Explaining Less-Than-Truckload (LTL) Freight
Whether you are expanding your business, or just preparing a large shipment, you may find yourself overwhelmed by the number of shipping options at your disposal. When your shipment is a little too much for your usual parcel carrier but doesn’t require a full truck, less-than-truckload, or LTL freight, it might be a great option for you to consider.
LTL freight is a pretty simple concept. When you have a medium-sized shipment, like one to six pallets, it is much more cost-effective to pay for only the portion of the truck you will be using. LTL carriers typically make daily runs to pick up all the shipments, then bring them to a sorting center where they are consolidated and placed with other shipments bound for the same geographic area, or ones that are along the same route.
A Short History of LTL Freight
In 1935, a series of governmental regulations pushed by the railroad industry and state regulators made it nearly impossible for new LTL carriers to operate through restrictive oversight. The Motor Carrier Act of that same year required new operators to obtain a Certificate of Public Convenience and Necessity from the ICC, and those certificates were subject to challenges and perpetual delays. Carriers who operated prior to 1935 were automatically approved for certificates, as long as they could document prior service.
The Reed-Bullwinkle Act of 1948 exempted carriers from antitrust legislation and made it even harder for new carriers to enter the market. The result was widespread price-fixing, and new drivers being more or less forced to purchase a license from an existing company. This kept virtually all competition at bay for the next few decades.
The industry made some steps toward change through the seventies, but The Motor Carrier Act of 1980 really signaled the deregulation of the trucking industry. In the years since, competition has increased, meaning rates have come down and routes have increased. LTL shipping has become more and more affordable, meaning companies can clear inventories, and be more responsive to the needs of their customers.
LTL Conditions Today
We’ve come a long way since the restrictive days of the past. Increased competition has led to innovations and streamlining that are making LTL an incredibly attractive option to businesses in the twenty-first century. With more routes reaching more consumers than ever before, businesses have a viable means of transporting goods safely and quickly.
The innovations have affected the technology as well. We have all become very used to tracking everything about everything in our new world of gadgets and interconnectivity. You can now track your shipment from the time it leaves your hands to the time it’s received. This transparency gives every piece of your chain the information to plan and forecast accurately. Any issues with shipments are tracked and addressed in real-time, meaning you can be confident that things are going smoothly.
Pros and Cons of LTL Shipping
It’s a bit of a misnomer to call them pros and cons, but there are criteria of your shipment that will help you determine whether or not LTL freight is the right option. These are going to play a big part in your decision making, so they are good to familiarize yourself with.
- Pros: LTL Shipping is considerably cheaper than truckload freight, and is the main consideration for most people who are shipping less than a full truckload. Also, the fact that you don’t need to fill the entire truck makes it considerably easier to ship your items when they are ready, rather than waiting to fill a truck. Since you will typically be loading your shipment on a pallet before the carrier picks it up, you will be able to protect and secure the pallet in a way that minimizes damage to the shipment.
- Cons: LTL shipping is slower than truckload shipping. When you fill only a portion of the truck, it means someone else is filling the rest, and the driver must make multiple stops along the route. Another disadvantage rears its head when you are shipping refrigerated items. There are fewer refrigerated LTL trucks, meaning they can be in short supply. Another thing that can cause issues is the lack of temperature control. With truckload shipping, you can determine the exact temperature inside the truck, but with LTL you may have to take whatever temperature and route best matches your needs.
LTL vs Truckload
Aside from cost differences, there are a few other factors to consider when deciding between LTL and truckload freight.
If you are on a tight deadline, keep in mind that LTL freight takes a little longer to ship. If you are shipping from Minneapolis to New Orleans, your truck may make stops to drop off other shipments in St. Louis and Memphis along the way, adding a little time to your expected delivery. You can usually choose to expedite your shipping, but that will likely incur an additional fee. But, if you don’t have a tight deadline, LTL will save you considerable money.
If you are shipping enough product to fill an entire truck, the better option for you will likely be truckload shipping. The volume justifies the cost, and the direct route from your door to destination means that driver breaks are the only things affecting delivery time. Also, if your shipment must be kept at a constant, specific temperature, truckload shipping is much more likely to meet your needs.
If you are unsure which option best fits your needs, reach out so we can help figure out if LTL shipping is right for your freight. Freight Management Logistics would love to help.