Using Less-Than-Truckload Carriers To Cut Shipping Costs

August 28, 2024

by Jaidyn Farar

A semi-truck driving down the road in the evening.

When sending items that weigh up to 150 pounds, parcel shipping is usually the way to go. But what about large, heavy items or bulk shipments? For these types of deliveries, freight shipping is the most cost-effective method.

This article will explain how businesses can cut shipping costs by relying on a diverse mix of less-than-truckload carriers. But let’s start at the beginning—what exactly is less-than-truckload shipping?

What is LTL shipping?

Less-than-truckload (LTL) shipping is a type of freight shipping used when a shipment weighs between 150 and 15,000 pounds, is palletized or crated, and doesn’t require a truck’s full capacity to transport.

In LTL shipping, multiple shipments from different businesses are combined into a single truck, allowing each shipper to share the transportation costs. This makes LTL a cost-effective and flexible option for sending large shipments or bulky items.

What is an LTL carrier?

A less-than-truckload carrier is a transportation service provider that consolidates shipments from multiple customers into a single truckload. These carriers coordinate pickups and deliveries, combining shipments with similar destinations to optimize the use of space and reduce shipping costs.

Like parcel shipping, LTL shipping is more efficient and cost-effective when you rate shop and use multiple carriers. The carrier mix you use will depend on your shipping needs, including destinations, handling requirements, and delivery requirements. For example, if you need residential delivery, you’ll want to find a carrier that offers that service.

By using multiple less-than-truckload carriers, businesses can efficiently ship goods across the country (or simply between states) without having to pay for unused truck space.

LTL vs. truckload carriers

So, when should businesses use an LTL carrier vs. a truckload carrier?

The main difference between LTL and truckload carriers is the size of the shipments they handle. As mentioned, LTL carriers consolidate multiple smaller shipments (up to 15,000 pounds) from different customers into a single truck. In contrast, truckload carriers transport larger shipments that fill an entire truck. While this comes with a higher cost, it also allows truckload carriers to offer more direct routes and faster transit times.

Benefits of less-than-truckload shipping

Less-than-truckload shipping has several significant benefits, including cost savings, flexible delivery options, a decreased environmental impact, and a lower risk of package damage.

Cost savings. With LTL shipping, businesses can share transportation costs with other shippers by combining small loads into one truck. Because this shared approach costs less than paying for an entire truck, it’s a more budget-friendly option.
Flexibility. Less-than-truckload carriers offer a range of services and options, such as liftgate delivery, inside pickup and delivery, and special handling, which can be tailored to meet specific shipping needs.
Environmental efficiency. By consolidating multiple shipments into one truck, LTL shipping maximizes the use of available space and reduces the number of trucks on the road. The result? Decreased fuel consumption and greenhouse gas emissions.
Lower risk of damage. LTL loads are typically palletized and secured to minimize movement and prevent damage. This helps reduce the risk of damage compared to parcel shipping, where packages are handled more frequently.

How LTL works

LTL shipping uses complex networks of shipping lanes and consolidation hubs. Loads are picked up, consolidated and transported, and deconsolidated for final delivery.

Let’s explore the process in more depth:

Drivers pick up multiple loads. The shipping process begins when drivers head out to pick up scheduled shipments. They gather loads from multiple shippers within the same area to efficiently fill a truck's capacity.
Shipments are consolidated and transported. Once collected, shipments are transported to a local terminal or hub where they’re consolidated with other freight heading in the same direction. The LTL carrier then transports the shipments to their respective regional distribution centers or hubs. Depending on the distance and the specific routes involved, the freight may be transferred between several terminals.
Shipments are deconsolidated. When the truck reaches a regional terminal close to the final destination, shipments are deconsolidated. The freight is separated according to delivery addresses and prepared for last-mile delivery.
Drivers complete last-mile delivery. Finally, each shipment is delivered to its destination.

Types of less-than-truckload carriers and when to use them

Every LTL carrier has its own business model, pricing, and specializations. Along with these differences come both advantages and disadvantages, and it’s up to shippers to find the right balance of cost, service, and speed to meet their transportation needs.

Let’s explore seven types of LTL carriers and when to use them.

National

National LTL carriers are the most common type and are ideal for shippers who need to send shipments across the country. These large companies generally have networks that stretch from coast to coast and border to border, though they might rely on partners for last-mile delivery to some areas.

While national carriers provide broad coverage, their rates aren’t always as competitive as those offered by specialized carriers, especially for low-volume shippers. Despite this, most businesses have at least one national LTL carrier in their network.

Multi-regional

Regional LTL carriers don’t offer coverage across the entire country; instead, they serve several specific regions. Their coverage area is smaller than that of national carriers but larger than that of regional carriers (discussed below). While they don’t have the coast-to-coast reach of national carriers, regional carriers excel in providing efficient service within their regions, often offering competitive pricing for medium to high-volume shippers.

Regional

Regional LTL carriers serve a specific, defined area—typically a few states. A regional carrier generally operates several facilities within its region but doesn’t extend its coverage to other areas.

Regional carriers offer significant advantages for shippers within their service areas, including competitive pricing and high-quality service. Because they’re focused on relatively small geographic locations, they have in-depth knowledge of regional needs, allowing them to ship quickly and efficiently and avoid disruptions.

Sub-regional

Sub-regional LTL carriers cover smaller portions of a region, making them ideal for shipments that don’t travel long distances. Businesses that ship regularly within these sub-regions have a greater opportunity to negotiate volume discounts.

Asset-light

Asset-light LTL carriers are less common than the other types of LTL carriers we’ve discussed so far. What sets them apart is that they keep their assets—trucks, terminals, and drivers—to a minimum. Instead, they partner with other truckload and LTL carriers to coordinate shipments, potentially renting out terminals or sub-contracting routes.

Because asset-light carriers don’t need to invest in infrastructure, they can offer large coverage areas and affordable rates. However, the trade-offs include longer transit times and more handling, as freight may be transferred between multiple carriers during its journey.

Load-to-ride

Load-to-ride carriers focus on bulky or long-range shipments where minimizing product handling is a priority. In this model, the driver picks up freight from multiple shippers and drives directly to the destination, rarely stopping at terminals. This reduces the number of handoffs and the potential for damage by keeping the shipment in a single truck for the entire journey.

The downside? Load-to-ride shipping requires flexibility with the carrier's schedule and may have limitations in capacity and coverage.

Reefer (refrigerated)

Reefer (or refrigerated) LTL carriers specialize in long-range shipments that require temperature control, such as food and pharmaceuticals. These carriers use refrigerated containers to keep shipments at consistent temperatures throughout the journey, with few transfers at terminals.

Getting started with LTL

When getting started with LTL, it’s important to know what to look for in a carrier.

To find the less-than-truckload carriers that are a fit for your business, you’ll need to do some research. Consider each carrier's pricing structure, network density and geographic coverage, available equipment, service offerings, and ease of use to make sure they can meet your shipping needs.

Pricing. Though you might be tempted to evaluate base rates alone, remember to take service into account when evaluating costs. Getting low rates doesn’t mean much if you have to spend lots of time and money dealing with the consequences of damage and delays.
Network density and geographic coverage. Assess the carrier's network density by determining how many trucks operate in the lanes you need covered. Additionally, learn which geographic areas the carrier covers, making sure they can deliver to your desired areas.
Available equipment. Check whether the carrier provides the necessary equipment for your shipments, such as refrigeration for temperature-sensitive goods or lift gates for easier loading and unloading.
Service. An LTL carrier’s service plays a major role in your customers’ satisfaction. Work with carriers that pick up and deliver shipments on time, don’t have high damage rates, and offer additional services you need, such as inside or residential delivery.
Ease of use. Consider the digital platform and communication tools offered by the carrier. Can you easily request quotes, track shipments, and file claims through a self-service portal? These features will streamline your shipping operations and improve efficiency.

Things to be aware of when shipping LTL

Shipping LTL requires careful coordination to ensure smooth and efficient delivery. Being mindful of the following factors can help you avoid common issues and improve the reliability of your shipments.

Paperwork. Proper documentation helps prevent delays and ensures that your shipment is processed correctly. For every LTL shipment, you’ll need to provide a complete and accurate bill of lading (BOL). This document will include detailed information about the shipper and recipient, as well as the specifics of the shipment itself.
Freight protection. While LTL shipping decreases the likelihood of damage, there’s always a chance that products may get broken or ruined during transportation. To prevent damage, package your shipments securely, considering factors like shifting during transport, handling, and exposure to different temperatures and humidity levels.
Weather. You should be aware of weather conditions that could impact your shipment's transit; for example, snow, ice, and floods can block roads and lead to delays. To avoid disruptions, monitor weather forecasts for the areas your shipment will travel through and plan accordingly.

Connect with reliable LTL carriers instantly

Some LTL carriers prioritize cost savings, offering lower rates but potentially slower delivery times. On the other hand, some LTL carriers focus on providing faster service at a higher price. By working with multiple carriers, you can leverage these distinct offerings to optimize your logistics strategy.

A multi-carrier shipping platform like EasyPost Enterprise makes it easy to connect with the right blend of carriers for your shipping strategy.

EasyPost Enterprise simplifies complex shipping operations by providing access to over 100 parcel, LTL, and truckload carriers, generating labels at sub-second speeds, providing real-time shipment visibility, and more.

Get in touch to learn how EasyPost Enterprise streamlines LTL carrier management.