Shipping makes the world go ’round. Online ordering continues to rise. There is heavy reliance on consumerism. The roads are always humming with freight trucks helping to make life happen across the country. In addition, there are LTL carriers ready to step in and ship out for smaller companies that don’t have a fleet.
What is an LTL Carrier?
An LTL carrier is a type of freight shipper that specializes in the transport of smaller cargo sizes. LTL freight provides an invaluable freight service for businesses, from corporations to small family-owned boutiques.
LTL stands for Less Than Truckload. It refers to orders that need less than a full truck’s space. This means you can save money by only paying for the space you need vs. an entire truck. An LTL carrier will pick up your shipment and consolidate it with other shipments. Then, orders are delivered on time and intact at their destination.
Your LTL carrier will transport your goods safely and securely, as you expect from professional LTL services.
Why Use an LTL Carrier?
LTL freight provides service for small orders (about ten pallets or fewer) when items are larger than standard parcels. Companies of all industries and sizes use LTL carriers for various reasons.
For starters, shipping via LTL freight is usually a cost-effective option. Shipping companies can serve multiple clients on the same trip while maximizing cargo space. It’s also more environmentally friendly. Think of it as carpooling for your goods — you’re sharing fuel, mileage, and maintenance with other companies while only making one trip. Moreover, smaller companies don’t have to take on the expense of having their fleet. They can book LTL freight on demand and avoid incurring all the ongoing fees of vehicle ownership.
That said, not all LTL carriers are created equal. Choosing an LTL carrier will impact your finances, not to mention your customer satisfaction. Let’s look at the types of LTL carriers in more detail.
Regional vs National LTL Carrier
Companies group LTL carriers into two buckets: regional and national. Regional LTL carriers serve a specific geographic region. This may be one or two or all of the states in the Northeast or Southwest. They don’t make cross-country trips. This helps to ensure a shorter delivery timeline and may also help to keep costs low.
National LTL carriers serve the entire country with freight services. In some cases, the areas covered may also extend to Hawaii, Alaska, Puerto Rico, and the US Virgin Islands.
There are also international LTL carriers that provide cross-border services. In addition, companies may also find micro-regional LTL carriers, which may serve routes between two specific states.
How to Choose an LTL Freight Provider
When managing your operations and performance, you must know which carriers you leverage for fulfillment. Take a look at the core strengths of their coverage. Most carriers do a great job of moving your freight. Often a single-threaded approach with one LTL carrier is not the best way to optimize.
There are several key factors to keep in mind when selecting carriers. Let’s review some of these points.
Coverage and Carrier Partnerships
Both national and regional carriers have an immediate service area or core focus market where they operate. Therefore, it’s ideal to leverage direct service points within your carrier mix for optimal shipping performance. It is similar to having a direct flight on an airplane to your destination. First, time is reduced in transit. There are fewer complexities involved during the trip. Finally, you are provided a better gauge and visibility into when you will arrive at the destination.
Typically, national carriers service most of the US with direct coverage. However, regional carriers only have a close range within their focus markets.
Extended Network Coverage and Interlined Freight
You can often leverage a carrier’s extended network to move your shipment outside their immediate service area. Shipments are not handled directly by the same carrier for the entire transit duration. Instead, the load is transferred to a partner carrier for delivery. This can bring additional challenges. First, it includes longer transit times. Complexities increased with the transfer (e.g., missed connections, lost/damaged items, etc.). Finally, you have reduced visibility in the tracking of progress to delivery.
Understanding the quality of carrier partners’ service and direct service areas is essential. It will ensure that this is a good option for supporting your operations.
Understand Capacity Requirements
Regional and national carriers have different guidelines regarding how much space you can leverage for one shipment on their truck before you are assessed with overcharges. These requirements pertain to linear feet and cargo weight. For example, a national LTL may require space capacity of 21 linear feet and 20,000 pounds, while a regional carrier might cap you at 12-15 linear feet of space.
Because of the variations in capacity, national LTLs may be better suited for larger shipments. It’s best to research the capacity requirements beforehand, as any overages may categorize you under volume capacity and result in additional charges.
Linear Foot Rules and Capacity for LTL
Here are standard ranges of linear foot rules for both carrier types:
When you exceed the allowed space on a truck per the Linear Foot Rules, an order goes from an LTL shipment to an LTL Volume or Cubic Capacity. If you attempt to send a standard LTL shipment out that exceeds these requirements, you will be hit with a significant overage charge. This could come in the form of an additional minimum charge, an extra charge based on the shipment’s density, or added cost per mile.
Therefore, you will need to be careful when shipping larger orders to help ensure you are within the guidelines for each carrier.
Pricing for LTL Carriers
Discounts and Minimums
LTL pricing has many variables to consider. Regional carriers have significantly lower minimum charges than national carriers for moving freight within a shorter distance (intrastate or into a nearby bordering state). For example, a regional carrier will often offer minimum charges between $60-80 a shipment for these shorter distance moves, while minimum charges for the same lanes from national carriers are typically between $100-$130. In our experience, discounted rates between regional and national carriers will follow similar structures.
Furthermore, national carriers typically have better discounts and minimums for long-haul shipments than the regional players. Since national carriers leverage their trucks to move the freight and don’t need to share profit with their cartage partners for interlining shipments, you will likely get the most competitive rate on a long-haul shipment working with a national carrier.
Think About Packaging & Pallets
Some LTL carriers are better suited to handle certain types of packaging. Most LTLs will be able to accommodate pallets and crates. Although carriers are slowly shifting away from pallet rates, regional carriers with more flexibility in their operations and corporate structure still have these services available.
For most national carriers, pallet rates aren’t available unless by special request. Rather than these shipments being calculated by NMFC class and weight, pallet rates are a flat fee for each pallet shipped, regardless of the commodity.
Pallet rates also have specific guidelines, including the weight and pallet size needing to be under a certain threshold (e.g., 2,500 lbs and 48” L x 48 W” x 72 H”). If your pallet exceeds these guidelines, it will be charged as two pallets. Therefore, pallet rates can be a cost-effective way to move freight depending on your product mix and weight.
Check with your LTL to learn more about their handling procedures for atypical or unique packaging that might require special attention.
Consider Special Requirements
Does your shipment have special handling instructions? Unfortunately, not all LTL carriers can accommodate special needs or requests. You’ll want to find out ahead of time how the carrier can manage the following types of items:
- Hazardous materials: Shipping chemicals, explosives, radioactive substances, waste products, lithium batteries, or dry ice needs to be handled with the utmost care. Even everyday items like cellular phones, electronic cigarettes, hair spray, or nail polish cases may be labeled as hazardous for transport.
- Perishable goods: Items that require storage at a specific temperature must have reliable storage solutions for the duration of the transport. Everyday perishable items include dairy products, live plants, vaccines, and medical products. Ensure your carrier has experience handling and transporting the things you’re shipping.
- Fragile items: Large art pieces, items that are light sensitive, fine china, and glass all need to be packed and handled with extreme care.
What’s more, you may be able to offer your customers additional services with the right LTL carrier, such as unboxing, setup, installation, or packaging takeaway.
LTL Customer Service
One additional area to be aware of is corporate structure differences between national and regional carriers. While national and regional carriers will do a good job communicating with you and supporting your business, regional carriers typically have increased flexibility within their corporate governance. As a result, they can resolve issues and requests more quickly. This can significantly impact your experience when requesting invoice corrections, claims, special requests, volume quotes, etc.
Next Steps: Get an LTL Freight Analysis
Overall, there is a variety of differentiating factors when deciding which type of carrier is best to service your operations. Coverage, pricing, specific carrier shipping rules (e.g., linear feet and capacity), and customer service are key areas to keep in mind. Leveraging the right mix of LTL carriers will help significantly reduce your shipping expenses and service failures, enabling you to provide the best customer experience. In addition, being more informed about the nuances can help you ask more shipping questions to choose the best fit provider.
Freightwise has been helping businesses get the right mix of carriers without sacrificing quality and service for years. Request an analysis of your shipping today and see how you can ship more intelligently.