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Less Than Truckload (LTL) Freight: What Is It & How Does It Work?

front 3/4 view of semi truck and trailer on road

Less-than-truckload (LTL) shipping allows you to combine smaller shipments with other businesses sending goods to the same area. By filling a truck together, companies pay only for the space they need.

Third-party logistics providers like Crown LSP Group can help you find a cost-effective solution ideal for small-load shippers.

How Does LTL Shipping Work?

Many businesses — especially small ones — need transportation for goods that don’t occupy an entire truckload. Ensuring on-time delivery often means paying for full loads while shipping products that only take up part of the truck’s available space. LTL shipping changes that by consolidating cargo from different companies for a full-capacity truck.

The concept is similar to a group discount, where you team up with other businesses sending goods to a common destination. You each pay for the portion of the truck you use while getting your product where it needs to go.

When you choose LTL cargo, the carrier must work to find compatible partners to share the load. This additional step reflects in their charges. That means you’ll generally pay a higher rate by volume for LTL shipping than if you were filling the entire truck. In other words, if each pallet costs a certain amount to ship in a full load, you’ll pay more per pallet to transport with LTL freight.

Benefits of LTL Shipping

LTL shipments offer numerous benefits for those transporting smaller loads.

Affordability

LTL shipping allows you to transport goods more affordably when you need only partial trailer capacity. Since you pay only for the space you use, you avoid excess costs associated with unused space. The result is shipping that costs a fraction of standard, full-load costs.

Protection

Most LTL cargo is securely palletized before loading. That process offers your products extra protection against potential damage, especially when compared to individual handling units.

Traceability

LTL shipping offers increased visibility into your shipments. You can track them in multiple ways, including:

  • By the purchase order number.
  • Through the bill of lading identification.
  • With the progressive (PRO) number.
  • By the pickup date.

This enhanced transparency allows for easy documentation of the chain of custody, so your audit trails maintain accuracy.

Efficiency

LTL freight is ideal for maximizing efficiency. You can transport goods to customers as soon as possible rather than waiting for area demand to increase to total truckload capacity. Plus, you access regional and national carrier systems. As a result, you make the most of your company’s time and resources.

Ecofriendliness

LTL shipping is the ideal solution for today’s emphasis on sustainability and greener business practices. Sending fewer trucks with complete loads translates to fewer separate shipments, lower emissions, and reduced carbon impact for your company.

Versatility

LTL shipments arose in response to the need for more flexible shipping options and helped support a shift to “just-in-time” inventory management for many companies. This transportation agility proves critical when supply chain challenges arise and consumer buying patterns change.

Plus, you can access other special handling options to meet your business’s needs when you ship LTL. Today’s choices include conveniences like:

  • Inside deliveries and pickups.
  • Refrigerated trailers.
  • Liftgates.
  • Required appointments.
  • Residential deliveries.

What Determines LTL Shipping Rates?

Many considerations affect the ultimate total of LTL freight.

National Motor Freight Classification (NMFC)

The NMFC is the industry’s framework for determining a product’s transportability. Under this system, your cargo receives a grade from 18 separate classes, from low-end class 50 to high-end class 500. The standards include categorization of properties like:

  • Dimensions — often referred to as cargo stowability
  • Freight density
  • Declared value
  • Liability

Generally, higher class numbers carry higher freight charges.

Origin and Destination Locations

Two primary factors influencing shipment costs are where your cargo comes from and where it’s going. The further your shipment must travel, the higher the price you’ll pay because the transport costs the carrier more in equipment use and driver labor.

Shipping lanes also impact the total fees. Typically, busy routes are more affordable than less-used ones. As a result, it’s often more cost-effective to transport goods to an active, urban area than to a remote, rural one.

Special Handling

Cargo that requires special handling is generally more costly to ship. Options that can contribute to your LTL freight costs include:

  • Expedited shipping or guaranteed delivery dates.
  • Refrigeration.
  • Hazardous materials.
  • Fragile products requiring extra protection.

Cargo Weight

LTL shipments often tip the scales between 150 pounds and 10,000 pounds, though some carriers accommodate greater weights. Heavier shipments can produce higher costs, but carriers commonly use a hundredweight or centum weight (CWT) pricing approach. This model means that the heavier your shipment is, the lower your rate per 100 pounds of freight.

Carrier-Negotiated Rates

LTL experts like Crown LSP Group offer freight brokerage services based on negotiated rates with a network of LTL carriers. This approach ensures you get the best possible LTL rates with the carrier most able to meet your unique business demands.

Fuel Surcharges

With a dynamic pricing market, many carriers pass on a fuel surcharge to their customers. Often, these fees appear as a percentage added to the negotiated or base rate. These charges change based on the travel distance and help offset fluctuating and variable fuel costs.

When to Opt for LTL Shipping

LTL shipping is ideal for many types of businesses, industries, and applications. These include:

  • Shipment weights under 10,000 pounds: When you exceed the size and weight limits for parcel carriers but tip the scales at 10,000 pounds or less, LTL shipping can provide an effective solution.
  • Budget-conscious transportation: Small businesses must maximize their resources to keep profitability levels high, and LTL freight helps you make the most of shipping spending.
  • E-commerce fulfillment: Online retail has been steadily on the rise over the past several years, and LTL helps e-tailers meet consumer expectations for shipping costs and expedient deliveries.
  • Shipments concentrated in certain areas: If you commonly ship goods to one area of the country or along well-traveled shipping lanes, LTL is efficient and affordable.
  • Less than 10 to 12 pallets of goods: LTL is a perfect choice for smaller businesses shipping up to 12 pallets of goods.
  • Non-time-sensitive deliveries: While expedited or guaranteed deliveries are possible, LTL cargo often makes more dock stops along the way and is best for flexible delivery windows.

Contact Crown LSP Group for LTL Shipping

Crown LSP Group is a complete distribution solutions company based in eastern North Carolina. Since 1987, we’ve been a trusted logistics and transportation excellence source. Our team will help you secure the best LTL rates and classify your products according to NMFC guidelines.

Contact us online to request a free LTL quote, or call an expert at 252-985-1070 for assistance.