Less-than-truckload (LTL) shipping operates through a coordinated network of pickup and delivery terminals, consolidation facilities, and linehaul transportation. Rather than moving directly from origin to destination on a dedicated truck, individual shipments are combined with other compatible freight to maximize trailer utilization and transportation efficiency. Understanding how LTL carriers coordinate these operations is important for businesses that depend on reliable freight transportation.
Each stage of the process, from initial pickup and terminal handling to long-distance transportation and final delivery, plays a role in determining transit times, shipment visibility, handling requirements, and overall service performance.
This guide explains how the LTL transportation process works, how carriers manage freight through their networks, and what businesses should understand when preparing and managing LTL shipments.
What is Less-than-Truckload (LTL)?
Less-than-Truckload (LTL) is a way to ship freight that is too large for parcel but smaller than what fills up an entire truckload. LTL carriers generally operate through a hub-and-spoke transportation network that allows them to consolidate freight from multiple shippers and deliver it across regional and national service areas. Local pickup and delivery terminals connect with larger distribution hubs, where shipments are sorted and transferred between trailers based on their destination.
LTL carriers usually handle 1 to 6 pallets, weighing from 500 to 15,000 pounds. The shipment moves through the carrier’s network, stopping at several terminals before reaching its final destination. Along the way, the shipment is loaded and unloaded multiple times. Less than load freight is a cost-effective option for shippers who have larger items that parcel carriers won’t take but don’t need an entire truck.
New to Less-Than-Truckload Shipping?
If you are unfamiliar with LTL transportation, start with our introductory guide explaining the LTL market, how it compares to full truckload shipping, and why businesses use it to manage transportation costs.
How does LTL work?
The LTL terminal network allows less-than-truckload carriers to move smaller shipments efficiently without requiring each shipper to reserve an entire truck. However, the number of terminal transfers and the routing structure can vary depending on the carrier, origin, destination, and service requirements.
Pickup and Delivery
Pick & Deliver (P&D) drivers pick up and deliver LTL shipments. In the morning, the terminal loads the driver’s trailer with shipments to drop off. After making deliveries, the driver picks up local shipments that the dispatcher has scheduled. This is the usual process, though there are some exceptions, like drop trailer programs.
Linehaul Operations
Linehaul refers to the internal movement of freight in less-than-truckload network. Carriers load trailers to full capacity with similar shipments headed in the same direction. The linehaul driver then transports the loaded trailer to the next terminal, where shipments are separated and consolidated with others going to the same destination.
The LTL Shipping Process Step by Step:
- Freight Pickup and Initial Handling
The LTL shipping process begins when a carrier dispatches a pickup and delivery driver to collect freight from the shipper. The shipment is typically prepared on pallets or in other carrier-approved packaging, with the appropriate shipping labels and bill of lading.
The driver collects the freight and transports it to the carrier’s local service center. Pickup requirements may include dock availability, forklift access, liftgate service, or other specialized handling arrangements. - Terminal Processing and Consolidation
Once the shipment arrives at the originating terminal, it is unloaded, identified, and sorted according to its destination and routing requirements. Freight is consolidated with other shipments moving along compatible routes.
LTL carriers use terminal operations to organize freight, maximize trailer utilization, and coordinate transportation between service centers. Depending on the destination, a shipment may pass through one or more terminals before reaching its final delivery facility. - Linehaul Transportation
Linehaul refers to the long-distance movement of freight between carrier terminals. During this stage, LTL carriers transport consolidated shipments using larger trailers, generally traveling along established routes between regional facilities.
Unlike local pickup and delivery operations, linehaul transportation focuses on moving consolidated freight between terminals as efficiently as possible. The shipment may be transferred between multiple linehaul trailers depending on the carrier’s network and the final destination. - Destination Terminal and Final Delivery
Once freight reaches the destination terminal, it is unloaded, sorted, and assigned for final delivery. A local pickup and delivery driver transports the shipment to the consignee.
Delivery requirements should be established before shipment pickup. Limited-access locations, residential deliveries, appointment requirements, and the absence of a receiving dock may require additional services or equipment. - Proof of Delivery and Shipment Completion
After delivery, the carrier generally obtains a signed proof of delivery (POD) documenting receipt of the shipment. Businesses should retain their shipping documentation, delivery records, and any exception notes in case questions arise concerning shipment condition, shortages, or potential freight claims.
How is Less-than-Truckload freight rated?
LTL Less than Truckload pricing depends on the carrier and factors like size, weight, freight class, and extra services. In addition, LTL pricing is influenced by several other variables, including density, transportation distance, carrier tariffs, negotiated discounts, fuel surcharges, and applicable accessorial services.
Most LTL carriers establish pricing using a combination of published or negotiated rate structures and shipment-specific characteristics. Two shipments traveling along the same lane can receive substantially different rates depending on their freight characteristics, carrier agreements, and required services.
This pricing may seem complicated, but using a Transportation Management System (TMS) makes it easy for shippers to get instant rates. Most TMS tools also let shippers compare rates from different carriers in real-time. Learn more about how TMS Systems rate shipments here.
For businesses shipping LTL regularly, comparing carrier pricing requires more than evaluating the discount off a carrier’s published tariff. Minimum charges, deficit weight provisions, fuel surcharges, accessorial pricing, and other contractual terms can materially affect the final transportation expense.
The Advantages and Disadvantages of LTL Shipping
When deciding whether to use LTL shipping, here are some key points to consider:
Advantages
- Cost-effective: Shippers pay only for the space they use, not for a full truck.
- Service Flexibility: Carriers provide options like lift gate trucks to make loading and unloading easier.
- Technology: Many carriers use EDI/API systems for easy rating and tracking.
Disadvantages
- Additional costs: Misclassifying shipments or missing services can lead to extra charges. Freight audits can help avoid these costs.
- Transit Times: Shipments might face delays because of network movements, but guaranteed services can reduce this risk.
- Damages: Loading and unloading often can increase the chance of shipment damage.
Understanding the Importance of the Bill of Lading in LTL Shipping
This type of shipping needs a detailed record on the bill of lading. The document includes pickup and delivery details, the shipment’s weight, the space it uses, required LTL services, and other important information. The bill of lading is crucial for all modes of freight shipping.
An Example of a Hardware Manufacturer
A hardware manufacturer in Exton, PA, needs to ship 2 pallets to a job site in Raleigh, NC. The shipment is too big for UPS or FedEx, and using their own driver would cost too much. So, the manufacturer chooses an LTL carrier. The shipment is planned with special services like liftgate and limited access to ensure it arrives safely at the construction site. The carrier picks it up, moves it to the next terminal, and arranges delivery. This option saves money and meets the manufacturer’s needs, without the high cost of using a dedicated truck.
Partnering with a 3PL Logistics Solutions Provider
Managing multiple LTL carriers independently can create administrative challenges for businesses with recurring freight volumes. A transportation management system (TMS) can centralize shipment rating, carrier selection, dispatching, tracking, documentation, and freight invoice review.
Through a centralized platform, shippers can compare available carrier pricing, identify appropriate service options, monitor shipment progress, and maintain access to bills of lading and proof of delivery documentation.
Working with a 3PL logistics provider gives shippers access to both regional and national carriers, helping them find the best shipping routes. A 3PL can also provide extra services like checking freight invoices, managing claims, and using technology to make LTL shipments easier to handle.
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