LTL in Freight: Definition & Implications

Author: Bryan Van Suchtelen
January 17, 2024

Carpooling and LTL shipping have a lot in common. With carpooling, you save on gas, reduce your carbon footprint, and even contribute to breaking up traffic jams. Sure, the drive might take a little longer, considering there’s an extra bladder to account for and a detour here and there. But the cost of gas is split and that carpool lane is a savior on long road trips.

Less-than-truckload shipping (LTL shipping) is similar—except instead of adding a passenger, you’re adding other companies’ products or goods to the truck. If you or your company is looking to transport products that don’t require a full truckload, LTL is a cost-effective and eco-friendly method of doing so by sharing space with other shipments. 

Read on to learn what LTL shipping is, as well as its advantages.

Defining LTL in Freight: What is LTL Shipping?

“Less than truckload” gives a fairly accurate starting definition for what LTL shipping entails. It’s intended for smaller shipments that are typically between 100 and 10,000 pounds of goods. This amount of product would typically only use a portion of a commercial truck.

There are many benefits to using LTL, some of which include:

  • Cost-effective – Because you’re only paying for the portion of the truck you use, you don’t lose out on “dead space” created from not shipping enough product.
  • Eco-friendly – Considering that you’re sharing the truck with other companies’ shipments, you’re technically reducing your downstream carbon footprint. 
  • Fast shipping – While not as fast FTL (full truckload) shipping, LTL still utilizes the streamlined operations of established commercial shipping companies.
  • Secure – Because in LTL, trucks are maximizing space, your products will benefit from strategic, secure placement—typically packed in pallets to avoid any damage or disruption.
  • Logistically efficient – LTL leverages all the logistical efficiency of FTL and commercial shipping, while still discounting your shipments to just the amount of space you need. 

While these perks are ideal for many small business owners or e-commerce entrepreneurs, there are also some drawbacks to consider when weighing LTL vs FTL. For instance:

  • LTL shipments are more prone to unexpected delays due to sharing a truck and making multiple stops. In most cases, the shipping company determines the route of product shipments, removing the final measure of control for businesses.
  • Breakage, loss, or miscommunication may occur depending on the other goods in the truck and the amount of documentation performed. LTL shipping necessitates an extra degree of due diligence when vetting commercial shipping companies.

LTL shipping happens on a schedule and in certain lanes across the continental U.S. each day, not unlike a train or bus schedule. 

Competitive LTL & Truckload Rates

LTL Carrier Types & Process

Examples of LTL carrier types include nationwide carriers operating from east to west and north to south (e.g., FedEx Freight), super-regional carriers covering two or more regions, regional carriers like New England Motor Freight serving a single state (e.g., Cal State Xpress in California), and others providing extensive coverage across the country.

A typical LTL shipment is loaded and unloaded at several terminals. Usually, a local driver within your city will pick up the shipment and pass it off to a series of “line haul” or “over the road (OTR)” drivers who will deliver it to each terminal until it reaches its final destination. In the destination city, the shipment will be collected and delivered by a local “city unit.”

LTL Freight Classes

When making an LTL shipment, it’s crucial to classify your cargo appropriately in order to ensure it’s properly handled at each terminal. For instance, you’ll need to assign your shipment to one of 18 freight classes.

Examples of LTL freight classes include:

  • Class 50: Durable, heavy cargo on standard pallets
  • Class 92.5: Items with a similar weight and durability to computers, monitors, and refrigerators—mostly electronics and appliances
  • Class 500: The most expensive class, used for light, high value items (e.g., gold dust) or generally low-density items (e.g., ping pong balls).

Freight class can be determined online with a freight class calculator (provided by your carrier), and will affect the cost of your LTL shipment.

Freight class takes into account a variety of factors, like density (how heavy the package is for its size), liability (whether extra security is needed due to the package’s value), handling (whether certain protocols need to be followed to handle the package), and stow-ability (if it fits easily into the truck with the other packages).

The Importance of Logistics in LTL Shipping

Properly documenting and classifying your shipment will help ensure it arrives in one piece, especially when it’s being stowed with a variety of different items.

Using a transportation management system (TMS) is also recommended when LTL shipping. A TMS can help you choose which carrier is best (and most cost-effective) for you by optimizing routes and combining truckloads on similar routes where possible.

Ultimately, if you are looking to ship products in a cost-effective and eco-friendly manner, LTL is likely the way to go. The case in which FTL is a more practical option is if you are shipping a full 53-foot truckload (or nearly a full truckload) of heavy cargo. Additionally, in rare cases, cargo may be considered especially fragile or require special handling (such as temperature control), which might necessitate an individual truck to avoid mishaps.

Implications of LTL in Freight

While we touched on the advantages above, it’s important to really break down LTL’s benefits. The conversations around LTL vs FTL vs traditional shipping can cause significant headaches for business owners and can bring unnecessary confusion.

To that end, let’s focus on cost efficiency, operational advantages, and environmental impact.

Cost Efficiency

LTL is considered a cost-effective method of shipping compared to FTL, as you only pay for the space on the truck that your shipment uses (while with FTL, you pay for the full truckload, with rates adjusted for the distance traveled).

On average, trailers on the road are only 60% full, and 20% of trailers are traveling completely empty. This means that with FTL shipping, you’re likely paying for 40% of the space on a truck that goes unused. One study showed that across all California cut flower growers, $20 million could be saved in annual transportation costs by shipping LTL.

Operational Advantages

Another reason to consider shipping LTL are the logistical advantages. LTL is an operationally efficient way to ship, as it often comes with perks like indoor delivery and liftgates. 

Moreover, LTL shipments are able to depart without the need to wait to fill a truck with products, and have opportunities to be transferred to trucks taking a more efficient route at each terminal stop. LTL is more flexible and scalable than FTL, especially if your business anticipates fluctuating demand in a given year. Due to the variety of carrier types offered for LTL shipments, these shipments can sometimes reach remote locations that can’t be reached via FTL.

When “freight consolidation” practices like LTL are used to get goods efficiently between places that generate and absorb a lot of freight, the result is lower costs and better service for everyone at both point A and point B. 

Environmental Impact

Transportation is the sector that contributes the most to greenhouse gas emissions, and its emissions are expected to double by 2050. Using LTL as a means to reduce your (or your company’s) carbon footprint works the same way as carpooling. Filling each truck to 100% capacity means less empty trucks on the road, powered by fossil fuels. These carbon reductions compound over time, amounting to a greatly reduced impact on the environment.

The average delivery truck uses 1,899 gallons of gasoline per year, and the average tractor trailer uses 11,818 gallons of gasoline per year. With the aforementioned 20% of freight carriers on the road empty and 40% of space in trailers containing cargo left unused, those emissions add up.

LTL is an easy, cost-effective way for your company to ship, especially for durable cargo in relatively small quantities (under 20,000 pounds).

Ship Efficiently & Save Money

LTL or “less than than truckload” shipping is a cost-effective, eco-friendly alternative to FTL (“full truckload”) shipping. By only paying for the portion of the delivery truck you use and sharing the truck with other cargo, you can cut costs while significantly reducing greenhouse gas emissions. 

LTL also has operational benefits, like allowing warehouses in high-traffic areas to offer better service and lower prices. If you’re shipping small amounts of cargo that are not rushed and don't require special care, LTL shipping is a no-brainer (it’s like cruising in the carpool lane).

If you’re interested in learning more about shipping options and how to save on costs, explore Lojistic. We have the data platform you need to see cost-savings across all carriers and modes. Plus, you can get started completely free. Create your free account today.

Sources: 

Georgia Institute of Technology. LTL Module 1. https://www2.isye.gatech.edu/~jvandeva/Classes/6203/2011/LTLTrainingManual1

University of Southern California. Acyclic Mechanism Design for Freight Consolidation. https://bpb-us-e1.wpmucdn.com/sites.usc.edu/dist/0/249/files/2020/10/acyclic_ts_special_issue_07222020-1.pdf

Massachusetts Institute of Technology. Logistics Clusters. https://covid-19.mitpress.mit.edu/pub/p5ivzwf1/release/1

Massachusetts Institute of Technology. Impact of Freight Consolidation on Logistics Cost and Emissions. https://ctl.mit.edu/pub/thesis/impact-freight-consolidation-logistics-cost-and-emissions

Environmental Protection Agency. Sources of Greenhouse Gas Emissions. https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions

U.S. Department of Energy. Average Annual Fuel Use by Vehicle Type. https://afdc.energy.gov/data/10308

Author

Bryan Van Suchtelen

Bryan Van Suchtelen

Corporate Director of Parcel Rate Services

With more than 34 years of parcel experience, Bryan Van Suchtelen is the Corporate Director of Parcel Rate Services at Lojistic, one of the nation’s top logistics and transportation cost management companies.

Prior to joining Lojistic in 2015, Bryan enjoyed a 26-year career with UPS where his roles included Pricing, Field Sales and Director-level Sales Management of some of UPS’s largest customers.

At Lojistic, Bryan leverages his wealth of experience/expertise to identify and execute supply chain cost management solutions for parcel shippers of all sizes. Bryan has helped his customers reduce their shipping spend by tens of millions of dollars.
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