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What is LTL Shipping? Why is it important to you?

13 March 2017

What is LTL shipping?  Simply put, it stands for Less than Truckload shipping.  In other words, in contrast to FTL or Full Truckload shipping, where the entire available space on the truck is taken up with your goods, LTL shipping combines shipments from multiple clients.

LTL shipments usually weigh more than 100 pounds, which is greater than what is generally accepted by couriers and small parcel carriers.  At the same time, they aren’t large enough to make up a full truckload.  By combining freight shipments with other customers, it saves money.

LTL shipping is usually somewhat slower than FTL shipping, but it is also a more economical choice.

Apart from the basic difference between LTL and FTL shipping, what are some of the important facts about LTL shipping?

First of all, the amount you will pay for your shipment is based on the amount of space your freight (what you are shipping) requires on the truck, what it weighs, its freight class (or classification), and its lane.  

Let’s take look at some important shipping terms that will help you better understand the language of the shipping industry.

Accessorials:  This refers to additional services offered by a carrier, such as packing, unpacking, long haul fees, extra pick-ups, fuel price increases and so on.  The major difference between accessorials and surcharges is that accessorials are usually charged post shipment.  As of now the most common accessorials are residential delivery adjustments, weight adjustments, and additional handling charges.  

Accessorials are generally included in supplemental freight invoices, and can be vague.  The best way to limit exposure to these charges is to hire a freight broker, who will help you find the best shipping service for your needs.

Bill of Lading:  A bill of lading is defined as a document issued to the shipper (the customer) by a carrier or its agent as a contract of carriage of goods.   Further, it is a receipt for freight that has been accepted for transportation, and is required to be shown when taking delivery at the destination.  It is proof of ownership of the freight, and can be issued in negotiable or non-negotiable form.  It is often used as a letter of credit transactions in the negotiable form, and be bought, sold, traded, or used as security.  The bill of lading is required for all compensation claims for any damage, loss, delays, or ownership disputes for freight.  It is a legal document governed by the Hague rules.

Bulk Freight:  This refers to unpackaged commodities that are transported in large quantities, such as grain, oil or gravel.

Carrier:  A carrier is a person or company which transports goods with their own equipment, such as truck, trains, ships or aircraft.

Consignee: The person or location to whom the shipment is to be delivered whether by land, sea or air.

Container (Shipping Container): Standard-sized rectangular box used to transport freight by ship, rail or highway. International shipping containers are 20’ or 40’, conform to International Standards Organization (ISO) standards and are designed to fit in ships’ holds. Domestic containers are up to 53’ long, of lighter construction and are designed for rail and highway use only.

FTL:  FTL is simply an abbreviation for Full Truck Load.  A full truck load is a shipment from a single customer that either fill the truck or partially fill it, but that occupies the entire truck.  It’s more expensive than LTL shipping, but faster.  It is the most common choice for delivering bulk foods such as fresh produce.

Freight:  Goods transported by truck, train, ship or aircraft, also sometimes referred to as load, shipment, consignment, delivery, cargo or merchandise

Freight Broker:  A freight broker is a person or organization that works as a liaison between a person or organization requiring shipping services and an authorized carrier.  Freight brokers are not shippers or carriers, but work to connect those needing freight transported and those who transport freight.

Freight class: In the USA, every commodity or product type has been assigned a National Motor Freight Classification by the National Motor Freight Traffic Association  and a corresponding classification for LTL freight shipments.  This system is standardized to give consumers a uniform pricing structure when shipping freight.  There are 18 shipment classes total, class 50 being the least expensive and class 500 being the most expensive.

Freight classification is determined by a number of factors, including weight, length, height, density, ease of handling, value and liability for things such as theft, damage, breakage and spoilage. More information on determining.  The following is a list of freight classes listed from lowest to highest cost.

 

Class Cost Examples Weight Range Per Cubic Foot
50 – Clean Freight Lowest Cost Fits on standard shrink-wrapped 4X4 pallet, very durable > 50 lbs
55 Bricks, cement, mortar, hardwood flooring 35-50 pounds
60 Car accessories & car parts 30-35 pounds
65 Car accessories & car parts, bottled beverages, books in boxes 22.5-30 pounds
70 Car accessories & car parts, food items, automobile engines 15 to 22.5 pounds
77.5 Tires, bathroom fixtures 13.5 to 15 pounds
85 Crated machinery, cast iron stoves 12-13.5 pounds
92.5 Computers, monitors, refrigerators 10.5-12 pounds
100 Boat covers, car covers, canvass, wine cases, caskets 9-10.5 pounds
110 Cabinets, framed artwork, table saws 8-9 pounds
125 Small Household appliances 7-8 pounds
150 Auto sheet metal parts, bookcases, 6-7 pounds
175 Clothing, couches stuffed furniture 5-6 pounds
200 Auto sheet metal parts, aircraft parts, aluminum table, packaged mattresses, 4-5 pounds
250 Bamboo furniture, mattress and box spring, plasma TV 3-4 pounds
300 Wooden cabinets, tables, chairs setup, model boats 2-3 pounds
400 Deer antlers 1-2 pounds
500 – Low Density or High Value Highest Cost Bags of diamonds, ping pong balls < 1 pound

 

Lane:  The lane refers to the pickup and delivery destinations of the cargo.

LTL:  LTL is the abbreviation for Less than TruckLoad shipping.  This is where more than one customer ships their freight on the same truck, usually to multiple destinations.  It tends to be slower, but less expensive than FTL shipping.

NMFTA:  The National Motor Freight Traffic Association, Inc is a nonprofit membership organization made up mainly of interstate motor carriers.  Its headquarters are in Alexandria, Virginia.  The NMFTA  is the body that sets the standards for freight classification

NMFC:  The National Motor Freight Classification®, which is the standard for freight identification and classification.  Along with standardizing freight classification, it also specifies the minimum packaging requirements to ensure both safe and practical handling, while also ensuring that the product is reasonably protected from shipping damage.

Shipping rates:  Shipping rates are what it costs to deliver shipments from one place to another via a carrier.  LTL rates are determined mainly by the distance from source to delivery, the weight, the classification and the accessorials.

3PL:  There is a big difference between a freight broker and a 3PL service.  3PL is a common abbreviation for Third Party Logistics.  Unlike a freight broker, 3PL providers cover everything from integrated operations, warehousing and transportation services which can be scaled according to the needs of their clients, including changes based on changing market conditions.  3PL providers generally include freight brokerage in their services.  They can be an extremely important part of your company supply chain.

Supply Chain:  A supply chain is the system of supply and demand that moves a product or supply from the supplier to the customer.  It is often very complex and dynamic, an ever-evolving system of people, resources, companies, information, resources and activities.

 

Now that we have some common definitions for reference, let’s go back to our original question:  What is LTL shipping and why is it important to you?

If your company does a lot of bulky shipping, but only in limited quantities, LTL is a solution you should be considering.  As long as your customers are content to accept longer shipping times, LTL is most likely the most economical way for you to ship your product to market.

Unlike FTL shipping, LTL shipping prices are based only on the space your freight occupies, which is a considerable savings for a small load that might consist only of a few pallets.  

Most freight companies offer tracking nowadays, so there is no need to be concerned about your cargo being shipped along with multiple other shipments, possibly going to multiple locations.  Individual shipments are assigned a code that is then tracked using Electronic Data Interchange (EDI) technology among LTL carriers.  Updates on the location and estimated delivery time are available from the shipper’s website.

 

Freight Retriever allows you to shop wholesale negotiated freight/LTL rates from a list of contracted carriers. Make freight/LTL as easy as shipping a FedEx or UPS package.  

For more information, please be sure to contact us.

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