What is Less Than Truckload (LTL)?

What is less than truckload (LTL)?

Less than truckload or less-than-loads (LTL) is a shipping service for transporting small quantities of freight by road. Unlike truckload (TL) shipping, LTL shipments don’t fill an entire trailer and are usually less than 10,000 pounds.

Many large, national parcel carriers and logistics providers offer LTL services. These services can move smaller batches of goods frequently while reducing shipping costs for smaller shippers. Instead of paying by the mile, shippers pay for the portion of the trailer their freight occupies, while other shippers fill the rest of the trailer space.

LTL freight shipping is great for small businesses as they can share the space and cost with similar shippers. It’s also a cost-effective way for ecommerce merchants to replenish inventory and get goods to customers.

How are LTL freight costs determined?

Many factors determine LTL shipping rates and freight quotes. They include:

• Freight class and weight: Because multiple shipping companies use the same trailer, freight class is important to help standardize commodities.

• Fuel price: Fuel surcharges are very common in truckload freight. Costs are often tied to the current price of fuel.

• Distance: The further an LTL load travels, the more it costs.

• Speed: Shipping services have different service levels. If freight is guaranteed at a certain time, it will cost more. The faster the service, the more it will cost.

• Accessorial fees: LTL carriers sometimes charge additional fees such as using a lift gate, limited access, special handling, inside pickups and deliveries and reclassifying or re-weighing orders.

What’s the difference between FTL and LTL shipping?

Large volumes of freight are transported through two kinds of trucking operations: full truckload (FTL) carriers and less than truckload (LTL) carriers. 

Full truckloads are a shipping method of transporting large volumes of freight—typically an entire truck. Full truckload shipments are usually from a single supplier and move directly from a shipper to a consignee. Pricing works on a cost-per-mile basis and will change frequently, making it pricier than LTL. Also, unlike LTL, freight classification is not important in truckload. 

Conversely, less than truckload shipping requires less space. These shipments cannot fill an entire trailer, so LTL freight involves trucks carrying goods from different businesses—they share the space. Shipping with LTL carriers is cheaper because shippers only pay for the space they use. However, LTL shipping is slower than FTL because of multiple stops and transfers before the freight reaches its final destination. Transit times are a little longer than TL shipping options.

How does LTL work?

LTL carriers typically move pallets of products. Carriers commonly use a “hub and spoke” distribution model. Local terminals like warehouses are the spokes, and larger centralized distribution centers are the hubs. 

When a shipment is picked up for delivery, it’s taken to a local terminal for sorting and consolidation onto an LTL truck. Then, the shipment gets taken to the central hub, where the carrier will transfer it to a different truck for last mile delivery, or consolidated again to move to other terminals until it reaches its final destination. 

Over a single delivery, cargo may get transported on several trucks depending on where a driver is headed and the most efficient routing available.