Truckload (TL) or Less-Than-Truckload (LTL) — understand and select
By: Train Learn Grow
Tags: Transportation, Less Than Truckload Ltl, Full Truckload Ftl, Logistics, Supply Chain

When moving cargo by road, you will often have to decide between using a full Truckload (TL) service or a Less Than Truckload (LTL) one.

Many factors are taken into account when making this decision, but before we review a few of them, let’s first define and highlight the main differences between TL and LTL.

Truckload — TL

When using Truckload (commonly called Full Truckload — FTL — in Europe), the shipper (or other party ordering the transport) pays for a whole transport unit ( van, truck, trailer, etc.) which will carry exclusively his cargo from one or more pick-up points to one or more drop-offs points.

As the shipper is paying for the whole transport unit, TL shipments generally require a higher volume of cargo to make them economical.

Nevertheless, a shipper may also select this option for smaller volumes of cargo, notably if he is working under a time constraint and needs to expedite his shipment.

Less Than Truckload — LTL

LTL which stands for Less Than Truckload refers to a method of shipment where the shipped items will not take up the entire available space on the Truck and where the shipper (or other party ordering the transport) pays only for the part of the trailer space he uses.

Depending on the exact volumes, available services, and situation, a shipper will choose between one of the 2 available LTL options: common carrier LTL or volume LTL/partial truckload.

Common carrier LTL

This LTL service relies on an established systematic network which operates as shown in the below diagram:

Carrier “constantly” picks-up cargo at shippers in a certain area using various transport equipment and solutions and delivers it to a consolidation warehouse, where it is — generally using a cross-docking approach — transferred to larger trucks and brought to a distribution warehouse in another area.

A shipper pays for the transport on a cargo weight (actual, volumetric, or linear) basis and, in the US, on a density / NMFC class one.

Learn more about linear footage here.

Volume LTL — Partial Load

With Volume LTL — Partial Load the shipper’s selected carrier will collect the booked cargo and the cargo of other shippers, generally with a semi-trailer or a large Truck and deliver it (in the same or different order) to the consignees of each shipper.

The shipper pays only for the part of the truck he uses, typically in function of the truck’s used space (generally using linear feet or meters, weight or pallet count) and some accessorial items or surcharges comparable to the truckload ones may apply.

The US NMFC class may not be required.

Some decision factors

Now that you are familiar with LTL and TL — let’s look at some of the decision factors.

Transit time -

LTL will typically take a least one day longer than TL and the shipper may not always be able to allow for this additional transit time.

TL can also offer 2 drivers which will increase the distance which can be covered per day from cca. 500 to 1000 miles for trailers and semi-trailers — allowing for much faster delivers.

With TL, the shipper can also use vans and smaller, faster, dedicated equipment.

Services -

LTL carriers generally offer additional services, such as loading/unloading at origin/destination, inside delivery, advanced notification of arrival, appointment arrangement… and these services may not be available with Truckload carriers.

Price -

Of course, the main differentiation factor is the price and this will directly depend on how much cargo you have to transport.

The below diagram gives an idea of typical pricing break points between the different services.

Of course, the best way to ensure you are getting the best rate, notably when in the service cross over weight brackets, is to calculate the various price options using your available contracts or by sending out spot quotes.

Other -

Finally, other factors, such as the value of cargo, the risk of theft, the density, shape or dangerous nature… may impact the service selection but we will not go into details here.

With time and experience, you will be easily able to determine which service, Truckload or Less Than Truckload, is most suitable for your situation — and in the meanwhile we hope the items covered in this article will help.

FURTHER LEARNING

If you want to take this further, you can subscribe to one or our Ground transport focused eLearning courses:

Americas ground transport essentials

(focused on Truckload and Less-Than-Truckload)

Europe inland transport essentials

(Truckload, Less-Than-Truckload, Oversized and somewhat Rail and Barge)

Use the coupon LTL10 to knock $10 off the price of these courses.