From a broad standpoint ground transportation in the United States can be divided into two categories: LTL Freight and Truckload Freight. Each of these refers to the amount of freight shipped or the amount of space you purchase on the truck. In this article we will define the differences between both and discuss some other differences.
As a freight shipper it is important to understand the differences between LTL and Truckload freight shipping. From a basic standpoint both are about moving freight or goods from one place to another. Past that, both are very different in terms of the service level, price and what you can expect from the carrier. In many cases LTL freight moves via common carriers and truckload freight moves via contract carriers.
LTL shipments are typically less then 10,000 lbs and take up less then 12 linear feet of the trailer. LTL shipments typically run via common carriers although you can ship LTL via contract carriers. Truckload shipments on the other hand take up 50% to 100% of the visible space and weight capacity in the trailer.
A standard trailer size is 53 feet long. Given this 50% of the visible space would be 26.5 feet. Between the 12 foot mark and the 26.5 foot mark you get into two sub categories. In the LTL world shipments taking up this much space are called volume LTL and in the truckload world they are called partials. For many shippers the choice between the two depend on transit time, rate and service level.
All transportation rates are impacted by the supply and demand of equipment from one point to another. For example, for every 4 loads going into Florida there is 1 load coming out. This means the rate going to Florida is much higher then the rate coming out. Both LTL and Truckload freight shipping are impacted by supply and demand.
LTL freight rates typically come with a higher cost per unit then truckload. This is generally because there is more handling cost associated with LTL shipments. Truckload shipments come with a lower cost per unit because you are buying in bulk.
LTL rates are generally based on a tariff. As common carriers LTL carriers are required to maintain a public tariff that says how much they charge. Most shippers are able to negotiate discounts by leveraging their volume. If you don’t have a lot of volume to negotiate beyond the carriers “courtesy discount” it might be good to check out the rate you could get from an LTL broker. Truckload rates are generally negotiated on a per load contract basis and determined by market supply and demand for the equipment type and lane.
Accessorials are handled much differently in the LTL and truckload worlds. Accessorials are the extra charges for services other then the actual transport. In some cases they are more like penalty fees for issues during transit. Generally speaking LTL accessorials are higher then truckload.
Transit times in LTL and Truckload are very different. In Truckload the carrier will pickup and drive straight to the destination. Other then stopping for driver breaks, fuel and equipment issues, the truck doesn’t stop. The result is a much faster transit.
LTL shipments on the other hand typically travel through the carriers hub and spoke network. This means that the freight will be transferred several times and wait for it departure at different terminals between the shipper and consignee. The result is a much slower transit.
When shipping LTL you are one of thousands of customers moving freight through the carriers system. In most cases you will speak with customer service representatives. You will likely never speak with the dispatcher unless there is a critical reason. You will almost never speak with the drivers unless you are physically present at the shipper or consignee. Even then, it is almost certain that this will not be the driver doing the line haul portion of the delivery or final delivery. The result is it takes longer to get updates with LTL shipping and updates are often less accurate. In LTL shipping you are very much at the mercy of the carrier customer service model, good or bad.
Truckload is much different. In many cases the person you book the load with will be your point of contact throughout the shipment. In truckload it is very common to have direct communication with the driver. All of this can result in a more positive communication experience.
Thanks for reading this article. We hope it was helpful for you as you navigate your transportation journey. Both LTL and Truckload freight shipping are valuable ways to move your product. They have some similarities and many differences. At BAM Freight we are experts in both. If you could use some help understanding your options, covering loads or getting better pricing we are happy to help!
Transportation Executive with experience in developing processes and controls for early stage start up companies. Specialties include: Sales, Marketing, Transportation, Trucking, Brokerage, Project Transport and Rail Operations.,Organizational Design, Process Development, Accounts Receivable Management, Leadership, and Business Start-ups.
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