Less-Than-Truckload (LTL) delivery is a fundamental method of freight transportation that provides a middle ground between small parcel services and high-volume shipping. It is specifically designed for businesses that have shipments too substantial for carriers like postal services but not large enough to occupy an entire semi-trailer. This model allows shippers to move their goods efficiently by paying only for the space their cargo occupies on a truck. LTL shipping is a cost-effective solution for managing the movement of goods in the modern supply chain.
Defining Less-Than-Truckload (LTL) Shipping
Less-Than-Truckload shipping refers to the movement of palletized freight that does not require the use of a full 48-foot or 53-foot trailer. LTL shipments typically weigh between 150 pounds and 10,000 pounds, although some carriers may accommodate loads up to 20,000 pounds. The freight is usually secured on standard pallets or crated, ensuring it can be easily handled by forklifts and pallet jacks during transit.
The core principle of LTL is consolidation, where multiple individual shipments from various customers are combined onto a single truck trailer. By sharing the space and the cost of the transportation vehicle, shippers can significantly reduce their individual freight expenses. This shared-space model necessitates that LTL cargo must be durable and packaged to withstand multiple transfers and the movement of other freight within the trailer.
The Operational Mechanics of LTL
The LTL delivery process relies on the hub-and-spoke model, which differentiates it from direct shipping methods. When a carrier picks up a shipment, the freight is first transported from the shipper’s dock to a local terminal, referred to as a spoke location. At this initial terminal, the cargo is consolidated with other shipments traveling in the same general direction.
The consolidated truckloads then travel the line-haul portion of the journey to a larger, central distribution center, or hub. At the hub, the freight is deconsolidated, sorted, and then reloaded onto different trailers based on specific destination routes. This process of transfer and re-consolidation may occur at multiple intermediate terminals before the shipment reaches the final destination terminal. The local driver at the destination terminal then delivers the shipment to the consignee, completing the final spoke of the journey.
Key Benefits of Using LTL
The primary advantage of choosing LTL shipping is the cost efficiency it offers to businesses. Shippers only pay for the fraction of the trailer space and weight capacity their goods consume, rather than the flat rate required for a full truckload. This structure makes LTL an accessible option for small and mid-sized businesses that do not generate enough volume for dedicated shipping.
LTL allows companies to improve supply chain flexibility by enabling smaller, more frequent product shipments. This capability helps businesses reduce the need for large safety stock, thereby lowering inventory holding costs. Consolidating multiple smaller shipments into a single truck minimizes the number of vehicles on the road, contributing to a reduction in fuel consumption and a more environmentally conscious transportation model.
Understanding LTL Freight Class and Pricing
LTL pricing is a multi-faceted system that is not determined solely by the shipment’s weight or the distance traveled. The industry relies on the National Motor Freight Classification (NMFC) system to standardize pricing, which assigns one of 18 freight classes (ranging from 50 to 500) to nearly every type of commodity. This class designation is a major factor in calculating the final shipping cost.
The freight class is determined by four characteristics of the cargo:
- Density measures the item’s weight relative to its volume, with high-density items receiving lower, less expensive classes.
- Stowability refers to how easily the freight can be loaded and transported with other goods, penalizing cargo that is hazardous, excessively long, or cannot be stacked.
- Handling assesses any unique care required during transport, such as fragility or awkward dimensions, which can increase the class.
- Liability accounts for the potential for theft or damage, with high-value or perishable goods being assigned a higher, more expensive classification.
The base rate calculated using weight, distance, and freight class is supplemented by various accessorial charges for services that extend beyond standard dock-to-dock transport. Common accessorial fees include charges for liftgate service, necessary when a receiving location lacks a loading dock. Other surcharges involve inside delivery or pickup, residential delivery, or limited access fees for locations like construction sites. Carriers also apply detention charges if their driver is delayed beyond the allotted time, and they may charge for re-delivery if the consignee is unavailable during the initial attempt.
LTL vs. Full Truckload (FTL)
The decision between LTL and Full Truckload (FTL) shipping hinges on a trade-off between cost, speed, and handling. FTL involves one shipment from a single customer occupying the entire trailer, providing a fixed cost structure regardless of the exact weight, as long as it is within the legal limit. LTL is a shared cost model where multiple shippers contribute to the price, making it more economical for smaller volumes.
Transit time is the primary differentiator, with FTL being a direct, point-to-point service that is faster. LTL shipping is slower because of the necessary stops and transfers at various terminals during the hub-and-spoke process. This difference also affects cargo handling, as FTL shipments are loaded once and unloaded once, minimizing the risk of damage. LTL freight, however, is handled multiple times at consolidation points. FTL is generally the preferred option for shipments weighing over 15,000 pounds, time-sensitive deliveries, or fragile goods.
Preparing and Managing an LTL Shipment
Proper preparation of an LTL shipment is necessary to ensure the cargo survives the multiple transfers inherent in the consolidation process. Shippers should secure their goods on durable pallets or within crates, ensuring the weight is distributed evenly with heavier items placed at the bottom. The freight must be tightly secured using shrink-wrap or banding to prevent shifting and protect the contents from adjacent cargo.
The Bill of Lading (BOL) serves as the legal contract between the shipper and the carrier. The BOL must clearly state the shipper and consignee information, the number of handling units, the total weight, and a detailed description of the goods, including the correct NMFC freight class. Any required accessorial services, such as a call-before-delivery notification, must be explicitly noted on the BOL to avoid unexpected fees or delays. Once the shipment is picked up, the carrier issues a Pro Number, the unique identifier used by both the shipper and consignee to track the cargo until final delivery.