The Hub-and-Spoke Route System for LTL Freight

LTL Shippers often ask how does their cargo move and what is the transit time. LTL shipping usually takes longer then truckload freight shipping because it utilizes the hub-and-spoke system. This way to move cargo takes more time but results in a greater service area and better pricing.

There are two primary ways to route cargo when moving over long distances. The first and more simple is the point to point system. The second and more complicated is the hub-and-spoke system which is more complicated.

Back in the 70’s and 80’s transportation companies started to change the way they built their routes. Originally they had used the point to point system. Freight would move on a linear rout plan kind of like a milk run with stops.

A major goal of carriers is to get the most money on each route. Ideally they want every mile to be loaded with freight. The reason being, only loaded miles make money. The point to point system makes this hard to do.

One problem with a point to point system is far off places wouldn’t get serviced, resulting in lost business. Another problem would be more empty or non-revenue miles, which decreased revenue per load. Neither good for transportation companies.

So, what they started to do was create hub-and-spoke routing systems. In these systems different trucks from surrounding areas would pickup freight in their designated areas. Then everyone would bring the freight to a central location or “hub.” At the hub the freight would be mixed up and organized based on the final destination. Then the trucks going home to that destination would take the freight. This way, they are loaded coming in and loaded going out.

This type of network is most common in LTL Freight Shipping. This explains why LTL generally takes longer to move cargo from point A to point B that using a full truckload. Hubs usually service a specific area. Long distance moves will be transferred between Hubs. This transfer is sometimes referred to as the line haul portion of the move. This is because it is moving as a single truckload moving in a straight line like in the point to point routing system. Truckload carriers for the most part still use the point to point system.

In the hub-and-spoke system your cargo will be transferred or handled more often so it is important to make sure that it is packaged properly and clearly marked so it doesn’t get mixed up.

Thank you for reading our article on the Hub and Spoke Routing System. Learn more about our LTL freight service here.

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Dave Stevens

Dave Stevens

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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