If you’re a shipper with occasional or regular shipping needs that are too small for a full truck but a little too big for parcel carrier service, you can consider an LTL shipment. What does LTL stand for? Less than truckload. While the name is simple, understanding the differences between parcel service, a smaller shipment like LTL freight, and a full truckload is more nuanced. We’ll explore all you need to know about LTL freight shipping here.

What does LTL mean in freight?

What is LTL freight? You already know that it means less than truckload shipping, but that’s not a complete explanation. LTL shipping is used to transport smaller shipments that usually start at 150 pounds and can rise to 2,000 pounds, 10,000 pounds, or even 15,000 pounds, depending on who is defining it. These shipments can also be determined by how many pallets or linear feet the shipment encompasses. Some say that LTL shipments should be between 1 and 6 pallets, or even up to 14 pallets,  using up to 12-14 linear feet in a truck.

Since a shipper is only using a partial truckload or trailer, an LTL carrier books shipments from multiple shippers. To make this work for the LTL provider, they use a hub and spokesmodel. The hub can be a distribution center or central terminal, with smaller warehouses or local terminals as the spokes. The freight might start at the hub, with delivery to a local terminal. The inventory on the pallets may then be divided up and sent on its way in smaller shipments, or it’s available for pick-up by the shipper. Since multiple shippers may send their freight with an LTL freight carrier, more stops and more loading and unloading can occur.

What are LTL and FTL freight?

LTL vs FTL: Not surprisingly, if LTL is less than truckload, FTL shipping is full truckload. An FTL shipment takes up the entire trailer, either in space or by weight limit, so no other shippers have their goods on board.

FTL is thought to be a better option for shippers who want to rely on regular shipments where they have greater control over the timing, cost, and availability. Both LTL freight service and FTL freight usually move freight on the road, though some LTL service uses rail shipping as well. They rely on the same semi-trucks with professionally licensed drivers. And both usually do freight shipping with pallets.

Here’s one big difference with FTL shipping: the shipper loads their pallets at their origin, and the driver delivers the pallets to the destination. The driver may stop as needed for breaks, but the freight is not unloaded and reloaded during the trip, unless there’s a problem. The driver goes straight to the destination. That means the delivery usually takes less time than it would with an LTL freight shipment, and it can be less complex to plan and coordinate.

Benefits and challenges of LTL service

LTL is a great option compared to parcel service when the cargo weighs more than 150 pounds per box. The shipper may not want to break the shipments down into smaller boxes or packaging. Instead, the shipper can stack a pallet with numerous boxes or parcels and then shrink wrap the contents. Not only can this save on some shipping costs, but it reduces the chances that the boxes will be damaged or lost in transit.

An LTL solution can usually also offer more services than an FTL solution. That might include lift gate service, freeze protection, residential and/or inside delivery, notification of delivery, tracking by bill of lading number or shipment reference number, and some other options too. 

LTL services may be less expensive than FTL if the LTL shipper would need to otherwise pay for the entire truckload. Some also like that it is more environmentally friendly than using an entire truck to transport less cargo than can fill it. 

While the LTL shipping method is a great solution in many cases, there are some challenges to keep in mind. One LTL freight shipment challenge is the tradeoff between a potentially lower shipping cost and a longer delivery time. Since multiple shipments use the same truck and service, the truck will be making more than one stop as it loads and unloads the various goods. Shippers that can plan ahead and have that flexibility can benefit from these lower costs.

Another challenge is that the cargo is handled more frequently as a result of the repeated loading and unloading by the LTL freight company, whereas FTL cargo remains in the trailer the entire time. It’s important to pack the freight carefully to account for additional handling.

Determining LTL freight rates and finding a freight carrier

Many factors make up the LTL shipping rates quoted for the less than truckload shipment. Here are some to consider:

Freight class and weight: The weight and LTL freight class are important determinants of quoted rates. Freight class can be more important in LTL shipping because there are other shipping companies using the service as well, so the goods are in the same truck.

Distance: Not surprisingly, it can cost more to ship a longer distance than a shorter one.

Fuel price: Fuel surcharges are as common in truckload freight as they are with parcel carriers. The cost is tied to the price of fuel.

Season: The season can impact LTL rates, just as it can parcel rates. The winter holiday season may be higher than the spring, for example. It can also be more expensive in winter due to weather issues, which can slow down the trucks.

Guarantees and speed: A shipping service may have different service levels, giving you guaranteed or faster service. The faster the service, the more it will cost.

Accessorial fees: Just as with parcel carriers, LTL carriers may charge for accessorial fees such as using a lift gate, inside pick-up and delivery, limited access to the location, and freeze protection.

You can save on your costs by correctly measuring the dimensions and ensuring the pallets are within standard sizing. Otherwise, the carrier may adjust the fee after the pick-up. Also, ensure that your documentation is correct and accurate, including the bill of lading. Protect your inventory and pallets by wrapping them well, with heavy items on the bottom. Insurance may cover costs for items damaged or lost in transit, but it’s faster and cheaper to have everything arrive in great shape.

There are many ways to find logistics carriers for your LTL shipping needs. You can base it on using known local, regional or national carriers. You may already have relationships with a local carrier, which covers a smaller area, maybe within 100 miles. A regional carrier covers a larger area and often has more trucks and may work with other carriers as well. National carriers like UPS Freight and FedEx Freight cover the entire range of shipping needs, from parcel to freight shipping. They have multiple options, including expedited or economy service, and they may be in a better position to accept non-palletized cargo than some other carriers.

Finding an LTL carrier to meet your needs can be difficult. Some shippers use a transportation management system to provide access, guidance, and quotes. But a freight broker can do this as well. Freight consolidators bring together cargo from multiple shipping companies for a complete truckload. 

Other ways to save on LTL shipping

A company like Shipware can help you optimize your carrier contracts and recover any erroneous invoicing fees. Reevaluating your carrier choice should be done regularly, and that can include all aspects of shipping services, from parcel to LTL to FTL. Shipware’s experts come from the carrier side and know what elements of a carrier contract can be negotiated, and by how much. Using proprietary benchmarking data, Shipware can help structure a contract and help you negotiate that contract that is fair to you and the carriers.

Each shipping or trucking company has its own characteristics that affect its contracted prices. Using the benchmarking data as well as a deep dive into the shipper’s own data, the Shipware experts can devise a unique negotiating plan for specific discounts, and the optimal contract terms for your company. Even small businesses can benefit from the contract optimization service. Customers typically save up to 30% on their annual shipping costs with our services.

Another option is Shipware’s invoice audit recovery program, which usually saves clients 1% to 9% of their total invoices. Carriers, whether LTL, FTL, or parcel, often make mistakes in their invoicing. It can be an incorrect accessorial fee, missing a service guarantee, or another type of mistake. Shipware’s automated invoice recovery service spots these errors and applies for credit on behalf of the shipper. Any eligible refund is directly deposited into the client’s account. The shipper doesn’t have to do anything, and the program runs in the background. The service costs nothing out-of-pocket. Shipware only collects payment if your company recovers money from carrier mistakes.

LTL shipping is a great way to save money on your shipping needs, but it’s only part of the puzzle. To learn more about optimizing your contracts and the invoice recovery service, please contact us at (858) 879-2020.