What is LTL Freight?
LTL shipments typically weigh between 100 and 10,000 lbs. Less than truckload carriers collect freight from various shippers and consolidate that freight onto enclosed trailers for linehaul to the delivering terminal or to a hub terminal where the freight will be further sorted and consolidated for additional linehauls. In most cases, drivers start the day by loading up and heading out to make deliveries first, then begin making pickups once the trailer has been emptied for return to the terminal for sorting and delivery next day; thus, most pickups are made in the afternoon and most deliveries are performed in the morning. *
How does the LTL model work?
Pickup/delivery drivers usually have set routes which they travel every day or several times a week, so the driver has an opportunity to develop a rapport with his customers. Once the driver has filled his trailer or completed his assigned route, he returns to his terminal for unloading. The trailer is unloaded and the individual shipments are then weighed and inspected to verify their conformity to the description contained in the accompanying paperwork. All LTL freight is subject to inspection for this purpose, though not all freight is inspected. Next, the freight is loaded onto an outbound trailer which will forward the freight to a breakbulk, a connection, or to the delivering terminal. An LTL shipment may be handled only once while in transit, or it may be handled multiple times before final delivery is accomplished.
Transit times for LTL freight are longer than for FTL. LTL transit times are not directly related only to the distance between shipper and consignee. Instead, LTL transit times are dependent upon the makeup of the network of Terminals and Breakbulks that are operated by a given carrier and that carrier's beyond agents and interline partners. For example, if a shipment is picked up and delivered by the same freight terminal, or if the freight must be sorted and routed only once while in transit, the freight will likely be delivered on the next business day after pickup. If the freight must be sorted and routed more than once, or if more than one linehaul is required for transportation to the delivering terminal, then the transit time will be longer. Also, delivery to beyond points or remote areas will almost always add days to the transit time.
The main advantage to using an LTL carrier is that a shipment may be transported for a fraction of the cost of hiring an entire truck and trailer for an exclusive shipment. Also, a number of accessorial services are available from LTL carriers, which are not typically offered by FTL carriers. These optional services include liftgate service at pickup or delivery, residential (also known as "non-commercial") service at pickup or delivery, inside delivery, notification prior to delivery, freeze protection, and others. These services are usually billed at a predetermined flat fee or for a weight based surcharge calculated as a rate per pound or per hundredweight.
Preparing shipments for LTL carriers
Since freight sent via LTL carriers must be handled several times during transit it must be packaged to protect it from scuffing, crushing, or dropping due to carelessness or inattentiveness by dockworkers. Thus it is normally good practice to load freight onto pallets or package freight into crates. Sturdy cardboard boxes are normally acceptable as well.
Packaging freight in this manner serves several purposes:
- It protects the freight from damage.
- It protects other freight from being damaged by your freight.
- It helps to avoid loss situations; situations in which some of your freight is separated from the rest and lost in transit.
Since freight sent via LTL carriers is subject to misrouting or misloading it is a good practice to put the Tracking number on each side of each piece of freight. If the Destination State and Zipcode are affixed to each side as well misloading is less likely to occur. Even though it is not required it is good practice to affix a relatively large label including four letter Carrier Code, Tracking Number, Destination Station, and Destination Zipcode of the shipment (i.e. ABFS123456789 GA 30301). The easier it is for dockworkers to identify an individual shipment the less likely it is to be put in the wrong place. If the only piece of identification is the tracking number the dockworker will have a harder time identifying the shipments pieces and as such the chances of freight being loaded onto the wrong trailer is greater thereby increasing the transit time and also increasing the chances of the shipment being lost.
Factors relating to profit margin
LTL shipping is a thin-margined business, so costs must be minimized. Two of the biggest costs for LTL carriers are fuel and labor. As many LTL carriers have unionized labor, labor costs are relatively fixed, so minimizing fuel usage is a significant goal. This translates to maximizing the utilization of every trailer for every mile driven - ideally, every trailer carrying freight would contain a maximum level of freight by both weight and volume. The weight and volume characteristics of a set of freight is referred to as "freight mix".
Density of freight/freight mix
To achieve a good freight mix on average, one method employed by the industry is the use of a two-tiered transportation network involving a clique of large freight way-stations (called "breakbulks", for example), with smaller freight "terminals" fanning out from each breakbulk facility.
The philosophy behind the "breakbulk approach" is that by consolidating a large amount of freight from dispersed locations (i.e. from the connected terminals), a larger and more diverse pool of freight is available to choose from so as to achieve better freight mix for the long haul between breakbulks. For example, the freight coming from one terminal location may be relatively light and bulky, whereas the freight from another terminal location may tend to be much denser. Some freight may be irregular in shape. By consolidating the freight originating from multiple terminals in one location, there is a wider range of freight to choose from, so as to efficiently pack each trailer for the long inter-breakbulk journey.
In this terminal-breakbulk network, a typical shipment would first be picked-up from a customer location and dropped off at the local terminal. It would then be trucked a relatively short distance (a couple hundred miles, for example) to the terminal's associated breakbulk. From there, the shipment would be trucked a relatively long distance to the breakbulk associated with the destination terminal, and then finally trucked to the destination terminal, to be delivered to the customer. The continual goal in this network is, however, to minimize transfers of freight. Ideally, only one or even no break bulks are involved in the process.
This information has been compiled thanks to: wikipedia.org |
