This guide outlines the benefits of ‘less than truckload’ LTL shipping and partial truckload PT shipping, and how they can save you money and time.
In many ways, logistics is the art and science of filling in the gaps. For several years, one of those has been the widening gap between high demand and low supply in the trucking industry. Older truckers have retired without younger ones to take their place; simultaneously, demand has skyrocketed as e-commerce continues to grow. One increasingly popular way to navigate that capacity crunch is through the use of less than truckload (LTL) shipping.
Full truckload (FTL) and partial truckload (PTL) shipping deal with loads 10,000 pounds and over, while parcel shipping transports packages 150 pounds and under. Everything in between is considered LTL shipping. There’s some debate about exactly what the top limit of LTL is, but these definitions generally hold true. Because the payloads are smaller and can be combined with others, many LTL carriers offer greater flexibility and discounted rates.
Benefits of LTL shipping
Moving your freight via LTL shipping can offer a variety of benefits for your bottom line. Naturally, it all depends on finding the right carrier for you, such as parcel services with UPS, but many shippers have found the advantages to be substantial. We’ll explore six of the potential upsides here.
- Reduced costs
Cost savings is one big advantage of LTL shipping. An LTL carrier will pack multiple payloads onto one truck, so the shipper pays only for the portion of the truck their goods are occupying. That’s a big cost advantage when compared to renting an entire truck to ship a relatively small amount of goods or having to wait until you have a large enough shipment to fill up a truck.
The key difference in LTL shipping that allows these cost discounts is the hub-and-spoke system. Most LTL carriers use these systems for consolidating and shipping goods. LTL carriers drive their payloads to centralized “hub” distribution centers, where they unload the goods and load them onto another truck headed for a hub closer to the cargo’s final destination. After several repetitions of this process, the cargo arrives at its destination.
The hub-and-spoke model saves LTL carriers huge amounts of money on fuel and labor by eliminating inefficient shipments while simultaneously allowing them to serve areas that might ordinarily be cost-prohibitive due to low freight volume. In turn, they pass this cost savings and flexibility on to the shippers who use their services.
- Increased flexibility
LTL shipping is a great option for shippers who need fast pickups and convenient service from their trucking carriers. Since LTL eliminates the need to rent a full trailer, it’s often easier to find space on short notice with an LTL carrier. This can help make your logistics more agile and responsive to the needs of your supply chain.
The potential downside of this system is that shippers have less control over exactly when a payload arrives. Because the hub-and-spoke system requires payloads to move through a (sometimes quite long) chain of distribution centers, it can lead to longer fulfillment times. If time is a major concern, many LTL carriers offer expedited shipping services.View Preview
- Lower minimum payloads
By definition, LTL shipping offers consigners the option to ship smaller payloads. This can be extremely important for small businesses who need to ship their goods but can’t afford to rent an entire trailer. However, as businesses grow, they sometimes end up pushing at the upper limits of LTL shipping (5,000 or 10,000 pounds, depending on whom you ask).
If your payload is over 10,000 but less than 20,000 pounds, you may be in the category referred to as partial truckload shipping. This type of shipping still doesn’t use a full truckload but is kept on one truck for the entire trip as opposed to LTL. It’s a good option if you’re concerned about breakage and want to reduce the number of times your package is loaded and unloaded, or if you’re starting to outgrow LTL but not quite ready to graduate to FTL yet.
- Additional service options
Many services are available on LTL shipments that traditional FTL trucking can’t offer. These include services that make direct-to-customer fulfillment possible. Such services usually include:
- Lift gate service, essential for unloading heavy goods without a loading dock
- Residential curbside delivery
- Inside delivery to a business
- Deliveries to logistically challenging locations such as construction sites, schools and universities, rural areas and dense urban centers
Availability of these services may vary by carrier, so make sure to communicate with your carrier if you need any of them. You should also communicate any special packing needs your cargo has, such as dunnage air bags to protect cargo or temperature-controlled storage. If you’re shipping hazardous materials, make sure that you’ve properly labelled your cargo and submitted all necessary paperwork to your LTL carrier, as your cargo’s hazmat class may affect what the carrier is able to ship it with.
- Ideal for e-commerce
LTL shipping is great for growing smaller businesses, particularly those focused on e-commerce. While most e-commerce shipping is done through parcel services such as UPS, an increasing amount uses LTL logistics.
E-commerce shipments are growing in volume while simultaneously facing tighter time requirements. Amazon Prime has set a new standard for shipping speed, and many consumers are no longer content waiting a week for a package to arrive. These conditions are ideal for LTL carriers, who can move small shipments over relatively short distances more efficiently and with less advance noting by leveraging their hub-and-spoke networks.
- More sustainable resource use
More companies than ever are joining the movement to reduce their carbon footprint and use resources more sustainably. Along with innovations like eco-friendly packaging materials, using high-efficiency shipping solutions like LTL is one of the leading ways that shippers and carriers alike are increasing their commitment to the environment. Because it reduces the number of partially-loaded trucks on the road, LTL shipping is a great step toward a greener company.
Conclusion
Lyft and Airbnb have shown consumers the value of sharing their extra space, and companies are reaping many of the same rewards by embracing LTL shipping. Although it’s not the perfect solution for everyone, many businesses have found that the cost savings and flexibility of LTL shipping make it a highly attractive option. If your business is struggling with the current capacity gap in trucking or you’re a small business that needs extra flexibility, LTL may be the perfect bridge across the gap.
