What is LTL Shipping?
Your company has lots of shipping costs. Freight shipping has been the primary way of shipping things since shipping existed. But what happens when your company doesn’t need to ship a full truckload of product. In the past, parcel shipping would have been your only option. However, parcel shipping is neither convenient nor cost effective. When your company needs a middle of the road option, LTL is the way to go.
LTL stands for “Less than Truckload.” It is the middle option for shipping by weight, between 150-15,000 pounds. The function of LTL is to ship products that don’t fill a full truckload. Most LTL shipments are between 1 pallet and 7 pallets. By only renting part of a truckload, you can potentially save a lot of money. The problem with LTL is the guesswork involved in determining the final cost. LTL can easily become a spending hole without the proper knowledge. In order to use LTL correctly, you must understand the pros and cons of using this method of shipping.
Pros and Cons of LTL Shipping
Obviously one of the biggest pros is cost savings. Because you are only renting part of a truck instead of a full truck, costs can be cheaper. Factors that will hinder your LTL savings would be:
- Distance: the longer the distance the more expensive the shipment
- Time-sensitive Products: expedited LTL shipping costs a premium
- Type of Shipment: certain materials and weights will cost a premium
- Extra fees: accessorial fees are common, as well as unloading and tracking fees. LTL shippers are notorious for nickel and diming customers.
LTL also has an advantage over parcel shipping in the area of security. Because the pallet you are shipping has been pre-packaged together, it has a much better chance of reaching its final destination intact versus shipping multiple parcel packages. The flip side of this argument says that the shipment is less secure than a full truckload shipment because it is grouped together with other companies’ shipments. More stops along the way increases risk of damage or lost shipments. This fact is one to keep in mind when using LTL.
Another pro of LTL shipping is that it allows your company to expand its sales reach. A lot of times, LTL shipping companies are much more flexible in delivery area. This allows your company to expand its service area without much initial risk. And you don’t have to open a new distribution center. By finding a LTL carrier that has available space on demand, you can test out new markets without investing to much startup money.
How do I leverage it for my company?
LTL shipping costs can be tricky to nail down. Because there are no direct apples to apples comparisons to full truckload shipping, some companies are unable to understand whether LTL is saving or costing them money. One of the easiest ways to gain the business intelligence necessary to sort through this problem is by using a freight management system. Our freight and shipping management tools give you control to compare shipping costs between LTL and Truckload. Our quick rate module gives you the best estimate possible for your LTL shipping, including accessorial charges, equipment, and service fees.
LTL can be just one more tool in your toolbelt to save your company substantial money.