Since the past decade, there has been a significant increase in consumer demand and there is also a rise in technological innovation in the logistics and transportation field.
Due to the increasing consumer demand, the shippers have also evolved their process, therefore the logistic industry has followed multiple ventures, developing technologies, techniques, and strategies for reliable and faster transportation of products and materials from point A to point B more efficiently.
The Full truckload (FTL) and Less Truckload (LTL) are shipping methods that most carrier companies use to provide a higher level of customized services to shippers.
What Is LTL Shipping?
The less-than-truckload shipping is the shipping/transportation of an amount or freight sized between individual parcels and full truckloads. The parcel carriers handle smaller packages and freight that can be broken down into units of less than approximately 150 pounds, therefore full truckload carriers move entire semi-trailers.
- LTL shipping involves shipping loads between 150 and 15,000 lbs.
- LTL shipping involves shipping up to 12 pallets.
- LTL shipping involves shipping up to 12 pallets.
- LTL shipping combines loads with shipments from other companies.
LTL shipping prevails in driving up the expertise and reduction in recurring transportation costs. Therefore, if LTL shipping does not exist most of the companies that ship products to consumers will not function reliably. For example, if there are few pallets or small shipments from lower-scale manufacturers, who want to ship their products across the United States, the manufacturers will adopt the process of LTL shipping.
The carriers also maximize their profits for given loads and decrease the average amount of unused space in their shipping containers by consolidating freight from multiple shippers. The strategy is also beneficial for shippers because the carriers often provide discounts to shippers who request a steady stream of LTL loads. LTL Shipping is very beneficial for small-scale manufacturers who want to ship smaller shipments nationally. LTL shipping is also beneficial for carriers because it reduces the strain of driver shortages experienced by transportation companies. The LTL carriers usually spend less time recruiting and onboarding drivers if the size of every truckload is optimized. LTL shipping often reduces the costs incurred in the operation of a larger number of commercial vehicles. Therefore, fewer trucks on the road mean lesser maintenance and decreased managerial costs.
The advantages of LTL shipping:
- Maximized profit by filling up unused spaces in trailers and shipping containers.
- Assesses the driver shortages through consolidation of load, so fewer drivers are on-board.
- Addresses the demands for an increased number of manufacturers.
- Saves maintenance and regulatory costs.
- Provides discounted pricing for companies with constant LTL shipments.
Downsides Of LTL Shipping:
- LTL freight takes a longer period because it experiences multiple stops as all cargo does not share the same destination.
- LTL freight follows a hub system, which means that shipments can be transferred several times before arriving at the destination.
- LTL shipping is more vulnerable to delays because it depends on more moving pieces.
- There is more possibility of damage to shipments because of the transfer and increased handling of freight.
- Therefore, due to frequent stops for the product to reach its destination, there are increased shipping times and excessive fuel surcharges.
What is FTL Shipping?
Truckload shipping is the transportation of large amounts of homogeneous cargo, which is generally the amount necessary to fill an entire semi-trailer or intermodal container. Therefore, a truckload carrier is a trucking company that generally contracts an entire trailer-load to one single customer.
FTL shipping differs from LTL shipping because it does not combine freight from several shippers, therefore the shipments do not make stops on the way to their destination. The FTL shipments are usually palletized and they weigh more than 10,000 lbs.
The FTL shipments are usually over 10,000 lbs. and there are 10 or more pallets. The load does not share a truck with products from other companies. Therefore, it is less cost-effective for small shipments and more cost-effective for full truckloads.
Benefits of FTL
FTL shipping comes up with many advantages. FTL shipping is an exceptional solution for larger companies that need to ship large quantities of palletized freight. The FTL is the best way to transport massive shipments. Therefore, if the company can fill one whole truck with freight, it becomes unnecessary to pay for multiple vehicles that make up several stops and consumes valuable time and fuel for doing so. It probably makes more sense to opt for a full truckload for streamlining the shipping process. The shippers can also avoid potential damage from handling and transferring goods by opting for FTL by avoiding all the stops of an LTL hub system.
- More effective for large shipments.
- Provides cost savings over multiple small shipments.
- Not subject to the needs of other shippers who are sharing the trucks.
- Shipments are always from the point of origin to the point of destination
- It is much faster than LTL.
Disadvantages of FTL
- The cost of FTL shipping is often exorbitant for shippers who tend to move smaller quantities of freight because it would not make any sense to employ a half-empty truck when a shipment could be combined with other shipments.
- The FTL also provides drivers with more leverage in setting up the prices by defining their availability and choosing their preferred destination.
Combination of FTL and LTL
The company's shipping strategy must reside fully on effective freight allocation. Therefore, smaller companies rely fully on LTL shipping and larger companies opt for a combination that best suits their business needs as it is based on a variety of factors. These large shippers must work with a carrier or a third-party logistics company that uses a Transportation Management System (TMS) which combines the best aspects of LTL and FTL freight scheduling through leveraging technology.
Through constant analysis and scrutiny of tracking several variables which include factors like origin, destination, driver availability, and the size and freight class of outgoing shipments, third-party logistics can consolidate freight in most efficient ways.