LTL shipping in California can be a bit confusing. And since we do this all day, every day, we consider ourselves experts in LTL shipping. We took all the questions we’ve gotten from all our clients over the years and put together this helpful guide.
Table of Contents
- What is LTL Shipping?
- FTL vs. LTL vs. Parcel Shipping
- Advantages of LTL Shipping
- What to Look for When Comparing LTL Shippers
- LTL Customer Priorities
- Base Rates by Weight:
- Classification of Freight:
- Freight All Kinds:
- Common Accessorial Charges: Fuel Costs and Timing
- Common Accessorial Charges: Freight Specific Fees
- Common Accessorial Charges: Pickup and Delivery
- Avoiding Problems
- White Glove Delivery Services
- How ExpressIt Works
What is LTL Shipping?
Less-Than-Truckload (LTL) shipping is a mode of transportation for freight that would not fill a full truckload trailer (FTL) but is too large for regular parcel service. LTL freight carriers either move freight in box trucks or combine loads from multiple shippers which would otherwise be less than what would fill a 53-foot semi-trailer or both.
Shippers that need to transport their products safely to customers, distributors, or retailers secure their goods in boxes, crates, or pallets.
Durable items like bricks are stacked on a pallet, while more fragile items, such as furniture, would be fully crated. For the most efficient use of space, as well as security against damage, individual packages in an LTL load are often shrink-wrapped together to create one big box before being stacked into pallets, crates, or large boxes. They are then combined with shipments from other businesses into a single trailer.
This makes LTL freight, or less-than-truckload freight, a reliable, flexible, and cost-efficient solution for businesses that have small amounts of goods. It can save manufacturers from having to wait until large inventories accumulate in order to ship, evening out fluctuations in income, and lessening the risk of lost sales due to a lack of inventory at a brick-and-mortar point of sale.
LTL has also become a vital part of the supply chain for e-commerce applications that require connecting distant production and end consumers without a physical intermediary.
In the past, large retailers received products at regional distribution centers and then shipped them to brick and mortar stores. Currently, freight is transported to regional distribution centers, then moved the last mile to their end-users, often in residential areas.
This means that their products must be inventoried in warehouses or distribution centers close to customers at all times, but also that they can be delivered quickly.
The double-digit annual growth of e-commerce is the single largest factor reshaping LTL shipping, with many online retailers putting pressure on LTL carriers to not only offer home delivery but expedited home delivery and White Glove services with the hope that a high quality “last mile” delivery experience will attract new customers and keep them coming back.
White Glove services ensure that the carrier will provide flexible and secure pickup or delivery on-site as well as packing or unpacking and removing debris as needed.
Less than Truckload shipments can be handled multiple times while in transit. LTL carriers use a hub and spoke network of terminals and trucks to move freight while combining and recombining consolidated loads. Small local terminals are the spokes of the system, while larger regional terminals are the hubs.
Spoke terminals take in freight from various shippers in the surrounding area and bundle that freight onto trailers for transit to the regional hub. There the freight is unloaded and the separate shipments are inspected and weighed to ensure that the accompanying paperwork is correct. The freight is then recombined for further transit.
At the last terminal in its journey, a shipment will be picked up by an LTL carrier who employs local drivers. Typically, these drivers begin the day by loading their trucks and spending the morning making deliveries.
In the afternoon, when the trailer is empty they make pickups on a return route to the terminal, where sorting and delivery for the next day is done. Pickup and delivery (P&D) drivers often have regular routes which they travel so that the drivers develop a rapport with the customers.
This guide was written to help shippers understand key concepts and terms of LTL, and important considerations in choosing an LTL carrier. It covers:
- What is LTL shipping
- LTL versus FLT versus Parcel shipping
- Factors in LTL shipping
- Cost Components
- Comparing LTL Carriers
- How to Avoid Problems
- LTL Customer Experience
- White Glove Service
FTL vs. LTL vs. Parcel Shipping
Full Truck Load, Less than Truckload, and Parcel Shipping are all methods of moving goods, and the differences between them are dictated by the most efficient way to move different size loads.
Full truckload carriers, which utilize 53-foot semi-trailers, need to fill a substantial percentage of the space in order to make their operation profitable.
While an LTL shipment may be between one to ten pallets, and a full truckload represents a maximum of 26 pallets.
An LTL shipment could stop at several terminals on the way to its final destination, combining cargo from multiple shippers and being handled multiple times as it is transferred to a number of different trucks before it reaches its delivery point.
Or, depending on the shipping company, they may use smaller trucks that will go directly from the pick-up to the delivery point.
An FTL shipment is the only shipment loaded onto the truck, and after pickup, it proceeds directly to the destination, with no transfers. The freight never leaves the trailer until it reaches its destination, this makes transit relatively quick and predictable.
FTL carriers will arrange a specific pick-up or delivery time since they are only picking up one shipment. But their times will be limited to certain windows that fit their schedules.
Since trucking carriers handling LTL shipments have to pick up and deliver at multiple locations, their pick-up times will occur in a broader window and will require more flexibility on the timing of delivery because of all the different stops they have to make.
LTL works best for shipments in the range between parcel services and full truckload shipping. It’s the most cost-effective way for companies who don’t ship full truckloads of product at a time to transport their freight.
Rather than paying for space on a whole truck, the cost of the truck is shared among many shippers. LTL carriers create a collaboration between smaller loads that combines to an economy of scale, lowering costs.
Parcel shipping is similar to LTL shipping in that freight from many carriers are combined and recombined between pickup and delivery – but the size of the freight is much smaller, usually consisting of boxes weighing less than 100 pounds.
Advantages of LTL Shipping
LTL providers are able to deliver on cost and focus on optimizing their loads to move more goods for more clients, more efficiently.
One of the principal advantages of using an LTL carrier is that a shipment may be transported for a fraction of the cost of hiring an entire truck and trailer for an exclusive shipment.
In the United States, LTL trucks can also offer more flexibility and transport large items faster than rail because they’re not dependent on the railroads’ timetable.
Traditionally parcel shipping operates using a similar hub and spoke model, but does not place anywhere near as much emphasis on the security of what they ship due to the nature of its freight.
LTL carriers have more resources and incentives for neatly and securely packing freight. Securely packaged pallets and crates hold boxes of goods together and maximize shipping space.
The packing and palletizing of the LTL freight is focused on preventing damage at multiple points of loading and unloading, which means the risk of damage is significantly reduced.
For shipments with special handling requirements, it can be a major advantage that LTL shipping requires packing that keeps cargo safe when it arrives at the destination.
Ease of Tracking:
LTL shipments are easily traceable because at each point of loading and unloading they are handled and documented.
An array of accessorial services are offered by LTL carriers, which are not offered by FTL operations. For example, liftgate service at pickup or delivery, ensuring that cargo can be securely loaded and unloaded without damage where a forklift or loading dock is not available.
Other services include residential service at pickup or delivery, inside delivery, notification prior to delivery, temperature, limited access deliveries, and the handling of special needs for sensitive items.
While generally, the disadvantage of LTL shipping is that freight arrives more slowly and within a larger delivery window, some LTL carriers specialize in deliveries in as little as two hours, which is perfect for companies with limited warehouse space who need to get a finished product out the door as soon as possible, medical devices shipped alone and product components shipped at the last minute.
White Glove LTL providers focus on quality customer experience for the first and last mile of service and may offer a different array of options optimized for convenience.
What to Look for When Comparing LTL Shippers
Firms providing less-than-truckload services can range from specialized services that target a particular audience to national truck transportation companies that carry a client company’s goods across the country.
Regardless of the variety of LTL carriers, shippers should understand that carriers making deliveries are an extension of their company to their consumers, and should convey respect for their consumers. Transparency around costs, clear communication, and ease of tracking should also be expected from all carriers.
When shipping LTL freight, there are three main varieties separated by scale, each with its own set of advantages and disadvantages.
Local Carriers operate within a defined local zone, usually a greater metropolitan area. With a small fleet of trucks, these types of carriers are best for last-mile delivery, easy communication and customer service, limited access delivery, and customizable options. Disadvantages can include more limited technology and capabilities for long-distance transport.
Larger geographic sections of the country are served by regional carriers They have larger fleets, and as a result, regional carriers are able to offer some specialized services and faster transit times, with less customization.
National LTL Carriers operate countrywide. They work through a complex system of national terminals and are able to pick up and deliver freight anywhere in the United States. Benefits include better technology and coverage, but their systems may be less flexible and the customer communication service less easy and personalized.
LTL Customer Priorities
Most customers who use LTL shipping value cost, punctuality, accurate billing, security that results in undamaged delivery, and assorted options for customization. It may be useful to not only think about LTL carriers in terms of scope but in terms of focus, with different firms matching different customer priorities.
Some shippers focus on basic performance considerations: delivering when promised, transit time, competitive rates, pickups, and service availability.
These shippers place the most emphasis on the availability of service, ability to adjust to customer’s needs, invoice accuracy, and overall carrier reputation.
Some shippers optimize for information sharing during the carrier’s transit of the freight. Personal communication, relationships, and website usefulness are a high priority.
These shippers focus more on image-related attributes such as overall reputation, financial stability, and track record of damages.
These shippers focus on delivering a specific array of services at competitive prices in order to attract customers with specific needs – be it delivery to difficult to access locations, or dedicated shipping and high-quality customer service pickup and delivery experience.
Whatever the needs of the customer or the scale and focus of the LTL carrier, a point should always be made to insist on clear, transparent communication and agreements which are sustainable for most parties.
Many LTL companies negotiate year-long contracts with stable rates rather than expending time negotiating every shipment. Initial offers which are not sustainable in the long term for either party may not be worth the headaches over time, particularly if the headaches come in the form of surprising fees or service needs.
Likewise, establishing functional working relationships to handle negotiations and customer service needs may be difficult if calling the LTL carrier results in a labyrinth of automated menus rather than a knowledgeable and helpful employee picking up the phone.
From the carrier’s perspective, transparency and good communication are needed about relevant details of the freight and the details of its pick up or delivery.
Understanding the basic factors relevant to these conversations is therefore important.
The pricing within LTL rates below which a carrier is not willing to go is the absolute minimum charge (AMC). Carriers establish these charges because they have certain fixed costs that must be met regardless of the characteristics of the freight they transport.
Base Rates by Weight:
All LTL carriers establish their own base rates according to their capacity for extra volume or the availability of trucks in certain shipping lanes.
These base rates are categorized based on weight and are quoted per 100 pounds, termed hundredweight and abbreviated as CWT (centum weight). The more a shipment weighs in general, the less is owed per hundred pounds.
As the weight of the freight goes up and nears the next higher weight bracket it can potentially be rated at the lowest weight category in that higher bracket. This is known as deficit-weight rating.
The base rate is calculated by comparing the actual and next higher weight bracket. The accurate weight bracket is determined for the freight and this is compared against the next higher weight bracket.
The minimum cost of the higher weight bracket is then compared with the accurate weight bracket. The lower cost is then applied to the shipment.
A shipment’s dimensions are another factor that determines LTL rates. Shippers need to accurately calculate dimensions so they can properly describe their goods on the bill of lading (BOL).
A Bill of Lading functions as a receipt, a contract, and a document of title, and provides the details necessary for the proper processing and invoicing of a shipment.
Dimensions are calculated in total cubic feet, measuring the longest sides, including overhangs, packaging, and any irregular
Density is calculated by dividing the shipment’s weight by the cubic feet of its dimensions. When determining the dimensions of a shipment, the longest sides are measured, including any packaging, juts, bulges, and overhangs.
Keeping palletized shipments as compact and neat as possible is, therefore, a priority.
Classification of Freight:
The National Motor Freight Traffic Association (NMFTA) is a non-profit trade group that sets industry standards in pricing and trafficking.
LTL freight is categorized into 18 separate freight classes in the National Motor Freight Classification (NMFC) code published by the NMFTA.
Freight classes vary from a low of 50 to a high of 500 and are determined by density, handling requirements, insured value, and ease of stowing for transport.
Lower classifications are for freight which is very dense, resistant to damage, and easy to handle, stack, and stow.
High classifications are categories of freight that are lighter, less dense, more difficult to handle, and more space-consuming.
The final two digits of the freight class are known as the sub-number and define in greater detail the characteristics of the freight according to the NMFC codes.
For most contracts, the further the distance the carrier transports the freight, the higher the cost per hundredweight will be.
Interlining is a practice that comes into play if the LTL carrier only works within a certain area directly and transfers shipments outside that area to a separate carrier for final delivery. Interlining can result in higher costs due to the second carrier’s differing rate structure.
Freight All Kinds:
Freight All Kinds (FAK) is a term for a single negotiated rate for freight with different classes which is being shipped and billed for together at an agreed-upon combined freight class.
Understanding why accessorial fees are charged is linked to understanding how LTL shipping works.
An LTL shipment is handled more frequently than an FTL shipment. Rather than being picked up and delivered by the same trailer and driver in facilities fitted for handling large loads, an LTL cargo makes its way from initial pickup through a hub and spoke system of warehouses and trucks on its way to final delivery, being loaded and unloaded multiple times.
Accessorial charges are fees due to additional services the freight carrier may need to provide in order to fulfill their contract.
LTL shipping often also involves a number of optional services to provide more security and convenience, but which contribute to the final cost.
It is important to understand that different carriers may charge for accessorial services differently. What is covered automatically by one carrier as a matter of course, may with another, mean an expensive extra charge.
This is one reason why the lowest rate initially quoted without detailed discussion is often not the lowest bottom line cost when comparing between two or more LTL carriers.
It is important to understand the most common accessorial charges that cover these services, communicate with your shipping provider in detail about which may be needed, and choose an LTL carrier that clearly and transparently communicates with you about them in advance.
The alternative can be an unpleasant shock as you receive an invoice with charges not only for the desired customizable options offered by the shipper but for services you weren’t aware were necessary.
Common accessorial services can be divided into fuel costs and timing, freight-specific fees, and pickup and delivery. Discuss which services may be needed and if a separate charge will be required.
Common Accessorial Charges: Fuel Costs and Timing
The Fuel Surcharge is calculated as a percentage of the base rate and fluctuates based on the Department of Energy diesel fuel index in order to cover the cost of fuel.
When comparing LTL providers if some companies are charging much higher fuel surcharges it may be a sign that other operational expenses are being built in.
Compared to FTL shipping, LTL shipping can take more time due to the handling and recombining of shipments through the hub and spoke system. If you need to get inventory to certain locations as soon as possible look for an LTL carrier with an expedited shipping option.
Expedited Shipping Services are offered commonly for 3-day, 2-day, overnight, and next-day services.
After Hours Delivery / Pickup:
An additional charge is very often imposed on any shipment that is outside of the general pickup/delivery window of 8 a.m. to 4 p.m.
Many LTL shippers are optimized to efficiently fill their trucks at a central location early in the morning, make deliveries before noon, and then make pickups on their return journey, meaning that they will only deliver in the morning, and only pick up in the afternoon.
The hours of drivers are strictly regulated by both federal and state authorities in order to prevent drivers from becoming fatigued. Driver fatigue impacts alertness and reaction time and is responsible for a large number of road accidents each year.
LTL carriers can therefore be very inflexible so that they remain within the requirements of driver work hour regulations.
An exception to this common rule is White Glove LTL providers, who optimize for convenience, security, and customer experience. These carriers schedule drivers on morning and afternoon shifts so that they can flexibly meet their customers’ needs.
Common Accessorial Charges: Freight Specific Fees
Bill of Lading (BoL) Correction Fee:
The bill of lading is a required document to move a freight shipment, and functions as a receipt of freight services, a contract between a freight carrier and shipper, and a document of title.
It provides the driver and the carrier a clear record of the characteristics of the freight required for processing and invoicing. If there is an error on the BoL involving incorrect weight, dimensions, or freight class a correction fee may be imposed.
Because LTL carriers recombine shipments moving in the same direction, if freight takes up more space, requires more equipment, needs extra handling, or any other special requirements, it is slowing down other customers’ freight. A carrier will therefore charge accordingly to make up for any lost time moving other shipments on the truck
Additional charges are sometimes required for non-stackable and irregular-sized shipments, and if the dimensions of your freight being shipped are unusually long, you may be charged a fee.
These charges may not be necessary if you are working with a White Glove LTL provider, where pallets are deliberately never stacked atop one another in order to minimize the risk of damage, and trucks can be dedicated to only one customer’s freight at a time.
Understanding whether irregularly shaped freight will necessitate an additional charge or not may be important in assessing whether a carrier is providing the most competitive quote.
Hazardous Cargo Charge Fee:
If a shipment contains hazardous chemicals or substances there will often be an additional accessorial fee. Hazardous Materials may include the transport of fuels, bio-chemicals, and pharmaceuticals.
If a shipment requires temperature control in order to either remain above freezing or within a refrigerated range an additional accessorial fee may be necessary.
Common Accessorial Charges: Pickup and Delivery
Sort / Segregation:
Sorting or Segregation Fees are charged when shipments require sorting according to size, brand, flavor, or some other characteristic by a receiving location after delivery.
Limited Access Shipping:
The limited access category applies to a number of locations like private houses, schools, churches, military bases, prisons, convention centers, construction sites, airports, or ocean docks.
These are locations that restrict trucks from entering, and special authorization and scheduling may be required.
White Glove LTL carriers may be best positioned for these specialized deliveries (and charge less for them), either because they have invested in establishing relationships and credentials, or because they are optimized for final mile delivery focused on customer experience.
Notify Before Pickup / Delivery:
Applies when notification prior to pickup or delivery is requested. This can allow specific warehouse or shipping staff to be present to ensure that complete and correct cargo is loaded with the LTL carrier, simply to ensure that someone is available to receive a shipment or even to allow drop-offs to occur at unorthodox locations like street corners.
A delivery appointment is a specifically arranged time and date for freight arrival between the receiver and the carrier. It is an important consideration when you ship to a warehouse or facility that has strict delivery schedules.
Liftgate Pickup and Delivery:
The liftgate is a mechanical platform on the back of a vehicle that can be raised during the loading and unloading of heavy cargo.
This is used when there isn’t a loading dock or forklift at the site of pickup or delivery to load or unload the freight and is crucial for avoiding damage to the freight.
If you need assistance in loading your freight, consider discussing this option with your LTL provider. A liftgate should be used for almost every residential delivery, making it an important factor in White Glove LTL delivery services.
Detention Charges occur if a shipment is not ready on arrival for pickup or if the receiver cannot receive the shipment when it arrives.
It is standard practice for the first 15 minutes of wait time before unloading to be free of charge, while subsequent waiting incurs a penalty. This is due to the nature of most LTL carriers consolidating freight from multiple shippers onto one truck. Delays in dropping off and picking up at one stop create subsequent delays for every other stop on a truck’s route.
Inside-delivery is when freight is delivered to the door of a commercial facility or residence, inside a foyer or other storage area, or in a room up a flight of stairs.
If you don’t request inside delivery, a common practice is for the carrier to leave the shipment at the place where it was unloaded from the truck. This service is often provided by White Glove LTL companies.
In general, most LTL truck drivers are assigned a variety of deliveries each day. The receiving companies and residences change every day, and also the driving route.
A departing LTL driver arriving empty at the first shipper location on their pickup route may unexpectedly need to use five pallet positions rather than two. Because the driver has an empty truck at the time, he or she can take this load – however somewhere along the route the truck will fill earlier than planned, and another customer’s shipment toward the end of the route will be delayed.
Another driver may be available to be diverted to pick up the overflow, but there is an element of uncertainty to the ability to complete the pickup on time.
If goods are uniquely fragile or perishable, even with the more secure packing requirements of LTL shipping, they may be damaged when lumped with more durable cargo.
Dedicated freight service means that a pickup or delivery trip is reserved for one customer alone. That vehicle will then be outfitted with any needed storage equipment needed, and the cargo delivered at a predictable time rather than within a broad window.
Also known as Grocery and Food Warehouse Delivery/Pickup Fees can apply to shipments when a third-party service is used to load or unload pallets from a trailer, as is typical for a grocery store.
Storage fees come into play when it is necessary for the shipping company to hold freight for an extended amount of time.
Because LTL shipping involves more repeated loading and unloading and the transportation of freight from multiple sources on a common truck, the freight is almost always very securely packed, palletized, and shrink-wrapped to avoid damage.
White Glove LTL services will often include unpacking the shipment and removing all packaging materials, blankets, shrinkwrap, and other shipping debris from the receiving home or business.
In the case of furniture or appliances, removal of items that are being replaced may also be included.
Shippers can avoid problems with LTL relationships by being mindful of the following points.
Select LTL carriers with clear, transparent communication around rates and personalized professional customer service.
Sustainable Rates and Terms:
Negotiate rates and terms that reflect a sustainable and stable benefit for both sides of the transaction, rather than temporary discounts.
Long Term Relationships:
Build long-term relationships with preferred carriers, and if they perform well, treat them well. As issues arise it will be easier to deal with them within the context of these relationships.
Increase Lead Times:
Advance booking of shipments helps LTL carriers to best use their capacity and results in better rates from most carriers.
Properly Pack and Document Freight:
Properly packing, measuring, and documenting freight helps minimize surprises, damages, and disputes that neither shippers nor carriers want to expend resources on.
White Glove Delivery Services
While e-commerce has driven an expansion of the retail industry and the volume of LTL shipping, customer satisfaction in the physical condition, ease of tracking, timeliness of delivery, and range of delivery options has fallen in recent years.
As competition between retailers becomes more competitive, but delivery has become on average less satisfying for customers, White Glove services have become more popular as a final mile delivery solution.
White Glove services mean that carrier personnel offer an engaged level of service, and use added care, and go beyond what is offered by other LTL carriers.
Rather than optimizing for volume, their operations are optimized around customer experience, with a focus on how it positively or negatively impacts customer perception of the brand of the product they are delivering.
White Glove services do this by providing accessorial services such as dedicated delivery, after-hours delivery, inside delivery, limited access delivery, liftgate use, and debris removal – often without adding them as separate accessorial charges on top of established rates.
Deliveries are made with more attention to single customers and more urgency, rather than stringing as many pickups and deliveries together as possible within a given time frame, or practicing “drop and fly” by unloading and leaving without making contact with a receiver.
This makes them more reliable and customizable, and carriers are able to communicate more accurately and proactively about delivery times.
Additionally, White Glove carriers often take specific steps to avoid damage to freight, such as never stacking pallets or crates on top of one another.
Deliveries are inspected, and if damage does occur, pictures are taken and the shipper is contacted to find out how they would like the situation handled.
White glove services may be especially important for residential delivery to customers at their homes, some of whom may be living alone, elderly, or disabled.
For these customers, handling big, bulky products and their packaging with professional support can substantially elevate brand image.
This can also apply to a brand’s return policy, where a White Glove service is able to take the pain out of disassembly, packing, and loading.
In addition to protecting customer satisfaction and building brand loyalty, shippers may choose White Glove services for shipping furniture, electronics, home fitness equipment, appliances, or delicate luxury items that require extra care and attention.
How ExpressIt Works
ExpressIt is a White Glove LTL service optimized for first and last-mile customer experience. We understand that the customer’s impression and satisfaction with delivery and pick-up are an extension of their experience with the product’s brand.
While LTL carriers often limit pick up and delivery to when, where, and how it fits into their standard operations, ExpressIT prides itself on flexibly meeting needs and exceeding expectations. When you value real-time communication for you and your customer, when it needs to be there on the dot and today rather than “some time between” and “not after 4 PM” – we care, and we can get it done for you.
Less Than Truckload shipping is an expanding segment of the U.S. transportation market, filling a significant gap between parcel shipping and Full Truckload shipping, particularly for online retailers.
By obtaining a basic understanding of the components and variety of LTL shipping services, shippers and carriers can better collaborate and find mutually beneficial solutions.