Less-Than-Truckload (LTL) shipping is an important form of freight transportation for many businesses. It allows companies to move smaller shipments at a lower cost than full truckloads, making it an attractive option for freight brokers and their customers alike. In this blog, we'll look into the basics of LTL shipping, including how it works, cost considerations, as well as the advantages and disadvantages of using LTL services.
LTL Basics
So, how exactly does LTL shipping work?
When you book an LTL shipment, the freight is loaded onto a shared trailer and transported to its destination using a pre-existing network of crossdock facilities owned and operated by the LTL carriers. The amount of space you need will determine the cost; larger shipments will require more space, which can result in higher shipping costs. The same goes for heavy shipments, since a trailer has both size and weight restrictions. However, since you’re sharing the trailer with other shippers’ freight, the costs are still lower than they would be if you were to use a dedicated trailer for the shipment.
Pros & Cons
We already mentioned the lower cost, but one of the biggest advantages of LTL shipping is that it offers flexibility and convenience. You can book an LTL shipment at any time, and you don’t have to worry about fluctuation of market rates in the full truckload market.. Plus, you can include a variety of pickup and delivery options, including the need for a lift gate or residential delivery where no standard freight dock is available. There’s usually an extra charge for this, called an accessorial charge.
So what about the downside of LTL? Since LTL carriers fill their trailers with multiple customers’ freight and it typically has to be swapped from trailer to trailer at different service centers before it’s delivered, there’s the risk of the freight being damaged in the extra loading and unloading, lost on a dock somewhere, or delivered by mistake to the wrong destination. Additionally, the pricing is very sensitive to specific details of the shipment.
Pricing
LTL pricing is calculated using a variety of details including weight, size, freight class (which is related to the density of the shipment) and the accessorial charges that we mentioned before. If you give your customer a quote and the freight ends up being heavier or larger than you quoted it at, the cost jumps up and you have to go back to your customer with an extra charge. The same applies to having the wrong freight class or a missed accessorial requirement. The LTL carrier will still deliver your shipment, but they’re going to re-bill you for the extra charges, which you need to go back to your customer and ask them to pay you for. This is why it’s really important to double check the shipment details before you request your quote from the LTL providers.
Overall, LTL shipping is an effective way for us as freight brokers to transport our customers’ freight efficiently. It offers cost savings and a wide range of services that can meet the needs of any business. While there are some drawbacks associated with LTL shipping, these can be managed by working closely with your customer and LTL provider. By understanding how LTL works and its advantages and disadvantages, you will be better prepared to make informed decisions when it comes to selecting this type of service for your shippers’ needs. With the right preparation in place, you’ll soon find yourself taking advantage of all the benefits that come along with using less-than-truckload shipping.
