What is LTL freight shipping?

Less-than-truckload (LTL) freight shipping is a transportation method where multiple shippers share space on the same truck. Instead of booking an entire truck, each shipper pays only for the space their cargo occupies. LTL is ideal for shipments too large for parcel carriers but too small to fill a full truckload, typically ranging from 150 lbs to 15,000 lbs.

What is freight class and how does it affect LTL shipping costs?

Freight class is a standardized classification system (NMFC) that groups commodities into 18 classes from Class 50 to Class 500 based on four characteristics: density, stowability, handling difficulty, and liability. Higher freight classes indicate lower-density, harder-to-handle, or more liability-prone shipments and result in higher LTL rates. Accurate freight classification is critical to avoid reclassification fees.

What is a bill of lading (BOL) in freight shipping?

A bill of lading (BOL) is a legal document issued by a carrier that serves as a receipt for freight, a contract of carriage, and a document of title. It specifies the type, quantity, and destination of the goods being transported. The BOL must accompany the shipment and is required for the carrier to pick up, transport, and deliver freight legally.

LTL Freight Terms: Freight Class, BOL, Pallet & More

What Is LTL Freight?

LTL (Less Than Truckload) freight shipping is a method of transporting cargo that does not fill an entire truck trailer. In LTL shipping, multiple shippers’ goods share space on the same trailer — each shipper pays only for the portion of the truck their freight occupies. This makes LTL cost-effective for shipments too large for parcel carriers (typically over 150 lbs) but not large enough to warrant a full dedicated truckload.

LTL is the standard shipping method for palletized freight, manufacturing components, and B2B shipments in the 150 to 10,000 lb range. Major LTL carriers in the United States include XPO Logistics, Old Dominion Freight Line (ODFL), ABF Freight, Estes Express, and UPS Freight.

LTL vs. Truckload (FTL): Key Differences

Truckload (FTL) freight means a single shipper contracts the entire truck for one shipment. The truck travels directly from origin to destination without stops to pick up or drop off other freight.

LTL shipment size: 150 lbs to approximately 10,000 lbs (1 to 6 pallets)
Truckload size: 10,000 lbs+ or full trailer
LTL pricing basis: Per hundred weight (CWT) times freight class
Truckload pricing: Per mile or flat rate
LTL transit time: 2 to 5 days typical (multiple terminal stops)
Truckload transit: 1 to 3 days typical (direct delivery)
LTL handling: Freight handled at multiple terminals, higher damage risk
Truckload handling: Loaded once, unloaded once, lower damage risk

Freight Class (NMFC)

Freight class is an LTL pricing classification system established by the National Motor Freight Traffic Association (NMFTA) and codified in the National Motor Freight Classification (NMFC). There are 18 freight classes ranging from Class 50 (cheapest) to Class 500 (most expensive).

Freight class is determined by four factors: density (weight per cubic foot), stowability (how easily it loads), handling (fragility or special equipment needed), and liability (value and risk of damage or theft). Dense, easy-to-handle freight earns lower classes; light, bulky, or fragile freight earns higher classes.

Misclassification leads to carrier-applied reclassifications and unexpected additional charges. Working with a logistics consultant to review your NMFC classifications can reduce reclassification fees significantly.

CWT (Hundredweight) and MWT (Multiweight) Pricing

CWT (hundredweight) pricing is the standard rate structure in LTL shipping. The base rate is expressed as a price per 100 lbs of freight. A 500 lb shipment at $25.00/CWT costs $125.00 before accessorials. CWT rates vary by freight class, lane (origin/destination pair), and negotiated carrier discount.

MWT (Multiweight) pricing applies when multiple LTL shipments moving on the same day to the same destination are combined and rated as a single shipment. This can reduce per-unit shipping costs significantly when a shipper regularly sends multiple pallets to the same consignee on the same day. MWT is a negotiated contract provision, not available by default.

Bill of Lading (BOL)

The Bill of Lading (BOL) is the primary shipping document in freight transportation. It serves three functions: a contract of carriage between the shipper and carrier, a receipt confirming the carrier picked up the freight, and a document of title for the goods being shipped.

A properly completed BOL includes: shipper and consignee information, origin and destination addresses, freight description (commodity, NMFC class, number of pieces, weight), special handling instructions, and payment terms (prepaid or collect). Errors on a BOL can lead to delivery delays, mis-rating, and disputes over damage claims.

Freight Forwarder

A freight forwarder is an intermediary that arranges the transportation of freight on behalf of a shipper. Freight forwarders do not typically own trucks or aircraft — instead, they contract with carriers, consolidate smaller shipments, and manage the logistics of moving freight from origin to destination. They provide value through carrier relationships, rate access, and documentation expertise, especially for international shipments requiring customs clearance.

Pallet vs. Skid

These terms are often used interchangeably, but there is a structural difference:

Pallet: A flat transport structure with both a top deck (where freight sits) and a bottom deck (allowing four-way forklift entry). Standard North American pallet dimensions are 48″ x 40″.
Skid: A similar structure with only a top deck — no bottom deck. Skids are cheaper and easier to drag, making them practical for heavy machinery that does not need to be lifted from below. Skids only allow two-way forklift entry.

Loading Dock Requirements

A loading dock is a raised platform that aligns with the height of a truck trailer (typically 48″ to 52″), allowing freight to be rolled or forked directly from the dock into the trailer. LTL carriers assume dock availability at both pickup and delivery locations and price their rates accordingly.

Shipments requiring liftgate service (a hydraulic platform that lowers freight to ground level) incur additional liftgate fees, typically $50 to $100+ each. Shippers without docks should communicate this when booking LTL shipments to avoid delivery failures and unexpected charges.

Intermodal Freight

Intermodal freight uses two or more transportation modes — typically truck and rail — for a single shipment, with the freight staying in the same container throughout. Intermodal is most cost-effective for long-haul domestic shipments (1,000+ miles) where rail’s lower cost per mile offsets the time required for terminal transfers. Intermodal transit times are typically 1 to 3 days longer than truckload for comparable lanes, but rates can be 10 to 20% lower on high-volume lanes.

Freight Collect vs. Prepaid

Prepaid: The shipper pays transportation charges at the time of shipment. The most common arrangement for standard commercial shipping.
Freight Collect: The consignee (receiver) is responsible for paying transportation charges upon delivery. Common in vendor compliance programs where retailers require suppliers to ship on the retailer’s account.

FAK (Freight All Kinds)

FAK (Freight All Kinds) is a negotiated contract provision where multiple freight classes are rated as a single, agreed-upon class regardless of actual commodity classification. FAK agreements simplify billing and reduce reclassification risk. For example, a shipper might negotiate a FAK agreement where all shipments are rated at Class 70, regardless of whether individual items would normally rate at Class 85 or Class 100.

How Shipware Optimizes LTL Contracts

LTL contracts are highly negotiable, but most shippers lack the market data and carrier relationship leverage to extract optimal terms. Shipware’s LTL contract optimization service brings former carrier pricing executives to your negotiations, with benchmarking data across hundreds of LTL lanes and shipper profiles.

We analyze your current freight class distribution, lane mix, carrier discounts, and accessorial exposure to identify specific contract improvements. Our clients typically achieve 15 to 25% LTL cost reductions without changing carriers or service levels.

Request a free LTL cost analysis to see what better contract terms could mean for your freight spend. Explore our shipping optimization solutions or return to the full shipping glossary.

LTL Freight Shipping Terms: The Complete Glossary