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What is LTL Freight & How Can It Work for You?

What is LTL Freight & How Can It Work for You? | Transportfolio

Less than load (LTL) freight is the transportation of products or goods that does not require a full truckload due to the smaller nature of the parcel. Therefore, there are typically many separate shipments being transported on one truck. LTL shipments are usually arranged on pallets and can range anywhere from 150 pounds to 10,000 pounds.

LTL carriers specialize in optimizing their loads; moving more goods for more shippers in an efficient manner. Shippers like LTL shipping because it affords them flexibility, cost effectiveness, and environmental friendliness. However, LTL shipping can be rather complex.

In this post we will explore the benefits, challenges, and best practices of LTL freight shipping. But, before we jump into these, let’s look at how LTL freight actually works.

How Does LTL Freight Work?

Essentially, you combine partial loads to create full multi-stop truckloads, which is very efficient. Cost tends to be based on space used, class of items being shipped, and pickup and destination locations.

LTL freight can be shipped standard, expedited, or guaranteed. LTL freight can also be shipped with special services, such as lift gate pickup/delivery, inside pickup/delivery, residential pickup/delivery, and reweighing or reclassification. These services require additional fees called assessorial fees.

Benefits of LTL Freight

  • Cost

With LTL freight, the truckload is made up of several smaller shipments that all together fill an entire truckload. Because your shipment is not using the entire truck space available, you only have to pay for the space you are using. Therefore, your cost will be a fraction of what a normal full truckload shipment would cost.

  • Environmental Friendliness

The LTL shipping process results in fewer trucks carrying full loads, rather than more trucks carrying less than their capacity. This reduces emissions because it lessens the amount of trucks needed to get goods to their destinations.

  • Works for Small Businesses

Small companies can benefit from LTL shipping because they tend to be shipping fewer goods and spending less money on freight than larger companies. LTL shipping affords small businesses to benefit from all the services professional shipping provides without paying the high cost for space they don’t need.

Challenges of LTL Freight

  • Time

With LTL freight, time sometimes suffers as a tradeoff for flexibility and price. Because each truck contains shipments from multiple clients going to multiple (while similar) locations, oftentimes it takes longer for freight to arrive. It is therefore important to budget more time for LTL freight to arrive at its destination than you would for full truckload freight.

  • Finding a Carrier

There are some carriers that typically offer LTL shipping, but not all carriers do. A challenge can sometimes be finding a carrier willing to ship LTL, and when you do, making sure they are giving you the correct rate.

  • Attention to Details

LTL shipping requires a lot of focus on details- freight class, weight, pickup and destination locations, deadline, etc. All of these factors affect the price your organization pays for LTL freight. It is therefore vital to pay attention to all specifics when determining the logistics of your LTL shipments.

Best Practices of LTL Freight Shipping

Once you have made the decision to ship LTL, there are several best practices you should follow. To successfully ship LTL freight, make sure your organization pays attention to the following components:

  • Use a Transportation Management System

A transportation management system (TMS) provides shipment optimization, visibility, business intelligence, and global supply chain talent needed to lower costs, improve efficiencies, and gain a competitive advantage in your global supply chain.

The system should be able to examine every LTL load to see if it can be combined with other loads on nearby routes, and then build multi-stop full truckloads of freight.

Additionally, the expertise that comes with a TMS can help your organization choose an LTL carrier, ensure you are being charged the correct rates, optimize goods and routes, and answer any questions you may have along the way.

  • Leverage Consolidators

No matter how good your software is, you can’t consolidate freight unless you have significant LTL volume. Fortunately, through freight consolidators, even small volumes can ship via LTL.

Freight consolidating companies bring partial loads from many shippers into their consolidation centers, and they use their technology and volume to create full truckloads. Any company participating in this process receives greater efficiency and saves money.

There’s something else you should know, too. Consolidation Centers are not sleepy warehouses where freight sits around, collecting dust. There’s a lot of activity and planning involved, with compatible loads constantly being combined and shipped. Often freight comes into the center and goes out within 24 hours. But with extreme efficiency at the heart of consolidation, freight is typically handled less often than a typical LTL load. So consolidation can also help prevent damage and claims.

  • Provide Accurate Information About Your Shipments

Carriers have to spend extra time, resources, and money if they have to handle freight that has been packaged and reported improperly. Maintain good relationships with carriers by accurately reporting information about your shipments (weight, freight class, etc.) and packaging them properly based on that freight’s properties. This will save carriers time and expense, helping to ensure you have a positive relationship with LTL carriers going forward.

How to Successfully Optimize Your LTL Freight

It’s a logistics conundrum that almost every shipper faces: how to best route freight that is more than 6 pallets, but not enough for a full truckload. If you do not have a full load to ship, choosing a full truckload service may be a less eco-friendly choice because of the unused space. This is the spot where freight consolidators can add value and efficiency to the supply chain.

With freight consolidation, shippers can drive down costs and emissions. Take advantage of transportation networks and freight volumes by consolidating shipments into full truckload shipments. Watch the video below for more details.

Additional LTL Resources

  • How to Cut LTL Freight Costs: Savvy shippers are realizing LTL freight savings and improved supplier relationships with help from their 3PL partner. Learn how two shippers recently saved more than 10% on their LTL rates by improving their logistics.
  • Bridging the Gap Between LTL and Full Truckload: Shipments that don’t fill a full truck are common in supply chains, While LTL and FTL are both effective options, there is a third alternative that can provide more opportunity for bottom line.
  • Turn Your Perishable LTL to a Supply Chain Enabler: Customers who shift their perishable LTL thought process from transactional to planned see impressive results in their supply chain. Here are a few examples of how companies found success when making this crucial shift in thinking and behavior.

Final Thoughts

LTL freight is a shipping option your organization should be aware of. Depending on your organization and the types of shipments you do, LTL freight can be extremely efficient and cost effective. In order to maximize your LTL shipments, it is important to be aware of how the LTL industry is run and can work to benefit you, as well as what steps you can take to get the most out of LTL freight.

Learn more about your LTL shipping options, simplify your load booking process and provide a dedicated contact to coordinate all your freight needs with help from C.H. Robinson.

 

Comments

Chuck

Good blog !!! A tremendous amount of money can be saved by consolidating shipments. Technology is the key. In most cases a good software program will help to save time and of course money.

2.28.12

Reply

Christopher Bryfogle

Thank you for your response and positive feedback, Chuck. I’m glad you enjoyed it!

2.29.12

Reply

Biswajit

Thanks for the information. Do we have above facility offered in India ? Here the challenges are more, considering local Government regulations and taxes and the distances to be covered are quite far from each other .
It is quite an eye-opener since there can be good amount of cost savings as well as customer satisfaction by getting goods delivered fast .

4.16.12

Reply

Christopher Bryfogle

Right now our consolidation efforts are focused in North America, China and Europe. However we are continuing to expand our presence within India and we expand, we will be offering more services throughout the region.

5.3.12

Reply

Juan Ballesteros

Great post. Nice to to get out of your way, and post these helpful notes.

12.14.12

Reply

Tom

What your article fails to point out is LTL shipments as opposed to full truck loads get handled multiple times by the carriers. If you have ever been on a carriers dock you will have seen how the product can be lifted, shoved, rammed and often times reloaded into vans with little to no thought of how this affects the cargo. If the product arrives damaged you then have to rely on your customer to document any damage in order to have any chance at recovering the cost of the damaged material. Most personnel receiving the goods don't know or care how important this process is and you're left with a battle with the carrier for recovery. I've been moving freight from the manufacturing side for over 30 years and if I can avoid a LTL shipment I will.

6.20.17

Reply

Karissa Rodriguez

Extremely helpful in understanding how LTL shipments work and what information is needed to accurately calculate rates. Understanding the process enables more informed decisions in choosing which type of LTL is needed. Thank you.

6.22.17

Reply

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