Parcel vs LTL Shipping: What to Choose to Maximize Savings
Up until recently the line between when to use parcel shipping and LTL shipping was quite clear. Parcel shipping focused on packages that an average person could reasonably lift without assistance or—to put a number to it—packages that weighed less than 150 pounds. Because these packages were considered easier to move than larger parcels they generally incurred lower shipping rates and would be shipped via parcel shipping.
However, in today’s shipping world the distinction between when to use parcel or LTL shipping is becoming less clear and more thought and strategy is being put into how companies decided when to use which. For example, some packages that are slightly over 150 pounds but are compact may still be a good candidate for parcel shipping because it’s still fairly easy to maneuver as its own individual parcel.
When it comes to maximizing the price of your shipping to cut down on costs there are multiple factors you need to consider. These include the size, weight, and dimensions of a package, the number of similar packages you ship, how quickly you need a package delivered, and who you are delivering to. By considering the impact of each of these factors on your bottom line you’ll be able to maximize cost savings while choosing the type of shipping that will provide you the desired end result: a successful shipment.
Size, Weight, and Shape
Like we mentioned above there is no longer a hard and fast rule that separates parcel from LTL shipments. Instead, the general rule of thumb is that smaller, lighter or more compact items will be cheaper to ship through parcel shipping, which is well equipped to individually handle packages. Overly heavy, bulky or oddly shaped items, conversely, are more cost effective to ship via an LTL carrier that is more automated and incorporates equipment, like fork lifts, to handle items that a single person could not do alone. This means that the more cumbersome packages don’t slow down the process like they would in parcel shipping, keeping costs lower.
Does your business ship many of the same items to the same place like a retail warehouse? If so, then even if your items are small, light or compact you may still benefit from using LTL shipping. LTL shipping is designed to ship full pallets of items from place to place much more easily than parcel shipping. LTL shippers will deliver all of the items to a single place—either the end location or to a distribution center that can then break them down to be shipped to their final destination. This consolidation can save you time, money and resources needed to coordinate multiple parcel shipments of the same or similar items. However, if your business frequently ships small quantities of many different items parcel shipping’s lower cost and more hands-on approach would make the most sense to maximize the efficiency of your shipping.
Ease of Delivery and Guaranteed Delivery
Are you delivering packages to individual people at their homes? Or are you shipping to a fellow business that has a large warehouse and receiving area? Your answers to these questions will determine which method of shipping will be most cost-effective for you. For example, delivering a package to a resident who lives in a ninth floor apartment requires more individualized effort (like the service you receive with parcel shipping) than delivering packages to a loading dock that is unloaded quickly by the recipient company’s receiving team. Parcel shippers are prepared for extra effort to deliver individual packages, whereas LTL shippers typically are not and will tack on additional feels for the additional work. Although if your shipment is too large, or too heavy to be considered parcel, an experienced 3PL provider can help you find a carrier that is also equipped to handle final mile solutions.
Also, if you frequently ship items directly to consumers who actively desire to know when their package will arrive and track it frequently, parcel shipping will be able to offer more consistent estimates of delivery. Currently, parcel providers provide real time updates via API to its customers, making it extremely easy to track. LTL, on the other hand, can be a little more tricky. While most reputable carriers have an on-time delivery rate in the 95 percentile, there can be delays throwing your transit time off by a day or two. If you aren’t actively logging onto the carrier website regularly to track this shipment, you might not be aware, and could end up with an unhappy customer. LTL track and trace is becoming much better as carriers adapt to API linkage, and working with a 3PL, like LTX, our customer service team is always aware if a shipment is delayed and can assist in expedites if necessary. Or, if you know a shipment must be delivered in the set time period, you can ‘guarantee’ the shipment for an additional fee.
So what does this all mean?
As a business, you’ll most likely never exclusively use parcel or LTL shipping. Instead, you’ll need to constantly monitor what and to whom you’re shipping to select the best shipping method for a given shipment. LTL shipping will generally be the best, lowest-cost option for shipments that include large, bulky or heavy items or ones that include large quantities of items that would be best shipped together on pallets. Parcel shipping, on the other hand, will best serve you for shipments that include small, easy-to-maneuver items that require more individual attention—like those going directly to your customers. Either way, if you’re looking to reduce your shipping costs and learn more about shipping best practices, it might be wise to find a shipping partner. Here at LTX, we have the expertise and dedicated staff to ensure you are getting the best rates, and the best customer service at all times. Contact us today!