If you’re a freight broker agent that primarily ships Full Truckload (FTL) you may have asked yourself, “What is LTL?” Or perhaps you already know that LTL stands for Less-Than-Truckload – something a dry freight “common carrier” would haul. This could mean anything from one skid to many skids but NOT a truckload.
When should you consider shipping LTL? When freight loads are less than a full truckload or anything from one pallet to, let’s say 5,000 pounds.
Also, when shipping LTL freight, there are different types of Carriers – Common Carrier or Contract Carrier.
With a Common Carrier, the Carrier has a regular route with SET rates (tariffs). A Contract Carrier is a Carrier that is under contract to one or many shippers/freight brokers with NO set rates. ALL Common Carrier LTL shipments are Dry Freight VAN Only.
So why ship LTL and not FTL? For shippers, the answer is simple – You can save a LOT of money. For freight brokers that ship LTL freight, it’s ALL about OPPORTUNITY! LTL is a $39 Billion Dollar Industry!!! It also provides for long-term stability and longevity with your customers and helps to diversify your book with a new value-added service. In the industry, it’s common place for freight brokers that ship LTL to experience an increase in their profit margin, which means more money for you and a great way to help grow your freight broker business.
As an example, a top freight broker agent working for Logistic Dynamics can average a gross profit margin of 30-40% per LTL load and average 25% in gross profit margin across the board.
Knowing this, you might wonder why ALL freight brokers aren’t shipping LTL. The truth is, most freight brokers not familiar with shipping LTL think it’s too hard to take on and don’t even know where to begin. The good news is; it doesn’t have to be difficult. If you’re a freight agent not familiar with shipping LTL or have never shipped LTL before, don’t be scared – get INFORMED! Some freight brokers have done LTL in the past and some have not due to fear of the unknown. There’s no need to think of LTL any differently than FTL…you just need MORE INFO.
First, you need to find out what the product is and be EXTREMLY specific about it – get pictures, a description, dimensions, any and all details you can on the shipment. Next, you need to know how much the product weighs. If the shipper says the product weighs 300 pounds it most likely does NOT (how many things do you know that weigh exactly 300 pounds?). If the weight is off anything more than 50 pounds, the LTL carrier WILL find out. And, finally, get the EXACT dimensions of the SHIPMENT when it is on the SKID(S) – NOT just the product itself.
Another important factor to know when shipping LTL is the Class. What is Class?? To put it into perspective…anything you see, ship, touch, etc. has a “Freight Class” associated with it. And all freight classes are not created equal. For example, Class 50 is very heavy, dense freight (nuts, bolts, iron, steel). Class 500 is the exact opposite – extremely light and fluffy freight (feathers, ping pong balls, etc.). Please note that regular truckload or FTL customers have NO idea what class they ship so DON’T GUESS! If you find that you’re unsure or need assistance helping your customer define the class they ship, you should reach out to an experienced professional that is familiar with LTL and Classes.
BONUS TIP:
Shipping LTL is different from shipping Partial Truckload (aka Load-To-Ride). When should you consider shipping Partial Truckload?
- If you ship 3,000 pounds or more using an LTL common carrier
- If your freight is light or takes up a lot of space
- If you find it cheaper to send a full truckload than to send 5,000 pounds
- If you ship 10 or more pallets as a full truckload
What are the advantages of shipping Partial vs LTL?
- Partial Truckload (or Load to Ride) ships your freight directly as soon as it is loaded
- Lower risk of damage with less handling
- Lower prices than LTL or Truckload
- Transit times are generally faster than LTL due to the lack of re-handling
Please know that the above information provided serves only as a basic introduction to Less-Than-Truckload (LTL) freight shipping. Many important factors come into play when deciding to ship LTL as opposed to other services. If you are a freight broker agent that is unfamiliar with shipping LTL, please make sure to obtain proper training and fully educate yourself before launching into this endeavor. An error on your part could mean an increase in freight charges or even worse, losing credibility to your customer.
