Not every shipper has enough goods to fill up an entire trailer. That’s where less than truckload (LTL) freight comes in. LTL freight, or freight that fills less than a full truckload, can benefit both shippers and carriers. Shippers pay for the space they use and share costs for transportation with other shippers. Carriers maximize their profits by carrying full loads from different shippers as often as possible.
What is LTL freight?
When shippers don’t need an entire trailer to move their stuff, they often opt for less than truckload freight shipping. It’s typically the most affordable way to transport smaller loads.
LTL freight definition
What is less than truckload? LTL freight is cargo that doesn’t take up a whole trailer and can be combined with other LTL shipments. Less than truckload freight is usually the preferred method for loads between 150 and 15,000 pounds that do not require the use of a whole trailer. LTL freight consolidation can maximize loads for carriers by combining multiple LTL freight shipments into full truckloads.
How does LTL freight shipping work?
LTL freight shipping works by combining partial loads from multiple shippers. This usually (but not always) creates multi-stop truckloads. Pricing is based on space and weight, classification of the goods being shipped, and pickup and delivery destinations. Less than truckload freight shipping can include standard, expedited, or date-guaranteed shipments. Carriers can also offer additional freight services for shippers, including:
- Lift gate pickup or delivery
- Inside pickup or delivery
- Residential pickup or delivery
- White glove service
Because of the additional complexities involved, carriers can charge additional shipping fees, boosting their profits.
What is the difference between LTL and FTL?
One of the biggest differences between LTL and full truckload (FTL) is price. Shippers pay lower rates for shipping smaller loads because they’re only paying for the portion of the trailer they’re using. Even with those lower rates, LTL is good for carriers. By filling the excess space with other shipments, they can maximize their trailer capacity and charge multiple shippers. Transit and delivery times are also different. With FTL, carriers are on a direct route from pickup to destination. This makes it easy to forecast delivery times. But because LTL freight is riding with other shipments that might require multiple stops and deliveries, it’s harder to predict delivery times accurately. For LTL freight, carriers need to focus on shippers that are a bit more flexible and willing to accommodate potential delays during multiple stops. With full truckload freight, goods are loaded up, and the trailer is sealed. The truck goes directly from pickup to delivery. With LTL shipping, you’ll often see product loaded/unloaded in and out of trailers and warehouses multiple times before being delivered. Any time you handle goods more frequently, there is the added risk of damage.
The benefits of LTL freight shipping
LTL freight shipping offers multiple upsides for both LTL carriers and shippers.
Compared to the cost of a full truckload, LTL freight costs shippers less since they’re only paying for the space they use. It also makes shipping more affordable for smaller businesses as costs are shared across multiple shippers. For carriers, matching LTL freight from different brokers and shippers can bring in more money by maximizing capacity that might otherwise go unused. Brokers can help find the most profitable or more efficient loads.
Most LTL freight shipments are bundled onto pallets before loading. When pallets are wrapped and packaged, they have a better chance of safely staying put, even if they re-loaded and stored multiple times.
LTL carriers offer full tracking capabilities and options, such as:
- Bill of lading
- PRO number
- PO number
- Shipment reference number
- Pickup date range
What factors should determine your LTL freight rates?
Several factors impact how carriers and brokers price their LTL freight rates. Take these things into account when determining LTL freight rates:
- Market demand. LTL freight rates are impacted by the amount of current demand and space availability on trailers.
- Freight classification. Freight class is based on density, stowability, handling, and liability.
- Distance. How far are you going in total? The more miles between points, the greater the cost for everyone.
- Destination. Where goods ship also impacts costs. Shipping along established lanes to major hubs will cost less than making multiple rural or residential deliveries.
- Dimensions and weight. The dimensions and weight of the shipment determine freight class and directly impact rates. Oversized or oddly shaped items, for example, take up more space. Smaller (but denser items) can limit the number of other items that can be shipped.
- Deadhead miles. Having to drive an empty truck from delivery to a new pickup should also impact pricing since carriers have to bear the cost of empty miles.
- Availability. You can only ship LTL freight when there’s available space on trailers, which varies based on seasonality and market demands.
- Accessorials. Extra services cost extra. Carriers can charge more for things like lift-gate service, delivery to limited access or residential locations, inside delivery, or white-glove services.
- Fuel costs. Fuel costs tend to vary significantly based on market volatility and location.
What is an LTL freight class?
An LTL freight class is a designation created by the National Motor Freight Traffic Association (NMFTA) to standardize freight classes. Shipments are categorized based on four factors:
- Density. The amount of space an item takes up relative to its weight
- Stowability. How easy (or difficult) goods are to store within the trailer. For example, extra heavy, overly large, or hazardous goods can be more difficult to stow.
- Handling. Difficult or special handling needs also play a role in determining weight class. Hazardous goods, for example, must be handled differently.
- Liability. Fragile or perishable goods, such as produce, may require additional measures for damage protection, such as refrigerated trailers. Carrying unstable or fragile items can increase a carrier’s liability if something goes wrong.
Density usually plays the biggest role in determining prices. Bulkier but lighter shipments have a low density, which costs more to ship because carriers have less space to take on other shippers. Shipments are divided into 18 classes, with a unique NMFC code attached to each category.
Tips for LTL freight carriers
Matching the right LTL loads to get the maximum revenue potential can be time-consuming and complex. In today’s fast-paced world, decisions often have to be made quickly. The key is better data and understanding rate trends to find the most profitable jobs.
Use a dedicated LTL load board.
As an owner operator, being flexible and agile can be the difference between success and failure. Using less than truckload load boards, such as Truckstop.com, gives carriers accurate, same-day rate data. It also provides rate recommendations specific to load, broker, and lane. A good LTL load board will track rate trends to help you adjust your pricing accordingly, accurately assess supply chain variables and demand for both origin and destinations, and help predict fuel rates and surcharges.
Work with an LTL freight broker.
LTL freight brokers use load boards and their shipper relationships to connect carriers with the ideal loads. LTL freight brokers act as intermediaries to match goods with carriers with the right capacity, lanes, and routes to make those shipments on time. Brokers also help carriers find LTL loads that optimize trailer loading.
Use a transportation management system.
A robust transportation management system (TMS) can make life easier for LTL freight carriers in a variety of ways, including:
- Optimizing assets (driver, tractors, trailers)
- Balancing loads across resources
- Ensuring compliance with federal regulations
- Providing proof of delivery visibility
- Automating IFTA reporting
Carriers can save time by quickly creating bills of lading (BOLs), managing customer agreements electronically, providing load confirmations, and creating invoices with one click. The best TMS helps carriers optimize shipments and routes. They also help make sure you’re charging profitable and competitive rates. The vast majority of carriers are still relying on spreadsheets and manual processing of LTL freight shipments. Using software and automation can significantly improve your speed and accuracy. Customers save time and money using Truckstop.com’s ITS Dispatch tool. The average user sees 31% more loads and 12% higher profits.
Get the best rates on freight loads.
Fill your trailer and find LTL freight rates on the Truckstop.com Less Than Truckload Load Board. We can help you find LTL freight loads, give you the tools to book them fast and boost your revenue.