Five FAQ: Less Than Truckload Shipping (LTL)
Q: What is Less than truckload shipping or LTL?
A: Less than truckload shipping is the transportation of relatively small freight. The alternatives to LTL carriers are parcel carriers or full truckload carriers. Parcel carriers usually handle small packages and freight that can be broken down into units less than 150 pounds (68 kg). Full truckload carriers move freight that is loaded into a semi-trailer. Semi trailers are typically between 26 and 53 feet (7.92 and 16.15 m) and require a substantial amount of freight to make such transportation economical.
Q: How do LTL carriers operate?
A: LTL shipments typically weigh between 151 and 20,000 lb (68 and 9,072 kg). Less than truckload carriers use “hub and spoke” operations where small local terminals are the spokes (‘end of line’) and larger more central terminals are the hubs (also called Distribution Centers or DC’s). Spoke terminals collect local freight from various shippers and consolidate that freight onto enclosed trailers for transporting to the delivering or hub terminal where the freight will be further sorted and consolidated for additional transporting (also known as line hauling). In most cases, the end of line terminals employ local drivers who start the day by loading up their trailers and heading out to make deliveries first. Then, when the trailer is empty, they begin making pickups and return to the terminal for sorting and delivery next day. Because of the efficiency of this order of operations most deliveries are performed in the morning and pickups are made in the afternoon.
Q: What are the advantages of using LTL carriers?
A: The main advantage to using an LTL carrier is that a shipment may be transported for a fraction of the cost of hiring an entire truck and trailer for an exclusive shipment. Also, a number of accessory services are available from LTL carriers, which are not typically offered by FTL carriers. These optional services include liftgate service at pickup or delivery, residential (also known as “non-commercial”) service at pickup or delivery, inside delivery, notification prior to delivery, freeze protection, and more.
Q: Is there a way to integrate LTL and FTL carriers?
A: Shippers with enough volume of LTL freight may choose to use a full truckload carrier to move the freight directly to a break-bulk facility of an LTL carrier. The use of an FTL carrier to transport this freight generally provides an overall cost savings because the freight will travel fewer miles in the FTL carrier’s network, as well as a reduced overall fuel surcharge cost. A further benefit is realized in both loading cost and product damage because the freight will not need to be unloaded and reloaded as many times. Additionally, this reduces the incidence of loss and the opportunity for pilfering or theft, because all of the freight travels together and is not broken down into LTL loads until it reaches the break-bulk distribution facility.
Q: What is the difference between LTL operations and parcel carrier operations?
A: A parcel carrier traditionally only handles pieces weighing less than approximately 150 pounds (68 kg). Parcel carriers typically still compete with LTL carriers by convincing shippers to break larger shipments down to smaller packages. LTL carriers prefer to handle shipments with the least amount of handling units possible. LTL carriers prefer a shipment of 1 pallet containing many boxes shrink wrapped to form one piece rather than many individual pieces. This reduces handling costs and the risk of damage during transit. Typically, the per pound rates of LTL carriers are less than the per pound rates of parcel carriers.