LTL Freight
As of 2020, the trucking industry is worth over 790 billion U.S. dollars. The sector is responsible for the transportation of goods from one place to another and building materials and waste from construction sites.
In general, the trucking industry has experienced significant growth, but most notably less-than-truckload freight shipping (or LTL), a form of transportation used to distribute small freight rather than large truckloads.
In the U.S., the market size has seen meaningful growth over the past few years due to improving economic needs for inland freight transportation. In 2020, the LTL industry reached over 78 billion U.S. dollars.
But what exactly is LTL shipping, and why does it matter?
What is LTL Freight Shipping?
As mentioned before, LTL shipping is a form of truck transportation that has experienced notable growth because it helps companies reduce expenses. When making an LTL shipment, you’re only entitled to pay for the area of the trailer used, rather than the whole trailer. The rest of the cost is covered by the shipments from other businesses using the trailer's space.
As far as the transportation itself goes, your freight is stacked into crates, large boxes, or pallets and combined with the other occupants’ shipments into a single trailer — making LTL shipping a reliable and cost-effective form of transportation. You no longer have to worry about paying for unused cargo space.
By comparison, FTL, or full-truck-load, freight transports full containers or trucks of a certain product from one customer to another.
LTL shipping is primarily for businesses that do not need to use a full trailer for freight. Using LTL shipping over other shipping methods can considerably maximize your cost savings.
The History Behind LTL Freight Shipping
Prior to establishing LTL shipping, most of the freight in the United States was shipped via railroad. However, in 1935, the government and railroad industry convinced the Interstate Commerce Commission (ICC) to expand their authority over the trucking industry. But it was very regulated.
That same year, the Motor Carrier Act required new truckers to seek a "certificate of public convenience and necessity" from the ICC. Licensed truckers had to file tariffs and get them approved within 30 days, all while competing with other carriers.
In 1948, the Reed-Bulwinkle Act was passed, which opened the industry to fixed pricing and further exempted carriers from antitrust laws. The ICC denied applications for new carriers and ensured the only way into the industry was to buy a license from an existing carrier.
Extremely high costs and regulated trucking networks developed across the country, and no real change occurred until three decades later.
The beginning of deregulation of the trucking industry in the United States started in the 1970s under the Nixon administration. Still, it really began to move forward with the Motor Carrier Act of 1980. LTL freight shipping quickly began to hit its peak, and between 1980 and 1990, the number of carriers doubled, with over 40,000 carriers in the U.S. Since then, LTL shipping has generated tens of billions of dollars in revenue.
Benefits of LTL Shipping
Aside from the fact that it reduces travel costs, there are many other benefits to LTL shipping.
More Secure Transportation
LTL freight shipping is considered safer than using FTL shipping. Workers package items onto pallets or crates before being loaded onto the truck. Pallets protect your items from wear and tear mid-shipment, as well as during the process of loading and unloading. And in the case that you experience damaged goods, LTL carriers can help issue an insurance claim or provide additional information.
Accurate Tracking
LTL shipping also offers tracking capabilities, so you can always know the exact location of your shipment. Most LTL carriers include accurate and reliable tracking systems using the latest technology — typically using a bill of lading number, PRO number, PO number, or shipment reference number. Real-time tracking of pickups, drop-offs, delays, and deliveries enables both you and your customers to keep a close eye on the transportation of items.
Offers a Variety of Delivery Services
When shipping via LTL, you can choose from multiple delivery services — such as liftgates, residential pickups, and deliveries — so you can choose the form of delivery that best suits your customer's needs.
A Better Choice For the Environment
If your company is looking to reduce your carbon footprint, LTL shipping is the way to go. LTL shipping allows shipments from multiple companies to be combined in one truck, thus reducing the number of partially full trucks on the road. This results in fewer trucks on the road overall and fewer carbon emissions.
Determining LTL Shipping Rates
A handful of factors determine LTL shipping rates. Think about these potential factors before choosing an LTL shipping method or carrier.
Weight and Dimensions
The first thing to consider when shipping via LTL is the package size. Specifically, the weight and dimensions are the most crucial measures.
The size and weight of your shipment dictate the LTL shipping rates. To be specific, the more a shipment weighs, the less you pay per hundred pounds. Each shipment is divided up into groups of weight.
The LTL carrier must also determine its degree of compactness or density to classify the shipment's bill of lading. Shippers calculate the total weight of the shipment divided by the total cubic feet. In addition, they factor in the dimensions of your shipment.
Freight Class
Once the weight and dimensions are calculated, the carrier can determine the freight class of your shipment.
Every shipment belongs to a specific classification. The number your LTL freight shipment received has been established by the National Motor Freight Classification (NMFC), also known as your NMFC code. By calculating your shipment's dimensions, your class determines how difficult your product is to hip and how much liability is involved.
If there are special loading equipment or precautions required, this will also affect what freight class your item is put into.
In total, there are 28 freight classes, ranging from 50 to 500. A lower-class number denotes a lower shipping cost.
Location
In short terms, the farther the location of your destination, the higher the price per-hundredweight of your shipment will be.
There are additional factors in location, such as any customer's delivery location needs, that determine shipping rates.
Most LTL carriers only operate within a certain geographical region. Before sending out a shipment, you must consider all the necessary pickups and drop-off spots. In some cases, shipments will need to be handed over from one LTL carrier to another to deliver.
Contributing Factors
In addition to weight and dimensions, freight class, and location, there are other less significant, yet still important, factors to consider.
Some LTL carriers perform extra services besides pickup and delivery, such as additional payment for fuel. If the LTL carrier has to go through limited access areas (construction sites, camps, rural locations, strip malls, prisons, etc.), you may be charged extra.
If you need your shipment to reach a specific location more quickly than the standard shipment time, you can request a quote for expedited shipping.
Each LTL carrier also has its own base rates and will vary from carrier to carrier. By basing their rate on volume, gross cost, and freight classification of your shipment, the carrier will provide you a quote per hundred pounds, and you should be able to receive a more accurate estimate on your LTL shipping rate.
Differences Between LTL and FTL
Certain factors and restrictions will determine whether you need LTL shipping or FTL shipping. As a result of those factors and conditions, you may need to request a full truckload to comfortably hold all your items or half a truckload where you only need a certain amount of space for your items.
Cost
The biggest reason LTL freight shipping is preferable over FTL is due to significant cost savings. In many cases, your shipment may only require the occupancy of a small space of a trailer rather than a full trailer. However, in some cases, if your shipment is large enough to fill an entire trailer, using FTL shipping can be less expensive than LTL shipping.
But in general, LTL shipping is cheaper overall.
Handling
Additional services also factor into the differences between LTL and FTL shipping. When preparing LTL shipments, most carriers will ensure the protection of your products with packaging or by consolidating your items into pallets or crates, as there is more risk involved with the transferring of goods from one carrier to another.
In FTL shipping, your shipment will almost always remain on a single carrier until it reaches its destination, so the risk of damaging goods is much lower. In the case of LTL shipping, your items might transfer from one truck to another mid-shipment.
The handling of your items will also depend on how fragile they are. If you only have a few delicate items, you will still want to ensure your items’ protection and safety. This will help guarantee your customer will receive the items both in good condition and on time.
Size
Size is the most important thing to consider when differentiating between FTL and LTL shipping. You must be certain of your products' sizes and dimensions. Otherwise, you could end up paying for the extra space you aren't using.
The names "full-truckload" and "less-than-truckload" are fairly self-explanatory. If your shipment weighs approximately between 500 to 5,000 pounds, go with LTL shipping. This will also leave space for other companies' shipments. However, if your shipment weighs up to 20,000 pounds, you'll want to stick with FTL shipping. In some cases, shipments that weigh 5,000 to 10,000 pounds can ship via either LTL or FTL.
Duration
FTL freight is for quick and speedy deliveries because your carrier can consolidate all your items into one trailer. On the other hand, LTL shipments may have to make several stops to reach their proper destination. Choosing between FTL and LTL depends on you and your customer's timeline.
Your LTL carrier should be able to provide an exact timeline of your shipment. Advanced tracking technology will also allow both you and your customer to track your shipment actively. In some cases, LTL carriers will even offer expedited shipping.
Preparing LTL Shipments
There are four key areas to consider when preparing LTL shipments: dimensions, documentation, packaging and labeling, and loading. Verifying these details ensures that you, the carrier, and your customer will be happy when the product reaches its delivery destination.
LTL shippers will always measure the length, width, and height of your items. Accurate measurements of your shipment are critical for carriers to determine how much space is needed in the carrier. LTL carriers fill their trailers based on each company’s exact amount of necessary space.
When it comes to documentation, the bill of lading should be as accurate as possible. A bill of lading is a document that acts as a receipt for shipped goods and a contract between a carrier and shipper. It includes the shipper's name, description of goods, freight class, weight and dimensions, and other important details. This receipt should give the carrier all the information they need to efficiently and appropriately deliver the shipped goods.
Throughout LTL shipping, your items may move from one carrier to another, which is why they must be properly packaged and labeled. Prior to pickup, heavier items should be placed on the bottom of pallets, while lighter, fragile items go on the top.
If you have fragile packages, labeling them as such can help the carrier ensure they're handled with care and avoid any potential damages throughout the journey.
Finally, after completing all the necessary tasks, your shipment is ready to be loaded. The shipper should not have all the critical information in hand to ensure your shipment gets from point A to point B just as it should.
What to Look For in a Trustworthy LTL Carrier
When searching for the best LTL carrier, there are certain characteristics you’ll want to look for. Here are three important traits of a trustworthy LTL freight carrier.
Detail-Oriented
There are countless details that go into the process of shipping. At Gilbert International, we pay close attention to detail, regardless of what you’re shipping. You can have confidence that your package will be delivered safely.
The best companies will make sure everything is well taken care of, and nothing goes unnoticed, so you can rest easy knowing your cargo is in good hands. Reputable and detail-oriented companies like Gilbert International take every precaution to ensure your shipments have a smooth journey and arrive safely. But tracking the details and keeping you in the loop is a crucial part of our process, too.
Offers a Variety of Services
A good carrier will notify you of all the services they offer. LTL freight shipping isn't just the transport of goods from one place to another. Some shipments require special services.
Make sure you do your research and become familiar with the additional services your shipment might require. At Gilbert, we’re eager to make sure your items are loaded and ready to go with all the requirements.
Dedicated, Reliable Customer Service
Lastly, you'll want to ensure your LTL carrier has world-class customer service. Regardless of what you plan on shipping, you want every shipment to be handled with care and attention to detail. This will ensure all the logistics of your shipments flows seamlessly.
We find that reliable customer service is of great value and should always be first and foremost in the LTL freight carrier's mind. Your shipments must reach their destination in a timely and appropriate manner. As a carrier that provides accurate policy information and affordable rates while maintaining quality service, we prioritize our customer’s needs.
At Gilbert, we want you to feel like our most important customer, and we’re obligated to treat you as such. Our team’s willingness to help speaks volumes about our reliable customer service.
Why You Should Choose LTL Freight Shipping
Over the past few years, LTL freight shipping has experienced a surplus in growth. LTL services give you more options to choose from in addition to your standard shipping methods. The significantly lower cost, better security, and overall better results for the environment are just a few contributing factors to the industry's sudden growth.
LTL shipping is an ideal option for smaller businesses not looking to spend money on wasted space on full truckloads. Freight rates are typically lower than most since your items only require a smaller space to be used. Customizable services allow you to get your items shipped and delivered fully instant and within your specified timeline.
The majority of LTL carriers also enable you to actively track your shipment, so both you and your customers can make sure it gets where it needs to be on time.
By choosing Gilbert International’s LTL freight service, you're not only cutting back on cost and ensuring secure transportation of goods, but you're also establishing your company as a quality, reliable service.