Less Than Truckload (LTL) - Explained
What is LTL shipping?
Written by J. Mance Gordon
Updated at April 21st, 2024
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What is LTL or Less-Than-Truckload?
Less-Than-Truckload is a term that refers to transportation of freight that is less than the capacity of the trailer and only occupies a percentage of the trailer. In such a case, different shippers will transport goods in the same trailer and only pay for the portion of their goods. This makes the system cost-effective.
When is Less than Truckload Shipping Used?
There are different benefits that come with LTL including:
- Eco-friendliness Instead of shipping goods separately, shippers share transport and this reduces the carbon footprint.
- Bonus Services Those who use LTL services have access to extended services such as lift gates, notification options, inside deliveries and pickups and non-commercial delivery.
- Trackability Freight services show the number of days that a shipment will take and shippers can track the transportation by checking PRO number, bill of lading number and PO number.
In instances where does not have enough goods to fill a trailer, they choose LTL. LTL operates in hubs and spokes where local collection terminals are the spokes and the central terminal acts as the hub. Goods are collected from the spoke terminals and are moved to the hub terminal where they are sorted and transported. When calculating transport rates, shippers consider a number of factors including:
Pickup and Delivery Distance: The further the pickup and delivery distance, the more the fuel the trailer will consume and the higher the charges. Shippers need to consider the area of operation of the freight company as delivering outside their area will cost more and take a longer time.
Specifications of shipment: The size and weight of the load will determine how much space the load occupies and how heavy it is. Size and weight influence freight class calculation. In these calculations, lower classes are said to have high density but they have low carrier liability and hence lower rates. Higher classes are for goods that require special handling such as hazardous material and for these, there are extra costs incurred.