What is Less-than-Truckload (LTL) shipping? And is LTL the right solution for you to get your products to their destination?
What Is Less-than-Truckload (LTL) Shipping?
LTL shipping—sometimes called freight consolidation—is one of the hottest trends in logistics management today. When you ship LTL, or less-than-truckload, you can get your products to their destination without purchasing a full truckload's worth of space.
Freight shipment in the U.S. can be divided into two types of service:
- Full Truckload (FTL) service designates an entire truck to a single customer, often with a single product type headed to one destination or a few closely related destinations (such as a truck dropping off frozen foods or running shoes to several individual retailers in an area). With FTL, you are purchasing all of the available space on the truck, even if your product does not fill the truck entirely. FTL is best for shippers moving large volumes of similar products that take up entire truckloads.
- Less-than-Truckload (LTL) shipping allows shippers to purchase space on a truck that may carry loads from several different companies headed to the same general destination. Truckers combine partial loads from different shippers into one full multi-stop truckload. For example, a trucking company may have contracts with six different shippers who all need to move product from Dayton to Dallas. While FTL operates like a private jet, LTL is more like purchasing a number of seats on a commercial airline whose route matches your needs.
The Advantages of LTL Shipping
LTL shipping is a flexible and cost-effective way to move freight for many smaller companies or companies moving many smaller shipments to disparate destinations. Rather than contracting full truckloads that may be mostly empty, shippers can contract for just the amount of space they need on a carrier going where they need to go.
The primary advantage of freight consolidation is cost. LTL shipping is highly efficient. There is no wasted space on the truck, allowing freight companies to maximize their efficiency and pass those savings on to their customers.
LTL shipping is also a more eco-friendly way to ship freight long distances. Rather than many trucks carrying partial loads, an LTL system results in fewer, fuller trucks traveling the same routes. This lowers overall emissions for the trucking industry.
For smaller companies, having an LTL option for shipping goods to their destination may be the difference that makes business opportunities profitable enough to be worthwhile. LTL allows small companies to expand their service and delivery areas without the pressure of needing to fill a full truckload for each area they want to do business in.
How Does LTL Freight Work?
LTL has become the most popular way to ship in the U.S. With LTL shipping, you contract with a trucking company to pick up your load and deliver it to your destination. Here are some factors to consider:
- Routes: You will contract with an LTL provider for a specific route and distance. Your shipment will be grouped along with others that will be picked up and delivered to the same general location or to stops along the way. After local pickup, your shipment will be taken to a processing center and sorted onto the best truck for efficient delivery to your destination. Loads may be transferred several times at regional distribution centers as they make their way across the country.
- Tracking: Shipments are weighed, measured and labeled for tracking at the processing center. Most carriers engaged in LTL shipping use transportation management software to plan truckloads and routes, optimize delivery for each load, and track each load to its destination.
- Cost: Cost is determined by the weight and dimensions of your shipment and the distance your freight will travel. If your shipment requires special handling (for fragile items, hazardous materials, or perishables), costs will be higher. The weight and dimensions of your shipment will be confirmed by the carrier at the processing center.
- Options: Check with the distribution company to see what options that have available. If your shipment is more than 100 pounds and your receiving location does not have a dock, make sure they have liftgate service available. You may also want to check to see if they have expedited and/or guaranteed delivery available and if they are able to handle deliveries in locations with limited access or inside pickup and delivery.
- Time: Shipping time can be a drawback in freight consolidation. Because freight companies are trying to optimize the space used on each truck, and trucks will make multiple stops along the way, it may take longer to ship products LTL than through standard FTL or parcel delivery service.
Is LTL Shipping Right for Me?
LTL is a cost-efficient alternative to U.S. mail or parcel delivery services for loads that take up less than a full truckload but are too large for traditional parcel delivery services. It is a great option for cargo loads weighing more than 100 to 150 pounds. LTL works best for:
- Loads between 150 and 15,000 pounds
- Loads that can be palletized, crated or bundled for efficient loading, stacking and moving between trucks
- Stackable loads
- Shipments that are not critically time sensitive
- Shipments that can stand up to frequent handling and transfers at regional distribution centers