Sellers spend an average of 70-75% of their fulfillment costs on shipping. But it’s not that easy to know if you’re spending in the right places. There are a lot of variables to take into account. When it comes to freight (goods transported in bulk) you have two main choices, LTL (less-than-truckload) and FTL (full-truckload). Choosing between these two methods depends on several things: the size and weight of your shipment, freight classification, and delivery timelines. If you want help from an expert, it’s often best to outsource your freight to a third-party logistics provider (3PL) to help optimize your freight strategy.
LTL and FTL Explained
LTL refers to less-than-truckload. LTL is when multiple shippers’ freight is on the same trailer rather than having a single company’s freight exclusively on an individual trailer. Several LTL shipments are combined one a truckload to maximize space and fill it to capacity. This is a great option for shipments that are between two and eight pallets or any shipment that is less than 14 linear feet because it makes the most out of the available shipping space on a given truck. LTL is a great option for small businesses.
FTL refers to full truckload freight. FTL shipping is commonly used for large shipments that take up the entire truck, or most of it. With FTL, your freight is the only freight moving on an individual truck so you have exclusivity to the entire truck and theoretically are filling the truckload. You can reserve the truck with its full capacity even if you don’t require filling up the entire available space. Doing so would ensure that you won’t have to worry about your goods changing hands at any time or your goods being misplaced with other products.
Differences Between LTL and FTL
The biggest difference between LTL and FTL is that LTL gives you higher cost savings when you ship only a few pallets at a time. This is cheaper because you are only paying for the space you are using, rather than paying for a full truck that isn’t filled to capacity.
LTL and FTL also have a key difference in transit times. If you have a full truckload your carrier will pick up whatever you are shipping and drive it straight to the receiver—this makes transit very predictable. FTL carriers will arrange a firm delivery time since they are only picking up one shipment. However, the transit for LTL does not go directly to the end destination because of the different stops they have to make. With LTL the actual delivery date may be very different from the estimated delivery date, requiring more flexibility on your end.
There is also a greater chance of damage or missing items with LTL. Because your product will be alongside other products that need to be dropped off at different locations, your items will be loaded and unloaded in and out of trailers and warehouses several times before reaching the final destination. This increased amount of handling and exposure means a greater chance that your products could incur damages, especially if they are sensitive or fragile. On the other hand, a full truckload will load your products at the point of origin, seal the trailer, and take it straight to its delivery destination.
How to Optimize Your Options: FTL vs. LTL
There are no hard and fast rules by which you must abide by, however, there are certain situations where FTL might be more appropriate than LTL.
- If you are shipping more than 12 pallets at a time, then the full truckload option is going to be best for you.
- If your product is fragile and you need to avoid excessive loading and unloading by multiple carriers, the full truckload option is going to be best for you because you know that your fragile products are the only items within that truck.
- If you need firm delivery and pick-up dates the full truckload option is going to be better because you can reserve a single carrier to transport your items. For time-sensitive delivery dates, you absolutely want the full truckload option.
- If you have a smaller shipment that is anything less than 12 pallets you will experience higher cost savings using the LTL method.
- If you have some flexibility on the delivery or shipping date the LTL option is going to be much better suited for you as well. By giving you a pickup and delivery range at either end, as opposed to requiring a more specific time schedule, you can benefit from the savings of combining your shipment with another shipment.
Pro tip: It is important to be aware of how likely your products could incur damage during shipment. You want to make sure that they are sturdy enough for regular handling at various points throughout the shipping process or that they’ve been properly packaged so that being handled regularly is unlikely to cause any damage.
How to Work with a 3PL for LTL and FTL Shipments
As you have read, understanding and deciding which of these two freight options is best for your business can be a very complicated undertaking. Because of that, partnering with a third-party logistics provider (3PL) can often be the best option when it comes to shipping LTL or FTL freight, especially when shipments have special requirements or time sensitive deadlines. 3PL companies provide an advantage for businesses looking to find the most competitive rates in the market, along with service that they can count on. Here are a few benefits of outsourcing freight support to a 3PL.
Freight shipping is often a core competency of many 3PL providers, both LTL and FTL included. They have the experience to be able to determine the best way to handle your freight since they provide that service every day for multiple companies. A competent 3PL will help you evaluate your shipping and choose the most efficient option. They will also be able to anticipate potential risks or higher costs, and continue to analyze your freight optimization for the best results to grow.
Your company might only ship a few pallets each month to a small area, while a 3PL is shipping a significantly higher volume across the whole country or internationally on a daily basis. Their volume and buying power gives a 3PL leverage when negotiating rates with freight carriers. By partnering up with a 3PL, you get access to these cost-effective rates.
It’s crucial for any business to know what is happening with their freight at any point in time. Many companies are afraid of the loss of control when using a 3PL for LTL or FTL. The reality is you gain more visibility and tracking capabilities than you might have had trying to manage the process yourself. A team of professionals will focus on providing the highest level of service to your company, including detailed updates from your shipment’s inception to when it reaches its endpoint.
The final decision between FTL and LTL shipping will depend on costs, timing and handling requirements for your freight shipment. In many cases, LTL will provide a cheaper option for smaller loads, but if your load is heavy for its size, irregular in shape or takes up more than half of a truckload, it makes sense to get pricing for both options. Sometimes, full truckload is the way to go even if your load leaves empty space on the truck.
Article written by Brian Tu, Chief Revenue Officer, DCL Logistics