LTL vs. Truckload Freight: Understanding the Differences

In the world of logistics, there are two primary modes of transportation for freight: LTL and truckload. While both are commonly used to move goods across the country, they have different characteristics that make them suitable for specific types of shipments.

LTL in logistics stands for Less Than Truckload. This type of shipping is used for shipments that are too small to fill an entire truck. LTL networks are made up of carriers who consolidate multiple LTL freight shipments from different shippers into one truckload. The main advantage of LTL freight shipments is that it allows shippers to save money on transportation costs by sharing the cost of the truck with other shippers.

What is the standard LTL shipment?

The LTL standard refers to the industry-wide standard for LTL freight shipments. This standard includes the linear feet on the truck along with pallet count, and a maximum weight.

What is the standard TL shipment?

A standard truckload shipment refers to a shipment that fills an entire semi-trailer truck. Typically, a standard truckload shipment weighs between 10,000 and 40,000 pounds and takes up about 48 to 53 feet of trailer space. It's a common way for businesses to move large quantities of goods from one place to another efficiently and cost-effectively. With a standard truckload shipment, the shipper pays for the use of the entire truck, regardless of whether the load fills the entire space or not. This is in contrast to less-than-truckload (LTL) shipments, where multiple shipments from different shippers are consolidated into a single truck for efficiency.

What are LTL carriers?

LTL carriers are companies that specialize in moving LTL freight shipments. These carriers have their own LTL networks and typically offer a range of services, including pickup and delivery, tracking, and guarantees along with other accessorial services

What are Truckload carriers?

Truckload carriers, also known as truckload freight carriers, are companies that specialize in transporting large quantities of freight that require a full truckload of space. These carriers typically have a fleet of tractor-trailers or other large trucks, and they provide transportation services to businesses and organizations across various industries. Truckload carriers usually offer a range of services, including door-to-door delivery, expedited shipping, and specialized equipment for handling specific types of cargo. They may also offer additional services such as temperature-controlled transportation for perishable goods, hazardous materials transport, and oversized or overweight freight transport.

Truckload carriers can be divided into two main categories: asset-based carriers and non-asset-based carriers. Asset-based carriers own their own trucks and equipment and provide their own drivers. Non-asset-based carriers, on the other hand, do not own their own equipment and rely on subcontractors or other carriers to provide the trucks and drivers. Overall, truckload carriers play a critical role in the transportation industry by providing efficient and reliable transportation services for large quantities of freight.

What is the biggest difference between LTL & TL carriers?

The biggest difference between LTL (Less-than-Truckload) and TL (Truckload) carriers is the amount of freight that they transport in a single shipment.

LTL carriers consolidate multiple smaller shipments from different shippers into a single truck, which means that the shipment doesn't fill the entire truck. In contrast, TL carriers transport a full truckload of freight for a single shipper, which means that the shipment fills the entire truck.

Because LTL carriers are transporting multiple shipments from different shippers, they usually have to make multiple stops and pickups along the way to deliver all of the shipments to their respective destinations. This can result in longer transit times and potentially more handling of the freight, which can increase the risk of damage or loss.

TL carriers, on the other hand, can provide faster transit times and a more direct route for the shipment since there are no stops or pickups along the way. However, TL shipments are usually more expensive than LTL shipments since the shipper is paying for the entire truck, regardless of how much space the shipment takes up.

Overall, the main difference between LTL and TL carriers is the amount of freight being shipped, which can impact the transit time, handling, and cost of the shipment.

How do you calculate the cost of a truckload shipment?

The cost of a truckload shipment can vary depending on several factors, including the distance, weight, size, type of cargo, and any additional services required. Here are the main factors that are typically used to calculate the cost of a truckload shipment:

1. Distance: The longer the distance of the shipment, the higher the cost will be. Freight carriers typically charge a rate per mile based on the distance between the origin and destination. Different zones of the country can also have significant volatility in $/mile.
2. Weight: The weight of the shipment can also impact the cost since heavier shipments require more fuel and may require special equipment or handling. Carriers usually charge a rate per pound or per hundredweight for the weight of the shipment.
3. Size: The size of the shipment can also impact the cost, as larger shipments may require more space and equipment. Carriers may charge additional fees for oversized or overweight shipments.
4. Type of Cargo: The type of cargo being shipped can also affect the cost, as certain types of cargo may require special handling, such as hazardous materials or temperature-controlled shipments.
5. Additional Services: Any additional services required, such as expedited shipping, liftgate service, or inside delivery, will increase the cost of the shipment.

To calculate the cost of a truckload shipment, you would typically multiply the rate per mile by the distance of the shipment, and then add in the weight, size, and any additional service fees. Keep in mind that rates may vary depending on the carrier and market conditions, so it's always a good idea to compare rates from multiple carriers to get the best price.

How do you calculate the cost of an LTL shipment?

To calculate the cost of an LTL freight shipment, carriers use a density calculator to determine the freight's density, which is then used to assign an NMFC freight class. The NMFC freight class is a standardized system that categorizes freight based on its density, stowability, handling, and liability. From there pricing is rated off the weight, zip codes and freight class through a rating engine to determine the cost.  A TMS solution such as ViewPoint can optimize the carrier rating.

What are the pricing structures for LTL market?

The main difference between blanket and custom contracts for LTL (Less-than-Truckload) shipments is the level of flexibility and specificity in the pricing and terms of the agreement.

A blanket contract is a type of LTL contract that covers a wide range of shipments for a specific period, usually one year. The pricing and terms of the agreement are typically fixed and apply to all shipments, regardless of the destination, weight, or other factors. This type of contract is ideal for shippers who have a high volume of regular LTL shipments to multiple locations and want to simplify the pricing and payment process.

A custom contract, on the other hand, is a more flexible and tailored agreement that is negotiated between the shipper and carrier based on the specific needs of the shipper. The pricing and terms of the agreement are typically customized to the individual shipment, taking into account factors such as the destination, weight, and other requirements. This type of contract is ideal for shippers who have unique or complex shipping requirements, such as specialized equipment or handling, and want more control over the pricing and terms of the agreement.

What are the pricing structures for the TL market?

There are two primary types of truckload shipments: spot truckload and contract truckload. Spot truckload refers to shipments that are booked on the spot market, where carriers bid on available loads. Contract truckload, on the other hand, is a long-term agreement between a shipper and carrier for a specific amount of capacity.

While both LTL and truckload shipping have their advantages and disadvantages, it ultimately comes down to the size and nature of the shipment. Many shippers will find partnering with a logistics 3PL like Translogistics will offer the best solution as each individual shipment can be mode optimized against both carrier options. LTL freight shipments are ideal for small to medium-sized shipments, while truckload shipping is more suitable for larger shipments that require an entire truck. Understanding the differences between these two modes of transportation is essential for shippers to make the most informed decisions when it comes to their shipping needs.

Want to learn more? Check out how detention charges work in the LTL & truckload networks.