LTL Freight Shipping: What is it and How Does it Work?

keyKey Takeaways:
  • Less-than-truckload shipping involves the movement of goods that don’t need a full truckload for transportation. It is ideal for cargo weighing between 150 and 15000 pounds.
  • LTL freight offers reduced shipping costs, greater security, eco-friendly deliveries, higher flexibility, and transparent pricing.
  • Some proven LTL practices include regular audition of shipping rates, strengthening relations with carriers, dynamic routing, and carrier performance tracking.

Imagine this, you have just landed a substantial order to ship 4000 pounds of mosaic tiles to a construction site 100 miles away. Sounds great, isn’t it? 

But before you start celebrating, consider this: success is not about getting the order; it’s about delivering it successfully. And this is where the real challenge comes in. 

Parcel carriers in your region simply can’t handle the bulk of your shipment, and you certainly don’t want to pay for a full-capacity truck when your cargo won’t fill it to capacity.

Don’t fret; there’s a solution: less-than-truckload (LTL) freight shipping. It serves as a great choice for businesses looking to find the middle ground between parcel shipping and full truckload transportation.

Technavio’s latest research reveals that the less-than-truckload (LTL) market size is forecasted to grow at a CAGR of 7.3% by $120.31 billion between 2023 and 2028. This stat makes it evident that the LTL shipping industry is set to grow manifold in the years ahead.

The driving force behind this growth is the affordability and flexibility that LTL freight offers for dispatching frequent, small to mid-sized shipments.

The blog aims to provide a comprehensive understanding of what LTL freight entails and how it functions. It will delve into the numerous benefits it offers, the challenges it addresses, and the effective strategies that can enhance your LTL shipping experience.

What is LTL Freight?

A less-than-truckload (LTL) freight, as the name indicates, constitutes goods, cargo, or merchandise that don’t need a full truckload. The freight weight in LTL transportation ranges from 150 to 15000 pounds. Now, you know the meaning of LTL freight, so let’s check how it works. 

How Does LTL Freight Work?

LTL shipments are usually in the form of pallets that require only a portion of an entire truck. These smaller freight loads enable loading shipments from different companies on the same truck. In other words, LTL freight shipments aggregate partial loads to create a full multi-stop truckload.

6 Common LTL Shipping Services

Below are a few prominent shipping services in the LTL industry.

1. Standard

It is the most common type of LTL freight, suitable for general cargo that doesn’t need special equipment or handling. 

2. Expedited 

Expedited shipping provides faster transit times than standard LTL, which is ideal for time-sensitive shipments. 

3. Guaranteed

It provides a guaranteed delivery date and time appropriate for shipments with stringent deadlines. 

4. Liftgate

Liftgate

It is used for freight weighing over 100 pounds to provide a liftgate on the truck that helps load and unload heavy or bulky products. Liftgate service is useful, especially when the receiving location doesn’t have a dock to unload the shipment directly off a truck.

5. Inside Pickup and Delivery

Inside pickup and delivery involves an LTL carrier entering a building and assisting in freight loading/unloading, rather than at the dock. 

6. Residential

It includes freight shipping to and from residential addresses, typically homes or apartments. It addresses challenges such as limited access, parking restrictions, and congestion.

Moving forward, let’s understand the circumstances where LTL forms the ‘perfect’ fit.

When to Choose Less-than-Truckload Freight Shipping?

LTL freight shipping is ideal in the following situations:

1. Small shipments

When the volume of goods is not big enough to fill an entire truck, an LTL carrier can be suitable. LTL freight services enable the consolidation of shipments from multiple businesses and optimize transportation costs.

2. Local shipping

LTL freight transportation is a go-to choice for local or regional movement of goods. It implies that you can opt for it if your destination locations are not remote.

3. Limited storage

If your business has limited storage space, an LTL freight service can help ship smaller quantities more frequently. It, thus, reduces considerable storage needs.

4. Flexible delivery times 

If your shipments are not time-constrained and can accommodate flexibility in delivery times, you can go for LTL freight shipping. 

5 Benefits of LTL Freight Shipments

An LTL shipment is pivotal to a company’s supply chain management. It provides a cost-effective option to transport the freight volume lying somewhere between a parcel and a full truckload. fluctuations. It also helps boost transit security, keep track of shipments, and adjust load volumes as per demand fluctuations. Here is a detailed explanation of the benefits of shipping freight via LTL carriers.

1. Reduced shipping costs

Reduced shipping costs due to LTL freight shipping

LTL enables you to pay only for the space your freight occupies instead of an entire truckload. You can share the transportation costs of your goods with other companies that load their cargo in the same trailer. It helps you achieve significant cost savings on freight shipment, ensuring cost-effectiveness. 

2. Enhanced security

Freight companies often palletize most LTL shipments before they load them onto a truck. A well-packaged pallet is more secure than shipments with smaller handling units. It makes LTL freight shipping appropriate for fragile or delicate items. 

3. Lowered carbon footprint

MIT’s research reveals road freight accounts for 65% of the freight industry emissions.

The LTL industry consolidates multiple shipments and loads them onto a single truck. It reduces the carbon footprint compared to individual shipments on different trucks. It, thus, can pave the way to more sustainable or eco-friendly shipping. 

4. Real-time visibility

LTL carriers typically offer the Bill of Lading (BOL) number, Progressive (PRO) number, Purchase Order (PO) number, shipment reference number, and pickup date range. It helps track the location and status of your freight shipments. 

5. Higher Flexibility

Deploying LTL services relieves you of the need to wait until you prepare a full truckload of freight. It also helps increase or decrease the size of your shipments in response to production or demand fluctuation, providing greater flexibility.

Challenges of LTL Freight Shipping

While LTL may be a preferred choice among most businesses, it may also pose several challenges. They encompass increased transit times, constrained carrier capacity, pricing fluctuations, and documentation complexity.

So, let’s explore each of them more. 

1. Lowered delivery speeds

As LTL freight carriers contain cargo from different businesses, they traverse multiple nearby locations to deliver it. It takes them longer to deliver your freight, impacting delivery speeds

2. Freight class determination 

Determining the freight class for your cargo can be a complex job. A wrong freight class can result in billing disputes with your LTL service provider. 

3. Carrier capacity

As the carrier capacity is limited, you can accommodate only a finite amount of your cargo in a trip. Further, as shipment volumes increase during seasonal peaks, it may strain the carrier truck’s capacity, resulting in supply chain bottlenecks

4. Impact on pricing 

During seasonal demand surges and limited availability, carriers may ramp up LTL freight shipping rates or implement capacity-based surcharges. It may sometimes be an expensive affair, especially if you have a small business.

5. Documentation complexity

LTL shipments usually involve documents, including a Bill of Lading (BOL), Purchase Order (PO), and Progressive Order (PRO). In addition, international shipments involve customs clearance, making documentation an even more arduous job.

Given the challenges, the next section discusses the proven practices to streamline LTL shipping.

9 Effective LTL Shipping Practices to Follow

Optimizing LTL shipments has never been a cakewalk and takes time to master. However, you can follow a few proven practices for that. 

1. Audit shipping rates and practices 

Conducting a periodical audit of LTL freight rates is a must. It helps ensure you negotiate shipping charges with carriers to leverage competitive pricing as per market conditions. Further, you can review your services, determine the ones you don’t need, and save money by discontinuing them.

2. Build strong relations with potential carriers

It is essential to establish strong relations with LTL shipping carriers. This practice helps you gain preferential treatment or discounts during seasonal peaks.

3. Optimize your shipment density

You should strategically group items with similar characteristics, sizes, shapes, or weights to maximize trailer space and minimize costs.

4. Utilize dynamic routing

Deploying dynamic vehicle routing strategies is pivotal to accommodating changes in shipping needs, traffic conditions, or carrier availability. Integrating route optimization software can help achieve dynamic routing and boost your fleet efficiency. 

5. Conduct carrier performance reviews

Regular carrier performance reviews help assess their compliance with service level agreements. You can use reports & analytics to assess the performance of each route your carrier vehicles cover, enhance responsiveness to issues, and reinforce reliability 

6. Deploy shipment tracking automation 

‘State of Visibility Report 2023’ reveals:

77% of businesses consider real-time shipment visibility to be a must-have feature.

So, automating shipment vehicle tracking processes contributes to providing real-time visibility of consignments. It reduces the risk of errors and minimizes manual interventions.

7. Leverage supply chain visibility platforms

Implementing supply chain visibility platforms can help offer end-to-end visibility and analytics to identify inefficiencies and areas for improvement.

8. Benchmark performance

Benchmarking the performance of your LTL shipping operations against industry standards is essential to identify and work on areas of improvement. 

9. Hire consolidators

Unless you have significant LTL volume, you can’t consolidate your freight. However, you can look for LTL freight consolidation companies. They bring partial loads from various shippers into their consolidation centers to create full truckload freight. It provides a reliable and timely delivery for partial shipments. Although these warehouses are usually busy, freight handling is less frequent than a usual LTL load, preventing shipping damage and claims. 

In the following section, we’ll understand how to prepare an LTL freight.

10 Steps on How to Prepare an LTL Freight

Preparing LTL shipments includes steps to package, label, and document goods correctly, as follows.

10 Steps on How to Prepare an LTL Freight Shipping

1. Weigh and measure your freight

Accurately weigh and measure each article of your shipment. It helps determine the correct dimensions, which is essential for your carrier to calculate shipping costs precisely.

2. Choose appropriate packaging

Select the packaging that provides robust protection during transportation. You can consider using boxes, pallets, or crates as required. Making sure you pack and cushion fragile items is also imperative.

3. Labeling

Use shipping labels that contain the shipper’s and consignee’s names, addresses, and contact information. You should also include a visible and scannable barcode or tracking number.

4. Documentation

Ensure completing all the crucial shipping documentation, including the bill of lading (BOL). You should also include a detailed description of the products, their value, or any special handling instructions. Ensuring all customs paperwork is in place for international shipments is vital.

5. Palletization

In case your shipment consists of multiple items, you can consider stacking and securing them on the pallets. It will help prevent them from shifting and colliding against each other during transit, minimizing the chances of damage.

6. Classify your freight

Determining the National Motor Freight Classification (NMFC) code for each product in your shipment is integral. This code helps you determine your freight class that influences transportation costs.

7. Insurance

Considering shipping insurance to safeguard your shipments against loss or damage is important. You can work with your LTL carriers to explore available insurance options and go for the one that fits.

8. Schedule your pickup 

After insurance is complete, coordination with your LTL partner to schedule the pickup follows. You should ensure providing them with precise information about the size, weight, and type of your LTL shipment.

9. Document preparation (Bill of Lading)

A Bill of Lading is a legal document that a carrier issues to a shipper. It contains the details, including the type, quantity, and destination of LTL freight goods. Ensuring all the information is accurate and matches the shipment details is important. 

10. Track shipment information & notify your recipient

This step entails receiving tracking information to know your shipment’s location and calculating the estimated delivery time. It also involves sharing delivery tracking details with your recipient and notifying them of the estimated arrival time.

FAQs

LTL shipping is ideal when your cargo weighs between 150 and 15,000 pounds and it doesn’t fill an entire truck. It’s also a good choice when you have multiple small shipments going to various destinations.

Less than truckload (LTL) shipments don’t occupy the entire space of a truck trailer. On the other hand, full truckload (FTL) shipments take up the complete space or meet the weight limit of a truck.

LTL freight shipping rates depend on the distance traveled to reach destination locations, the shipment’s weight, size, and class, and special handling requirements for specific goods (perishable foods or hazardous materials).

Parcel carriers are usually appropriate for smaller shipments weighing under 150 pounds. LTL shipping suits shipments that weigh over 150 pounds but are not enough to fill a full truckload. FTL shipping makes a go-to choice for even larger shipments that can occupy the entire space of a truck.

Selecting LTL carriers depends on factors such as service area, price, carrier performance records, reliable cargo tracking, and insurance provisions.

Effective LTL practices include regularly auditing shipping rates to ensure cost-effectiveness, maintaining strong relationships with carriers to secure better rates, utilizing dynamic route optimization software like Upper for efficient deliveries, and tracking carrier performance to ensure reliability.

Streamline Your LTL Operations with Upper

LTL freight shipping is indispensable in today’s era of booming global commerce. It comes in handy for companies seeking an affordable and flexible shipping option tailored to their freight volumes. 

However, merely adopting the LTL shipping model doesn’t suffice. Creating optimal LTL routes is equally imperative but may be challenging at times, especially if done manually. 

This is where Upper’s route optimization software steps in to revolutionize your logistics operations. Equipped with an advanced route optimization feature, Upper’s software empowers you to revolutionize your routing operations. Here’s how you can benefit from using Upper:

  • Time and Fuel Savings: With route optimization, you can fine-tune your delivery routes, optimizing them for either time or distance, resulting in significant time and fuel consumption savings.
  • Effortless Scheduling: Upper’s software offers the flexibility to schedule routes for weeks and even months in advance. This streamlines your routing management, allowing you to focus on other critical aspects of your business.
  • Real-Time Visibility: Make well-informed decisions in real-time, achieve full visibility of your routes, and maintain seamless coordination with your drivers at all times.

Now that you understand the transformative potential of efficient routing, it’s time to experience it firsthand. Take advantage of our and explore the exclusive features that Upper has to offer.

Author Bio
Rakesh Patel
Rakesh Patel

Rakesh Patel, author of two defining books on reverse geotagging, is a trusted authority in routing and logistics. His innovative solutions at Upper Route Planner have simplified logistics for businesses across the board. A thought leader in the field, Rakesh's insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. Read more.

https://t.co/

https://www.upperinc.com/blog/ltl-freight-shipping/

t.co