What is Less Than Truckload (LTL) Freight?
Often times, when companies approach LTX, they are unfamiliar with Less Than Truckload (LTL) shipping methods. In this article, we define LTL shipping, compare LTL and Full Truckload (FTL) shipping, and look at the pros and cons of LTL shipping.
Less Than Truckload Shipping Explained
Less than truckload (LTL) shipping is a mode of transportation where shippers move products weighing anywhere from one hundred pounds to ten thousand pounds in a cost effective manner. LTL carriers use a network of terminals and asset equipment to consolidate freight that is traveling in similar directions, also known as ‘lanes’, to offer competitive shipping rates.
Less Than Truckload Shipping vs. Full Truckload Shipping
In Full Truckload (FTL) shipping, a truck moves a full trailer load of a single shipper’s product from the origin to the destination. In LTL shipping, shipments move from the origin through multiple terminal points before arriving at the final destination. This offers an opportunity to consolidate multiple customers freight from multiple locations together.
For example, a shipper manufacturing widgets needs to send one pallet of widgets weighing 2,000 pounds from Peachtree City, GA to Fresno, CA. Because of this small shipment size, FTL would not be a logical method and the manufacturer would choose to use LTL.
In our LTL example below, the carrier picks up the pallet of widgets at the customer’s origin location and brings it to the LTL origin terminal. The origin terminal breaks down the trailer with the freight and reloads it onto a trailer traveling to the origin hub in Atlanta, Georgia. The pallet is cross-docked (loaded directly from trailer to trailer) onto a line-haul trailer traveling to Jackson, Mississippi. From Jackson, the pallet travels to a bulk break facility in Memphis, Tennessee and then to a relay facility in Oklahoma City, Oklahoma. From the relay facility, it travels to Rialto, California and then to the destination terminal in Fresno. Once in Fresno, the widgets are loaded out for travel to the final destination.
Example LTL transit map traveling from Peachtree City, GA to Fresno, CA:
Advantages of LTL Shipping
- LTL is cost effective for shippers and manufacturers. Pricing agreements can be negotiated on an annual basis and offer accurate forecasting based on shipping trends.
- LTL offers operational flexibility. For example, in some cases we can schedule and complete pick-ups within two hours. This is a benefit for “just-in-time” manufacturers who do not need warehouse space to store finished products. We have a partnership with a manufacturer that has 600,000+ square feet dedicated to making their product. They use less than 2% of their building for staging and shipping. Without the flexibility of LTL, this manufacturer would require more shipping space to operate.
- LTL transit times allow for cross-country moves within a week. Nationally-based carriers have the ability to cover the majority of the United States in three transit days or less.
- LTL technology improves workflow efficiency through: streamlined pick-up requests, automated tracking updates, document retrieval and batch freight invoicing.
Disadvantages of LTL Shipping
- LTL freight is handled several times throughout the shipping process. This increase in handling can lead to damages if the product is not well packaged.
- While LTL transit times are similar to other modes of transportation, expedited and air freight shipments arrive faster than LTL. These methods may be appropriate for time-critical shipments.
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