What is Less-than-Truckload (LTL)?

What is Less-than-Truckload (LTL)?

Less-than-Truckload (LTL) is referred to a transportation mode that transport larger shipments than parcel, but does not require a full truck. Generally, LTL is 1 to 6 pallets that weigh between 500 to 15,000 pounds. the shipment will move through the carrier’s network to the final destination. This mode of transportation entails many loads and unloads at origin, transit, and destination terminals. LTL provides a cost-effective solution for shippers that do not need a full truck, but have a larger shipment not accepted by parcel carriers.

How does LTL work?

The movement of the shipment is done in parts: pickup/deliver and linehaul.

Pickup and Deliver

The terminal will utilize Pick & Deliver (P&D) drivers to complete pick ups and delivery of the shipment. The LTL terminal will load a trailer in the early morning for the P&D driver to deliver freight. After emptying the trailer, the driver will then work to pick up local freight that have been scheduled with the dispatcher. This is the common order of operations for LTL carriers, however there are some exceptions such as drop trailer programs.

Linehaul Operations

Linehaul refers to the internal movement of goods through the LTL Network. A linehaul trailer is loaded to full capacity with similar outbound shipments. The linehaul driver drives the loaded trailer to the next terminal for the trailer to be unloaded and worked. From there, shipments are separated and consolidated into other trailers with similar destination shipments.

How are Less-than-Truckload (LTL) shipments rated?

Pricing varies depending on the carrier. Generally, pricing is dictated by several factors: freight dimensions, weights, freight class, fuel surcharge, and required services (or accessorial). While pricing may seem complicated, utilizing a Transportation Management System (TMS) helps shippers to receive rates instantly. Most TMS systems also offer the ability to real-time compare rates from different carriers. Learn more about rating in TMS Systems here.

The Advantages and Disadvantages of LTL Shipping

There are many reasons shippers will choose or not choose to ship a product through LTL. This section talks about a couple of points that help in that decision.

Advantages

Cost-Effective Solution: Instead of paying for an entire truck, shippers pay for the space that is used.
Services Flexibility: LTL carriers offer more accessible services such as liftgate trucks.
Technology: Most LTL Carriers have EDI/API integrations for rating and tracking integrations

Disadvantages

Reclasses/Additional Costs: If not rated properly, LTL shippers see added costs to account for additional services performed or miss-classed freight shipments. A freight audit is usually require to help mitigate these costs.
Transit Delays: Due to network movements, LTL shipments are prone to transit delays. Guaranteed Services can help mitigate this, but even guarantees can be subject to delay.
Damages: Loading and unload the trailer at each terminal creates a risk of damages. Either from moving the product or reloading the product onto a new truck shipments are more prone to damages.

An Example of a Hardware Manufacturer

Let’s say an Exton, PA hardware manufacturer gets an order for 2 pallets of hardware to a jobsite in Raleigh, NC. The hardware manufacturer can not ship the 2 pallets through UPS or FedEx due to size and sending their company driver does not seem like a good option. This is a great opportunity for an LTL carrier to provide their services.

The manufacturer can schedule a LTL shipment with limited access and liftgate services to get the product to the construction site. After the carrier pick ups the shipment and linehaul the hardware to the destination terminal. At the destination terminal, the carrier will coordinate with the jobsite due to the limited access location service and provide a liftgate truck.

Utilizing LTL helps a manufacturer from Exton PA to ship a smaller shipment to a non-reoccurring location. The carrier was able to accommodate special requirements with the location type and liftgate required services. All while being a more cost-effective rate than utilizing a dedicated truck.

Partnering with a 3PL Logistics Solutions Provider

Working with one 3PL Logistics Solutions Provider can help a shipper gain access to various regional and national carriers to best route freight. The 3PL may offer additional services like freight invoice audit, claim services, and technology to help make routing and managing LTL freight easier.