Transportation costs can be very expensive, and carriers do not like operating their rigs with empty trailers. If circumstances were ideal, every shipment would cover a full truckload, however, this isn’t always the case. The space that is utilized on a trailer can dictate the equipment needed and even the price of a shipment. Each method of moving freight over the road has its benefits, whether it be a less expensive or a potentially faster option. Perhaps you’ve seen terms like full-truckload or less-than-truckload, but let’s explore some details of the various transportation services that carriers may offer to shippers to move their freight.
Full Truckload (FTL or TL) Shipping
Full truckload shipping is a method used by businesses with enough products to fill an entire trailer or has a high priority on when the order is delivered. Full truckload is generally subjected to 2 major limits (assuming a 53’ Dry Van trailer): shipping 42,000-45,000 pounds of product and accommodating 26 nonstackable or 52 stackable pallets.
FTL shipping provides many advantages to businesses. One benefit of FTL shipping is cost savings. With full truckload shipments, shippers are not subjected to certain accessorial fees like redelivery and reweigh. On top of that, shippers do not need to worry about the reclassification of their shipment and the cost associated with it. Another benefit is damage prevention. Using FTL shipping guarantees that no other products will be in the truck and no other stops will be made except your own. Overall, freight is handled less and receives door-to-door delivery, minimizing the possibility of damage.
Despite many possible looming areas of problems, shippers can mitigate them by keeping in mind a few different things when deciding on a mode of transportation.
Do you have enough items to fill an entire truck?
Would you prefer to have an entire trailer dedicated to just your own goods?
Is the freight time sensitive?
Does the weight of your freight make FTL more cost-effective than other options such as LTL?
Answering these questions when deciding on whether FTL shipping is the right option can help eliminate confusion and highlight the right path forward.
Partial shipping is another popular shipping method for the cost-conscious customer/shipper. A partial shipment is in between the standard size of an LTL and an FTL shipment. For example, it is common for a partial shipment to take up about 1/4-1/3 of the trailer or sometimes even 1/2 of the trailer. The other available space on the trailer will likely be used for other shippers’/customers’ freight. Because several customers are sharing the space and the cost for the trailer, the cost to ship their individual freight is typically cheaper. Partial truckload rates are market-driven rates. A good rule of thumb for partial rates is to assume that a partial shipment will typically cost 50-80% of an FTL rate. The rate will depend on the size of the shipment, the pickup and delivery locations, pickup and delivery times, total mileage, and any accessorials required.
Partial shipments are typically not able to be expedited. Considering that the truck will have multiple pick-ups and deliveries, the shipper/receiver must have patience with partial delivery services.
It should be noted that not all carriers are interested in hauling partial freight. Finding partial carriers can be a bit challenging in addition to the partial shipment aligning with the truck’s planned route and their other pickups and deliveries.
Less-Than-Truckload shipping is another common method used by shippers. LTL shipping refers to the transportation of products or goods that do not need an entire truckload of space to transport. These shipments are usually sent out on pallets and range in weight from 150 lbs to 10,000 lbs. The high volume of smaller freight typically results in many different shipments being transported by one truck.
LTL carriers have perfected the skill of optimizing loads to serve more shippers and move more products in an efficient manner. Shippers enjoy using LTL because of the advantages it brings. Shipping Less-Than-Truckload affords greater flexibility to shippers who aren’t tied down by rigid pickup and delivery schedules. LTL shipping also provides an environmental benefit to its users who are essentially just car-pooling their products. Small businesses also greatly benefit from LTL shipping. Most small businesses don’t send out full truckloads worth of products on the regular, if at all, and by utilizing LTL shipping, these businesses can still reap the benefits of the advantages that professional shipping provides while remaining cost-effective.
Although LTL shipping provides a bevy of benefits to customers, it has some pitfalls to be wary of. A tradeoff with LTL shipping is the time guarantee that comes with FTL shipping. Because each truck contains shipments from multiple different shippers with multiple delivery points, it can be tricky to directly pinpoint when your product will be delivered with this method. Another issue can be carrier capacity. Since not all carriers offer LTL shipping it can be difficult sometimes to find a carrier who will ship LTL for a reasonable price. And lastly, LTL shipping is very detail-oriented and requires precise attention. Errors in weight, freight class, pick and drop locations, etc. can cause issues with your shipments and will ultimately affect the cost.
Parcel shipping refers to when a shipper sends out a shipment that is a lighter and smaller boxed item. These packages usually weigh 100 lbs or less and can be moved without assistance. These shipments are great for shippers who only have a few loose packages to send.
Unlike LTL, partial, and FTL shipping, parcel shipping is done without the use of pallets. Small boxes are either picked up from the origin point upon request or consolidated from multiple shippers at a single drop-off point. Once all are on the truck, they are shipped to another location where they are either sent out for delivery or transferred around a few more times until the point of delivery.
Shipping parcel provides a lot of unique benefits to shippers, especially small businesses. The biggest advantage is the ability to ship small individual packages, giving shippers a lot of flexibility in how they send their products. Parcel shipping also allows for speedy overnight deliveries for extremely time-sensitive shipments. This method of shipping also allows for shipping from drop locations as well as delivery to residential addresses. One last benefit of parcel shipping is increased visibility along its transportation path. Parcel shipments go through many more checkpoints and recording areas than LTL and can lead to more clarity on your freight’s trip.
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Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC - Copyright 2023 - does not assume responsibility for any omissions, errors, or ambiguity contained herein. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.