LTL or Truckload -- Which Mode to Use?
A lot of companies can lower their logistics costs by improving how they select a shipping mode. Often, shipments are easy to recognize as either Truckload (TL) or Less-Than-Truckload (LTL), so there is no real decision to be made. But that is not always the case. Sometimes just a few poor choices on shipments can have a significant negative impact on a company’s margins. The good news is there’s usually a “right” answer -- even if it takes some effort (and even a little help from technology or a trusted 3PL partner) to figure out. This makes understanding your shipping rates and the service requirements of each shipment important. So, how does a shipper ensure they are making the best decision for routing a shipment LTL or Truckload?
When to Choose Less-Than-Truckload (LTL)
LTL, as its name implies, is the shipping method best suited for orders that require less space than an entire truck. And, most LTL shipments will typically weigh between about 100 and 10,000 lbs. That’s a big range, but considering that a full-size trailer can accommodate around 45,000 pounds, LTL is economical for these types of shipments. The cost advantage comes from the shipper only paying for the weight and space used on the truck.
LTL carriers often provide higher-touch delivery services, so oversized or oddly shaped items, or shipments requiring extra handling at the destination are often best suited for LTL. Truckload carriers are not equipped for special delivery requirements like a lift-gate or limited access as well as LTL carriers can be.
At the same time, there are costs associated with LTL shipping that do not exist with truckload. Before sending any shipments with an LTL carrier, be sure to understand the accessorial fees that might be associated with your shipment (residential delivery or pick up, lift gate requirements, limited access, etc.). And, depending on the dimensional weight (DIM) of a shipment, there might be additional charges. Because LTL has multiple touch points and handling, there is more opportunity for service delays. This increases your chance for claims and you must ensure your packaging is accurate. Consider expedited or a dedicated truck if timing is urgent.
When Truckload (TL) is the Best Choice
Full truckload should be the choice for very large shipments that can take up most of a semi-trailer. A general rule for using Truckload is when a shipment consists of seven or more pallets as a full truckload is usually between 26-30 pallets. For more on shipping partial truckload or volume LTL which can range from 6-18 pallets, read our blog, “What Is Partial Truckload and Why Should You Be Shipping It?” But note, shipments around this size might be able to go either way.TL freight is typically moved via one carrier and does not make as many stops or ever get off-loaded from the trailer, as is the norm with LTL freight. Because TL is delivered more directly, service times are often faster for the same amount of freight. Also, less damage occurs since there is less movement of the pallets on or off the truck, or through cross-docks like for LTL.
Full TL offers a more predictable price (usually a fixed or per mile rate) compared to more complex LTL rates made up of a tariff and other harder to calculate factors. The service TL carriers provide is more rigid since, due to equipment size, there are constraints for where 48’ and 53’ trailers can unload.
Compared to LTL, Truckload’s one-pick up and one-drop off reduces the opportunity for damage due to no additional handling points. On-time service is typically higher than LTL as well, making predictability more accurate.
As you can see, LTL and Truckload both have benefits that are best suited for specific situations. The hard part for shippers is figuring out the cases in which cost and service need to be balanced. There is a point when the LTL cost of a shipment will be higher than the cost to pay for a whole truck. And, there is no standard rule or equation because every company’s rates, product mix (freight class), and service requirements are different.
It is important for companies to not make assumptions about which mode is best from a cost or service standpoint. This is where the value of transportation partners comes in. Using an online portal, like EchoShip, can provide visibility into precise rates and transit times and is the best approach for shippers to know the right mode is selected for every shipment and that costs are optimized.
As a leading 3PL, our team at Echo uses a unique combination of industry expertise, best-in-class technology, and award-winning customer service to simplify transportation management for our clients. Our logistics experts are here to help you select the best mode for your shipments. We evaluate your transportation needs, discover efficiencies, and deliver the transportation solutions that are best for your business.
Echo services all modes of transportation, including truckload, partial truckload, less than truckload (LTL), intermodal, and expedited.