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What You Need to Know About LTL Shipping

Jason Mansur

21 February 2020

Less-than-Truckload (LTL) shipping is a cost-effective, flexible way to transport smaller amounts of freight. This article covers the entire LTL transportation model: how LTL shipping works, its benefits, and how to maximize coordination to get the best possible rates for your LTL freight.  

What is LTL shipping?

If you’re considering less-than-truckload shipping (LTL shipping), you’re probably looking for a more cost-effective and flexible way to transport your freight. LTL shipping can do that, by transporting single or multiple pallets without utilizing an entire trailer’s space.

Who can benefit from LTL shipping?

If you don’t require a full 48- or 52-foot trailer, LTL shipping might be a good option. Typically, LTL freight weighs between 150-10,000 pounds and is palletized in most cases.

You might be considering LTL shipping because you can’t find truckload (TL) capacity for your shipments. If you’re able to break up and palletize your freight for LTL, you can ship it in the smaller, more available spaces on LTL trailers. Here’s how it works.

How does an LTL carrier work?

When you ship freight LTL, it’s transported on the same trailer as other shippers’ products. This allows each shipper to pay for only their portion of the trailer, rather than for the entire trailer, as is the case with full truckload shipping (FTL).

The LTL transportation model is a hub-and-spoke model — spokes being the lanes of travel that connect the hubs, or points of distribution. Carriers pick up your freight and take it to the local origin hub. At the origin hub, the carrier loads your freight onto another truck with other shippers’ freight heading in the same direction. This process repeats itself until your shipment reaches its destination hub. Then, the carrier sends your shipment out for final delivery.

The LTL transportation model requires careful coordination to select the most efficient and trustworthy LTL carrier to exceed your client’s expectations at the right price!

What’s the catch?

This may sound like a simple solution to scaling transportation, but it’s not quite that easy.

Understanding LTL shipping rates and leveraging cost-saving LTL technologies are critical to securing your best LTL shipping rates. LTL has developed significantly since the deregulation of the transportation industry through the Motor Carrier Act of 1980, and continues to evolve due to rapid advances in technology and logistics.

So how does LTL shipping reduce your rates?

Good question. By paying for only the space your freight is taking up, your LTL shipping rates will be lower than FTL rates. Now that you know how LTL shipping works, discover the benefits of LTL shipping and how to unlock them.

Benefits of LTL shipping

There are many reasons shipping freight LTL can be beneficial to shippers. Here are three of the most important:

1. Cost savings


Through consolidation with other companies’ products, pay for the space you need and nothing more.

Pool distribution and pool consolidation also offer additional cost-saving opportunities and flexibility.

2. Many flexible options


LTL is customizable based on your specific needs and offers additional services not commonly available with FTL carriers. LTL carriers can facilitate special services, such as lift gate pickup or delivery, residential pickup or delivery, and inside pickup or delivery. Time sensitive orders can also be expedited for guaranteed for delivery using the LTL carrier network.

3. Increased customer satisfaction


The LTL transportation model improves customer satisfaction through cost savings and end-to-end visibility. LTL shipments are traceable from pick-up to delivery.

Because LTL shipping is a strategic way to reduce your transportation spending you can share those cost-savings with your customers, giving your business an edge over your competition.

LTL also allows you to better plan for your supply chain and supports just-in-time deliveries. This reduces wasted money and time, which equals faster and less expensive products for the customer. We aren’t all Amazon’s size, but LTL shipping can help you gain Amazon-like efficiencies and results.

Less-than-Truckload (LTL) shipping is a cost-effective, flexible way to transport smaller amounts of freight.

LTL shipping rates overview

So how do you get the best possible rates for your LTL freight? LTL shipping rates are complex, but the basic factors are always the same: the 1) class 2) weight 3) the distance, and 4) any additional services.

Let’s break down the major factors that go into LTL shipping rates.

Freight Class (NMFC)

National Motor Freight Classification (NMFC), or freight class, is determined by the weight, dimensions, density, storage capability, ease of handling, value, and liability of your freight.

Distance

Distance is determined by your shipment’s origin ZIP or Postal code and its destination ZIP or Postal code. Typically, the longer the distance, the higher your LTL shipping rates will be.

Other charges

While flexible pickup and delivery options are benefits of LTL shipping, those additions are not without cost. It’s important to factor in any special needs for your shipment up front so you aren’t surprised by an invoice later.

LTL technologies

Thanks to new technologies, navigating the complex world of LTL shipping is easier than ever, clearing the way for it to become a value proposition for your organization.

Transportation management systems (TMS) have evolved into intuitive software platforms that drive efficiencies by organizing all of your LTL data, and allowing you to make the most well-informed and proactive decisions for your business.

Supercharge your LTL transportation strategy by establishing an API integration into your TMS with each of your LTL carriers. By doing so, you’ll ensure optimal rates, maximum speed, and accurate information while improving your customer and carrier relationships, giving your business a major edge over its competition.

Bottom line

How does LTL work? Now you know. It’s also important to know that LTL isn’t for every shipper. Your freight needs to be the right size, and you must be able to live with a transit time that’s occasionally longer than you’d experience when shipping FTL.

If you meet these qualifications, there are few better ways to reduce your transportation spend and find capacity than by using the LTL transportation model.

Jason Mansur

Jason is Evans Transportation's Chief Operating Officer.

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