Less than truckload (LTL) freight concerns the transportation of freight that does not require a full truckload (FTL). These smaller loads generally result in many separate shipments moving in one consolidated truck. LTL shipments generally are 1-5 pallets and range anywhere from 150 pounds to 10,000 pounds.
LTL carriers specialize in optimizing load routing for shippers in an efficient manner. Shippers prefer LTL shipping for flexibility, cost-effectiveness, and eco-friendliness when their freight doesn’t fill a full truckload (FTL).truckload (FTL).
LTL shipping is complex, as each carrier offers a unique solution and approach that meet various shippers needs. This educational post explores the best practices of routing LTL freight shipments. Let’s start by taking a moment to learn how LTL freight shipping works.
How do LTL Networks work?
Essentially, less than truckload (LTL) freight shipments combine partial loads to create full multi-stop truckloads, which is very efficient. Shipping costs are based on density, the pickup & destination locations, space used, and the freight class of items being shipped.
LTL Freight can be shipped standard, expedited or guaranteed.
Some carriers offer guaranteed services by specific times, while others guarantee the delivery date only occurs before 5pm. LTL freight also utilize special services, which are known as an accessorial. Some of these services include lift gate pickup/delivery, inside pickup/delivery, residential pickup/delivery, and reweighing/reclassification. These services require additional fees called accessorial fees. Having a partner such as TLI to audit accessorial fees ensure accurate charges and necessary services are used in shipping.
Benefits of LTL Freight
ESG Friendly
LTL networks process multiple shipments consolidated into full loads, rather than routing trucks carrying less than full capacity. This drop in the number of trucks required to get goods to their destinations reduces emissions and your company’s carbon footprint.
Cost Savings
LTL freight consists of several smaller shipments that are all consolidated together to fill an entire truckload. Because your shipment only uses a portion of the truck’s available space, you only pay for the space you use. This ensures your cost will be a lower than a full truckload shipment would cost, because you are only taking up part of the truckload space.
Perfect for E-Commerce
In a world where ecommerce has become the norm, businesses need to ensure shipping methods line up with the needs of clients. LTL routing improves efficiency and delivery speeds by bypassing the need for each shipment to fill a full truckload. LTL carriers offer unique services such as delivery appointments which can ensure drivers are meeting consumer availability to offload freight. Using LTL shipping ensures your cargo & inventory ends up exactly where it needs to be, when it needs to be there.
Small Business Friendly
Small companies greatly benefit from LTL shipping. Most small businesses ship less than a full truckload (FTL) and spend significantly less money on freight than large companies. LTL shipping allows small businesses to benefit from the services carriers provide without having to pay high costs for unused space through routing everything via dedicated trucks.
LTL Freight Challenges
Carrier Capacity
Unlike full truckload shipping (FTL), not all carriers offer LTL shipping. The barriers to entry are high as carriers need docks available throughout major cities, warehouse teams, and technology solutions. Finding a national or regional carrier who will ship LTL for the right price can be challenging. It is recommended to leverage the technology of a Transportation Management System to identify carriers that fit your service network and pricing needs.
Shipment Details
LTL shipping requires focus on details. Special services, density, freight class, weight, cargo value, pickup and destination addresses, delivery deadlines—all of these unique factors influence the price your organization pays for LTL freight. Pay close attention to all specifics when requesting your LTL quote to get the best price and service level for your shipping needs.
Time
With LTL freight, there is a great deal of handling in-network so shippers must compromise in the tradeoff of flexibility vs price. Because each truck contains shipments from multiple companies going to multiple nearby locations, it often takes longer for freight to arrive than a dedicated full truckload driving directly to the destination. When you LTL carrier networks, make sure to budget more time than you would for standard truckload shipment.
Best Practice of LTL Freight Shipping
To successfully ship LTL freight, make sure you pays attention to everything within your control:
Use a Transportation Management System (TMS)
A transportation management system (TMS) provides shipment optimization, visibility, consolidation opportunities, business intelligence, POD archiving, and tracking visibility. These systems lower costs, improve efficiencies, and provide a competitive advantage in your global supply chain. This enables shippers to partake in data-driven decision making.
A TMS should be able to examine every unique LTL load to see if it can be combined with other loads on nearby routes. It then builds multi-stop full truckloads of freight using this information. A shipper often times does not have access to a rating engine outside of a TMS system, so even when receiving pricing from carriers directly they have no way of ensuring there is actual savings en masse.
The expertise provided by a TMS like ViewPoint helps you choose the best LTL carrier, receive the most competitive rates, properly optimize goods and routes, and ensures the invoice matches the quote while providing your procurement team tracking of all inbound loads with consolidated daily manifest.
Provide Accurate Information about your Shipments
Carriers are forced to invest time, and money to handle improperly packaged or reported freight. Sometimes lost freight occurs simply due to a shipper putting the wrong label on the pallet. We recommend maintaining good relationships with carriers, and viewing them as strategic partners. Carriers appreciate it when manufacturers accurately report information about their shipments (weight, zip codes, freight class, etc.) and packaging them appropriately based on that freight’s properties. This saves carriers time and expenses, building a closer relationship with their favored shippers.
Leverage Freight Consolidations
No matter the quality of your software, you can’t consolidate freight unless you have significant LTL volume. Fortunately, even small volumes can ship via LTL with the help of freight optimizers.
Consolidation companies bring partial truckloads from many shippers into their consolidation centers to create dedicated full truckloads. At TLI shippers have access to the mode optimization department who route LTL shipments via partial truckloads or volume LTL pricing. Utilize a resource that considers load-to-ride carrier options and uses technology for efficient rating. Allowing you to focus on growth and scalability of your operations.
Optimize your Logistics Strategy
It’s a logistics strategic obstacle that every shipper faces: How to best route freight that is larger than six pallets, but not enough for a dedicated full truckload (FTL). If you do not have a full load to route, it does not make sense to use a less eco-friendly dedicated choice because it will waste a great deal of unused space.
This is where TLI’s Mode Optimization department can add value and efficiency to your supply chain. Drive down costs and emissions by partnering with a team of experts at TLI who can swiftly optimize your freight in alternative equipment type solutions such as cargo vans and sprinters. Utilize our extensive transportation network to route your LTL and Full Truckloads through a team that does it best.
Suggestions for Shippers
As a key decision-maker in your company’s carrier routing program, consider the implications of managing LTL networks carefully. This includes billing errors from carriers, and lost and damaged freight. Tailor contract structures to your company’s specific needs, considering freight class, cargo liability, and frequent accessorial usage.
LTL freight can be extremely efficient and cost effective, and it is important to leverage the ViewPoint technology to ensure the data reflects this. To optimize LTL Shipments, use a data-drive strategy instead of handling each shipment individually for scalable supply chain management.