What is LTL Shipping and What Are Its Advantages?
Less than truckload (LTL) shipping refers to the transportation of freight that amounts to less than a full delivery load for a semi trailer. The partial shipments can weigh anywhere between 151 and 20,000 pounds and are combined with other partial shipments to form a full load. Once on the truck, the shipments are transported to terminals where they’re sorted and then reloaded for further shipment to their destination. The number of times that a partial shipment changes hands is determined mainly by the distance that it’s traveling. For small companies, LTL arrangements are often the result of shipping options that have been refined by the use freight transportation software (logistics software), which focuses on integrating a company’s shipping procedures, reducing delivery time and cutting delivery costs. Most LTL trucking companies make deliveries in the morning and make pickups in the afternoon.
The primary advantage of less than truckload shipping is that it reduces shipping costs. Instead of paying higher rates to deliver shipments by parcel carrier, companies can take advantage of lower trucking rates. LTL is advantageous for trucking companies because it allows them to extend their business to smaller companies, which, prior to the deregulation of the trucking industry in the 1980’s, were bound to shipping products by parcel carrier or private trucking company. The primary disadvantage of LTL shipping is that delivery time is considerably longer than in full truck load shipping (FTL). However, when a company’s small shipments are a reflection of customer demand, the timeliness of LTL is usually a non-factor.
Companies who consider the efficacy of less than truckload shipping usually compare it against the value of parcel shipping. Typically, parcel carriers only ship pieces that weigh 150 pounds or less. But they try to convince companies to divide their shipments into smaller packages that will be awarded with algorithm based pricing. LTL shippers, on the other hand, prefer to ship as few units as possible to cut down on loading and unloading time, damage during transit and to simplify inventory requirements. The primary similarity between LTL carriers and parcel carriers is that they both use a system of terminals to deliver goods, while their primary difference is that price per pound rates are typically lower with LTL carriers.
Despite the fact that less than truckload carriers and parcel carriers compete for business, many companies use them in tandem. For example, a company might use LTL shipping to deliver its products to the right state and then use a parcel carrier to deliver it to the right locale. Known as “zone skipping” because the company uses LTL to “skip” parcel zones, many trucking companies refuse to participate in zone skipping because it represents a conflict in business interest. For new companies that are weighing the options of LTL shipping, parcel carriers and zone skipping, implementing logistics software is an economical way to arrive the best result for a company’s particular shipping needs. In addition to the judging the cost effectiveness of carriers, the software can also reduce delivery time by analyzing traffic patterns, road construction patterns, speed limit and route length.
Source by Ruby Stein