If you’ve ever had to make a shipment of small freight that’s too large for parcel or freight that doesn’t require the use of an entire trailer, you’ve needed less-than-truckload (LTL) shipping! Perhaps you’ve used LTL shipping and didn’t even realize it. We’re going to explain the process, pricing, and how it works so that you can get a little glimpse into the world of LTL.

How does LTL shipping work?

When shipping LTL, the shipper pays for the portion of a standard truck trailer that their freight occupies. Other shippers and their shipments fill up the unoccupied space.

The shipping circle

There are seven steps in the process.

  1. Obtain quote & schedule pickup
  2. Afternoon pickup on local P&D Route
  3. Shipments are sorted & consolidated at origin terminal
  4. Shipments are cross-docked onto linehaul trailer
  5. Shipments are line hauled to the delivering terminal
  6. Shipments are cross-docked & loaded onto the local P&D route
  7. Dispatched for A.M. delivery

How much do LTL shipments weigh?

LTL shipments typically range between 150 lbs and 19,999 lbs. A common weight is 250-1500 lbs per pallet shipped. It can, however, be more, depending on the product being palletized and shipped.

How are the rates determined?

The rates are typically applied to 100-lb increments. These are called CWT rates and are normally discounted. LTL shipping refers to the size of the shipment in pounds and space (PCF—pounds per cubic foot) used by dimensions (LxWxH).

Common LTL Terminology

If you’re new to the LTL industry, here are some important terms for you to be familiar with.

  • Pallet/Skid. A standard PLT in LTL is 48 inches * 40 inches * 48 inches (L*W*H).

  • Bill of Lading (BOL). This legally binding document provides the truck driver and the trucking company with all of the details to process the shipment and bill it correctly. Your company’s BOL must be given to the carrier when the shipment is picked up.

  • Terminal/Hub. A strategically and specialized distribution building for redistributing goods from one truck to another serves as an intermediate transfer point. The facilities are primarily used for staging loads (rather than long-term storage) and possess very little if any, storage area.

  • Forklift/Pallet Jack. A forklift (motorized) and pallet jack (non-motorized) are equipment used to move pallets around a terminal, warehouse, or trailer.

  • Pup Truck/Dry Van. A pup is typically 26-28 feet long and commonly used to make local pickups and deliveries. A dry van is either 48 or 53 feet long, and is typically used for line hauling freight and can transport as much as 45,000 lbs.

LTL Pricing

Pricing is a very important piece of the LTL puzzle. Pricing drives many (if not most) business decisions. At yourLTL, we are transparent about our pricing. We want to be upfront about how we determine rates and what costs get passed down to our customers. LTL pricing is determined by the following:

    • Tariffs. Tariffs are documents that set applicable rates, discounts, and costs for moving freight. Tariffs are essentially a price list. Tariffs and pricing are based on the volume and type of freight a customer ships. Most often, the more volume a customer ships, the better the pricing they will receive. Items listed within a tariff include:
      • Base rates or rate base (czarlite or house rates typically apply)
      • Applicable discounts and absolute minimum charges
      • Accessorial charges and applications
      • Fuel surcharge
      • Class exceptions
      • Other terms and conditions

    • Rate base. Base rates vary from carrier to carrier, and are typically calculated per CWT (cost per 100 pounds). The CWT, or less commonly referred to centum weight, is based on your freight classification, shipment weight, and zip code combinations. While there are 18 different freight classifications, there are also six different “Weight Breaks” used to assign freight charges based on 100-lb increments.

    • Discounts. Carriers often provide discounts on gross charges to lower the overall cost on heavier weighted shipments. These discounts can vary by carrier based on the base rates being used to calculate charges. Typically, the more favorable the freight is to the carrier, the higher the discount will be.

 

  • Absolute minimum charges. The absolute minimum charge (AMC) or minimum charge (MC) is the lowest amount a carrier is willing to accept to haul a shipment from pickup through delivery. Lighter weighted, lower-class freight traveling at a shorter length of haul (LOH) is more susceptible to hitting these charges as the weight, the distance between origin and destination, and class drive the CWT rate.

 

  • LTL freight classification. 
    • NMFC#: Every product that is moved by an LTL carrier has an assigned freight class and National Motor Freight Classification number (NMFC #) from the National Motor Freight Traffic Association (NMFTA). The NMFTA has 18 freight classes ranging from 50-500, and all LTL carriers acknowledge the product’s classification assigned by the NMFTA.
    • Class variables: Freight classes vary depending on the product’s size, value, density, the difficulty of shipping that particular product, and packaging. The same item could ship out at two different classes depending on packaging and assembly.

So many things to consider! We will be following this blog with part II next week. Stay tuned to learn more about how LTL shipping works. In the meantime, if you want to speak to someone or get a quote on an upcoming shipment, contact us at 855.218.7LTL (7585).