Less Than Truckload (LTL) Shipping: What You Need to Know

Managing shipments is all about coordination, utilization, and optimization at all levels. So what happens when a business owner needs to arrange for a shipment that would require less space (and cost) than a full truckload? 

This is when we get into less than truckload (LTL) shipping, an underutilized strategy that allows business owners to transport smaller shipments in a cost-effective manner.

In this post, we’re going to break down everything you need to know about less than truckload shipping, from what it is and how to make use of it, to how you can utilize it in your business to improve your operational efficiency. By the end of this guide, less than truckload freight will be just another tool in your managerial toolbox.

Definition of LTL Shipping

What does LTL stand for in shipping? LTL (Less than Truckload) shipping refers to a shipping service or shipment itself that does not occupy an entire truckload. In other words, less than truckload shipping means that there is space for other goods on the same truck.

It can help to define LTL by contrasting it with two other shipment models: FTL and PTL. FTL stands for full truckload and means that a truck's entire carrying capacity is dedicated to a specific shipment type. Meanwhile, PTL stands for partial truckload, and refers to large shipments that occupy more than half of the truck but still not the entirety of it.

LTL categorization, from the number of pallets to the maximum weight for each pallet, can vary. However, it tends to be deemed as a quantity of between 1 to 6 pallets. Partial truckload then tends to be a quantity of 7 to 28 pallets, while a full truckload would be over 29. But again, pallet size, weight, and individual carrier policies can impact these numbers.

Here’s a handy chart to make it easier to visualize:

Note: Each of these will vary in categorization depending on carriers and logistics. 

When Is LTL Used?

We've discussed LTL freight meaning less than truckload shipments. But why would a business owner want to use less than a truckload?

There are a few common scenarios for this. For example, you may need to send out multiple small shipments, transport freight across a region, or simply not require a full trailer for your freight. In these cases, it would be extremely costly to utilize a full truck that’s nowhere near maximum capacity.

This is when business owners start to consider less-than-truckload freight. 

LTL services will transport your shipment along with one or multiple shippers or customers. With LTL meaning that only some of a truck’s total F&B is dedicated to your shipment, a LTL carrier will likely make multiple stops to pick up and deliver other goods while in transit. 

That’s where LTL shipping is so popular for industries with quick product turnover, like retail and F&B. You can use this to your advantage, cost-sharing with other shippers and flexibly choosing from carrier options depending on who has room on their trucks.

It’s worth taking note of how profitable LTL shipping can be when utilized correctly. According to the Boston Consulting Group, LTL trucking only accounts for about 1% of domestic freight tonnage, yet reaps about 6% of total revenue share.

LTL’s Impact on Freight Procurement

With LTL trucking meaning shipments that take up a varying but limited amount of space, LTL freight often has variable pricing models. The National Motor Freight Classification (NMFC) system assigns freight classifications based on four key factors, including density, handling, storability, and liability. Each of these has an impact on your potential LTL shipping costs. Additionally, factors such as distance, detention, liftgate, and required delivery speed can impact pricing.

With this in mind, careful carrier selection is critical to ensure you’re reaping the full financial benefits of utilizing less than truckload freight. Common pain points include subpar shipping routes and geographic coverage leading to delayed deliveries. There’s also a potential lack of transportation and communication while freight is in transit to consider. Additionally, you’ll want to compare prices to make sure that you’re signing up for a partnership at the best price point for your company.

This is where a tool like ShipperGuide comes into play. ShipperGuide is a Transportation Management System (TMS) that allows you to access real-time data and analytics for your shipments. It also provides a built-in interface to source real-time LTL bids and negotiate directly with carriers, helping you secure competitive rates without the need for manual comparisons or benchmarking.

Achieve Efficiency One Pallet at a Time

Less than truckload shipping is a strategy that anyone overseeing supply chain logistics should be comfortable utilizing. Data shows that the global market for less than truckload freight is projected to reach $293.7 billion by 2030, signaling growing opportunities for business owners to incorporate cost-effective LTL shipping options.

Less than truckload shipping might sound like a logistical hassle, but transportation management software helps resolve any potential issues. ShipperGuide TMS provides features such as appointment scheduling to ensure efficient loading and unloading of shipments, guided carrier selection through side-by-side comparisons of services and rates, and even the option to monitor LTL and PTL commodities to ensure precise pricing for freight classes.

Click here to learn more about ShipperGuide!