, so a carrier that offers great rates for a 500-mile shipment in the Southeast might not be the most competitive for a cross-country shipment. This is why diversifying your carrier mix can be a powerful cost-saving strategy.

Fuel Costs

Fuel surcharges are a standard part of LTL shipping and can represent a significant portion of your total bill. This fee is added to the base rate to help carriers manage the fluctuating cost of diesel fuel. The surcharge is typically calculated as a percentage of the base rate and changes weekly based on the National U.S. Average price of diesel published by the Department of Energy. Because this is a variable cost, it’s an important factor to consider when forecasting your shipping budget and a key area to address during contract negotiations.

Best Practices for LTL Shipping

Successfully managing LTL shipping is about more than just finding the lowest rate. It’s about establishing efficient processes that prevent problems before they start. By following a few key best practices, you can reduce the risk of damage, avoid unexpected fees, and build stronger relationships with your carriers. These simple habits can transform LTL from a complex cost center into a reliable and efficient part of your logistics operation, helping you protect your bottom line and keep your customers happy. These steps are foundational for any business looking to reduce distribution and fulfillment costs.

The Importance of Good Packaging

Given that LTL freight is handled multiple times in transit, strong packaging is your first line of defense against damage. It’s crucial to use durable materials and secure your items properly, preferably on a sturdy pallet. Use shrink wrap to keep all boxes together, and place clear labels on each side of the pallet. This not only helps protect your items from damage but also prevents them from getting lost or separated at a terminal. Investing a little extra in proper packaging can save you from the significant costs and headaches associated with filing damage claims.

Providing Accurate Shipment Information

Accuracy is everything in LTL shipping. Always provide the correct details about your shipments on the Bill of Lading (BOL), including the exact weight, dimensions, and freight class. Double-checking this information before the carrier arrives can prevent most common billing issues, such as reweigh and reclassification fees. Being a shipper that consistently provides accurate information helps you build a reputation as a reliable partner, which can lead to better service and stronger relationships with your carriers. It’s a simple practice that avoids extra costs and operational friction.

Using Freight Consolidators for Lower Volumes

If your shipment volumes don’t consistently meet LTL minimums, using a freight consolidator or a third-party logistics (3PL) provider can be a smart move. These companies specialize in combining freight from multiple smaller businesses to create larger, more attractive shipments for LTL carriers. This allows you to benefit from lower, high-volume shipping rates that you wouldn’t be able to secure on your own. Partnering with a 3PL can be an effective way to access better pricing and expertise, especially for businesses looking to scale their shipping operations without adding internal headcount.

Realize the Benefits of LTL Shipping with Shipware

With the many benefits of LTL shipping available, the biggest challenge is finding a transportation partner and shipping services. And connecting you with LTL freight shipping partners is one of the myriad shipping and logistics solutions that Shipware provides. Between our 3-in-1 platform and managed transportation solutions, you can start supercharging your supply chain and delivery. The Shipware ecosystem provides a spend management solution, an integrated network of reliable shipping partners, and greater visibility into every dollar spent. Ready to discover the best ecommerce shipping solutions for you? Contact us today to start realizing the benefits of LTL shipping and our other solutions.   Sources:

1. SCM EDU. LTL Shipment. https://scmedu.org/ltlshipment/

Negotiating LTL Carrier Contracts

Once you’ve decided LTL is the right fit, the next step is securing the best possible rates. Carrier contracts aren’t set in stone; they are starting points for a conversation. Effective negotiation is your key to unlocking significant savings and ensuring the terms work for your business, not just the carrier’s. This involves more than just asking for a lower price. It requires a strategic approach grounded in data, market knowledge, and a clear understanding of your own shipping profile. By preparing thoroughly, you can move beyond standard rate cards and create a customized agreement that reflects the value of your business.

Leveraging Volume for Better Deals

One of the most powerful tools in your negotiation toolkit is your shipping volume. Carriers prize consistency and predictability. If you can demonstrate a steady stream of freight, they are far more willing to offer competitive pricing. Before you even approach a carrier, analyze your shipping data to identify patterns and forecast future needs. Committing a certain amount of your regular volume to a single carrier shows them you’re a valuable long-term partner, not a one-time customer. This commitment gives you significant leverage to negotiate better base rates, discounts, and more favorable terms on accessorial charges, which is essential to reduce high-volume shipping costs.

Benchmarking Discounts and Incentives

How do you know if the deal you’re being offered is actually a good one? The answer is benchmarking. You need to understand the prevailing market rates and what other shippers with similar freight profiles are paying. Without this context, you’re negotiating in the dark. Research potential carriers, understand their service offerings, and compare their pricing structures. Knowing the industry standards for discounts, fuel surcharges, and other incentives allows you to negotiate from a position of strength. Having access to benchmark discounts and incentives ensures you can confidently push back on initial offers and secure a contract that is truly competitive.

Auditing Invoices to Recover Costs

Signing a great contract is a major win, but the effort to control costs doesn’t end there. LTL invoices are notoriously complex and prone to errors. Without a systematic review process, you could be overpaying without even realizing it. Invoice auditing is the critical process of meticulously checking every bill against your negotiated contract to ensure accuracy. This isn’t just about finding the occasional mistake; it’s about establishing a system of accountability and recovering money that is rightfully yours. A consistent audit can uncover everything from incorrect freight classifications to misapplied accessorial fees, turning potential losses into tangible savings.

Identifying and Correcting Billing Errors

Billing discrepancies can appear in many forms, and each one chips away at your bottom line. Common errors include incorrect weight applications, wrong NMFC classifications, duplicate charges, and the failure to apply agreed-upon discounts. Because each contract can have unique terms, it’s vital to review invoices with a fine-toothed comb. Manually checking hundreds of invoices is not only tedious but also leaves room for human error. An automated invoice audit and recovery system can flag these errors instantly, ensuring you only pay for the services you actually received at the rates you negotiated. This process closes the loop on your cost-saving efforts, guaranteeing your hard-won contract delivers its full value.

Frequently Asked Questions

When is LTL the right choice over parcel or full truckload? Think of LTL as the perfect middle ground. If your shipment is too big or heavy for standard parcel carriers like UPS or FedEx (typically over 150 pounds), but you don’t have enough freight to fill an entire truck (usually under 10,000 pounds), LTL is your most cost-effective option. It allows you to ship palletized goods or larger items without paying for empty space on a full truck, keeping your inventory moving and your costs down.

My products are valuable. How can I minimize the risk of damage during LTL shipping? This is a great question because LTL freight is handled multiple times. Your best defense is solid packaging. Securely pack your items on a sturdy pallet, using high-quality boxes and protective materials inside. Then, tightly shrink-wrap the entire pallet to keep everything stable and together. Clear labeling on all sides also helps ensure it’s handled correctly. A little extra effort in packaging can save you from the major headache of filing a damage claim later.

What’s the single biggest mistake shippers make when it comes to LTL costs? The most common and costly mistake is providing inaccurate information on the Bill of Lading (BOL). Guessing the weight, dimensions, or freight class of your shipment will almost always lead to the carrier reweighing and reclassifying it, which results in unexpected and expensive fees. Always take the time to get precise measurements and classifications to ensure your initial quote matches your final bill.

Do I really need to pay for special services like inside delivery or liftgates? These services, called accessorials, are situational but can be essential. If your delivery location doesn’t have a loading dock or a forklift, you absolutely need a liftgate service to get heavy freight off the truck safely. Similarly, if the recipient can’t move the freight from the curb into their building, inside delivery is necessary. Use them strategically to ensure a smooth delivery and good customer experience, but be aware they come with extra fees.

Is it really worth the time to audit every single LTL invoice for errors? Absolutely. LTL billing is incredibly complex, and errors are far more common than you might think. From incorrect freight classifications to misapplied discounts and fuel surcharges, these small mistakes add up to significant overspending over time. A consistent audit process ensures you only pay for what you agreed to in your contract and helps you recover money that is rightfully yours. It’s a critical final step in managing your shipping spend effectively.

Key Takeaways

• Choose LTL for operational flexibility: Use Less Than Truckload shipping to align your fulfillment with your actual production schedule, freeing you from the need to wait and fill a full truck. This keeps your inventory moving and prevents warehouse bottlenecks.
• Proactively address LTL’s inherent risks: The hub-and-spoke model means more handling and potentially longer transit times. Mitigate these issues with durable packaging to prevent damage and by building buffer time into your delivery estimates to manage customer expectations.
• Take control of your LTL spend: LTL pricing is complex and invoices often contain errors. Secure the best rates by negotiating your contract with benchmark data, prevent billing adjustments by providing accurate shipment details, and consistently audit invoices to recover overcharges.