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Less-than-truckload shipping or less than load (LTL) is the transportation of relatively small freight. The alternatives to LTL carriers are parcel carriers or full truckload carriers. Parcel carriers usually handle small packages and freight that can be broken down into units less than 150 pounds (68 kg). Full truckload carriers move freight that is loaded into a semi-trailer. Semi-trailers are typically between 26 and 53 feet (7.92 and 16.15 m) and require a substantial amount of freight to make such transportation economical.
LTL carrier operations versus full truckload operations
There are several different perspectives as to what is actually considered LTL. Full truck load (FTL) carriers can put anywhere from two to six different shipper's shipments on a trailer and since each shipment is technically "less than a truckload" they would consider that to be LTL. There are also freight companies who do not specialize in truck loads, but rather, consolidate larger volume shipments from about 2 to 12 pallets (or about 4000 to 24000 pounds) and consider themselves LTL Carriers. Finally, the most commonly referenced LTL is shipped via "common" carriers who handle freight above what would normally ship via FedEx Ground, or UPS or U.S. Mail parcel services (about 150 pounds) to just under what would usually be considered a Truck Load, at about 20,000 pounds or more than 14 pallets. LTL common carriers are also more likely to accept loose (non-palletized) cargo than the other two. LTL shipments typically weigh between 151 and 20,000 lb (68 and 9,072 kg). Less than Truckload carriers use "hub and spoke" operations where small local terminals are the spokes ('end of line'), and larger more central terminals are the hubs (also called Distribution Centers or DC's). Spoke terminals collect local freight from various shippers and consolidate that freight onto enclosed trailers for transporting to the delivering or hub terminal, where the freight will be further sorted and consolidated for additional transporting (also known as linehauling). In most cases, the end of line terminals employ local drivers who start the day by loading up their trailers and heading out to make deliveries first. When the trailer is empty, they begin making pickups and return to the terminal for sorting and delivery next day. Because of the efficiency of this order of operations, most deliveries are performed in the morning and pickups are made in the afternoon.
Pickup and delivery drivers usually have set casual routes which they travel every day or several times a week, so the driver has an opportunity to develop a rapport with their customers. Once the driver has filled their trailer or completed their assigned route, they return to their terminal for unloading. The trailer is unloaded and the individual shipments are then weighed and inspected to verify their conformity to the description contained in the accompanying paperwork. All LTL freight is subject to inspection ('S.T.I.'), though not all freight is inspected. Next, the freight is loaded onto an outbound trailer which will forward the freight to a breakbulk, a connection, or to the delivering terminal. An LTL shipment may be handled only once while in transit, or it may be handled multiple times before final delivery is accomplished.
Transit times for LTL freight are longer than for full truckload freight (FTL). LTL transit times are not directly related only to the distance between shipper and consignee. Instead, LTL transit times are also dependent upon the makeup of the network of terminals and breakbulks that are operated by a given carrier and that carrier's beyond agents and interline partners. For example, if a shipment is picked up and delivered by the same freight terminal, or if the freight must be sorted and routed only once while in transit, the freight will likely be delivered on the next business day after pickup. If the freight must be sorted and routed more than once, or if more than one linehaul is required for transportation to the delivering terminal, then the transit time will be longer. In some instances, the LTL freight has up to 10 days of delivery time frame. Also, delivery to beyond points or remote areas will almost always add days to the transit time.
The main advantage to using an LTL carrier is that a shipment may be transported for a fraction of the cost of hiring an entire truck and trailer for an exclusive shipment. Also, a number of accessory services are available from LTL carriers, which are not typically offered by FTL carriers. These optional services include liftgate service at pickup or delivery, residential (also known as "non-commercial") service at pickup or delivery, inside delivery, notification prior to delivery, freeze protection, and others. These services are usually billed at a predetermined flat fee, or for a weight based surcharge calculated as a rate per pound or per hundredweight.
Integrating FTL and LTL carriers for shipper cost savings
Shippers with enough volume of LTL freight may choose to use a full truckload carrier to move the freight directly to a break-bulk facility of an LTL carrier. For example, a North Carolina shipper with a large quantity of shipments bound for Western US States (for example, California, Nevada, Oregon, Washington, and Idaho) may be able to realize significant cost savings by having a FTL carrier, known as a linehaul carrier, transport the freight to a break-bulk facility in a central location near the ultimate destination of the freight (in this example, delivery to a break-bulk facility in California for parceling out into LTL lots for transport to the final destinations). The use of an FTL carrier to transport this freight generally provides an overall cost savings because the freight will travel fewer miles in the FTL carrier's network, as well as a reduced overall fuel surcharge cost—that is, one FTL carrier travels the distance to the break-bulk facility for a single carrier's price while using only the fuel required for that FTL truck, vs. several LTL carriers at each carrier's price, each covering some of the same path to the final destinations and each using the fuel required for each one of the LTL trucks. A further benefit is realized in both loading cost and product damage, because the freight will not need to be unloaded and reloaded as many times. Additionally, this reduces the incidence of loss and the opportunity for pilfering or theft, because all of the freight travels together and is not broken down into LTL loads until it reaches the break-bulk distribution facility.
LTL operations versus parcel carrier operations
Parcel carrier operations
A parcel carrier traditionally only handles pieces weighing less than approximately 150 pounds (68 kg). Parcel carriers typically compete with LTL carriers by convincing shippers to break larger shipments down to smaller packages. Parcel carriers typically refer to multipiece shipments as "hundredweight" shipments as the rating is based on 100 pounds (45 kg). The hundredweight rate is multiplied by the shipment's weight and then divided by 100 and then rounded up to the nearest hundred.
LTL carrier operation
LTL carriers prefer to handle shipments with the fewest handling units possible. LTL carriers prefer a shipment of 1 pallet containing many boxes shrink wrapped to form one piece rather than many individual pieces. This reduces handling costs and the risk of damage during transit. Typically, the per-pound rates of LTL carriers are less than the per-pound rates of parcel carriers.
Both LTL carriers and XL parcel carriers are similar in the fact that they both use a network of hubs and terminals to deliver freight. Delivery times by both types of service providers are not directly dependent upon the distance between shipper and consignee. Also, using an LTL carrier is very similar to that of using a parcel carrier. The shipper often has a regular, if not daily, pickup schedule and can log onto the carriers homepage to schedule pickups, track shipments, print paperwork, and manage billing information.
Preparing shipments for LTL carriers
Freight sent via LTL carriers must be handled several times during transit, often by different carriers. It must be packaged to protect it from scuffing, vibration, crushing, dropping, humidity, condensation. Thus, it is normally good practice to load freight onto pallets or package freight into crates. Sturdy shipping containers such as corrugated fiberboard boxes are normally acceptable as well, but pallets are preferred. Carriers have published tariffs that provide some guidance for packaging. Packaging engineers design and test packaging to meet the specific needs of the logistics system and the product being shipped.
Proper packaging freight serves several purposes:
- It helps protect the freight from handling and transit damage.
- It helps protect freight from being damaged by shipper's freight.
- It helps reduce package pilferage
- It helps to avoid loss situations; situations in which some of customer's freight is separated from the rest and lost in transit.
- Type of shipment: pallet, drum, crate, skid, bags, rolls, reels, bales or other.
- Size: height width depth.
- Weight, each piece and total.
- Insurance value coverage, if any.
- Liftgate Service requirements, if any
- Find the correct National Motor Freight Classification code.
- Arrival Notice, if any
- Hazardous Materials Notice, if any
- Residential Delivery Notice.
Since freight sent via LTL carriers is subject to misrouting or misloading, it is a good practice to put the tracking number on each side of each piece of freight. If the destination state and zipcode are affixed to each side as well, misloading is less likely to occur. Even though it is not required, it is good practice to affix a relatively large label including the four letter carrier code, tracking number, destination station, and destination zipcode of the shipment (i.e. ABFS123456789 GA 30301). The easier it is for dockworkers to identify an individual shipment, the less likely it is to be misrouted. The value or type of contents should not be advertised on the package to help reduce loss. If the only piece of identification is the tracking number, the dockworker will have more difficulty identifying the shipment's pieces, hence the chances of freight being loaded onto the wrong trailer are greater, increasing the transit time and increasing the probability of the shipment being lost. Proper labels, bar codes, and RFID are important for proper routing and delivery.
Intermodal transportation of LTL shipping
Not all LTL shipments travel by truck only. LTL carriers rely on rail or air to forward some freight toward its destination. LTL carriers are normally able to deal with railroads more effectively than small shippers since LTL carriers typically send a large volume of freight daily. For example, a significant portion of rail intermodal traffic consists of truck trailers, often dozens in a single intermodal train, carrying LTL freight. LTL carriers are able to monitor railroad performance to ensure delivery of freight within the specified delivery window. An Intermodal freight transport shipment employs several methods of transporting goods from start to finish. For instance, one shipment will start out on the railroad, then be transferred to an ocean carrier, and end up on a truck before delivery.
Intermodal shipping is considered advantageous by some shippers because there is no handling of the freight when it changes from one carrier to the next. Pallets are used to consolidate many items into one easy-to-move container. Because handling is reduced, it also reduces damage and loss, increases security, and allows quicker transport.
- McKinlay, A. H. (2004). Transport Packaging. IoPP.
- Fielder, R. M (1995). Distribution Packaging Technology. IoPP.
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- Lojistic, How to Calculate Less-Than-Truckload LTL Freight Rates