Less-Than-Truckload (LTL) shipping is the transportation of relatively small freight. The alternatives to LTL carriers are parcel carriers or full truckload carriers. Parcel carriers usually handle small packages and freight that can be broken down in to units less than 150 US pounds. Full truckload carriers move freight that is loaded into a semi trailer. Semi trailers are typically between 26 and 52 US feet and thereby require a substantial amount of freight to make such transportation economical.
Less Than Truckload carrier operations versus Full Truckload operations
Full Truckload
Full truckload carriers normally deliver a semi trailer to a shipper who will fill the shipment with freight for one destination. After the trailer is loaded the driver returns to the shipper to collect the required paperwork (ie Bill of lading, Invoice, Customs paperwork) and depart with trailer containing freight. In most cases the driver then proceeds directly to the consignee and delivers the freight him or herself. Occasionally, a driver will transfer the trailer to another driver who will drive the freight the rest of the way. Full Truckload transit times are normally constrained by the drivers availability according to Hours of Service regulations and distance. It is normally accepted that Full Truckload drivers will transport freight at an average rate of 47 US miles per hour (including traffic jams or queues at intersections).
One advantage Full Truckload carriers have over Less than Truckload carriers is that the freight is never handled in route whereas an LTL shipment will typically be transported on several different trailers.
Less Than Truckload
Less than truckload carriers typically have several drivers in a city where a shipper is located to collect freight from various shippers. Usually the same driver will visit the same shipper each time a shipment goes by a particular carrier. Once the driver has made several stops and has picked up enough freight to fill his trailer with either enough volume or weight then the driver returns to his terminal to have his trailer unloaded. The trailer is unloaded and the individual shipments are then weighed and rated for billing purposes. Next, the freight is then loaded onto an outbound trailer which will forward the freight to either a breakbulk or other terminal. Once the freight arrives at its next stop along its way it will be unloaded and reloaded onto another trailer and forwarded to the terminal in its destination city. Once the freight arrives at its destination city the freight will be loaded onto a trailer that will deliver it to the consignee. A shipment maybe handled 4 or more times by the carrier, not including the initial loading and unloading.
Transit times for LTL freight is much slower than for FTL. Transit times in LTL shipments are not exactly related to the direct distance from shipper to consingee. LTL transit times are solely dependent upon the makeup of the network of Terminals and Breakbulks that are operated by a carrier. For example, if a carrier offers a next day service region shipments ranging from 0 to approximately 500 miles will most likely be delivered at similar times during the next day.
The main advantage to using an LTL carrier is that a shipment may be delivered at a very small percentage of the cost if it had to be sent on a large trailer by itself. ALso, LTL carriers typically offer guarantees whereas Full Truck Load carriers normally do not.
Integrating FTL and LTL carriers for shipper cost savings
Shippers with enough volume of LTL freight may choose to use a Full Truckload Carrier to move the freight directly to a break-bulk facility of an LTL carrier. For example, if a North Carolina shipper has a large quantity of shipments for Western US States such as CA, NV, OR, WA, and ID then the shipper can realize significant cost savings by having an FTL carrier transport the freight to a breakbulk facility nearest the center of such shipments in terms of the carriers network. In this case the shipper may choose to send the freight to a break-bulk in CA. The use of an FTL carrier to transport this freight is a cost savings because the freight will not have to be unloaded and reloaded as many times.
Less Than Truckload operations versus parcel carrier operations
Parcel carrier operations
A parcel carrier traditionally only handles shipments weighing less than approximately 150 US Pounds. Parcel carriers typically still compete with LTL carriers by convincing shippers to break larger shipments down to smaller packages. Parcel carriers typically refer to multipiece shipments as "Hundredweight" shipments as the rating is based on 100 US Pounds. The Hundredweight rate is multiplied by the shipment's weight and then divided by 100 and then rounded up to the nearest hundred.
