When you need to save on LTL shipping, it can be difficult for shippers to find the lowest rate that will fit their shipping needs. LTL (less-than-truckload) freight shipments involve small freight deliveries that are too large to be considered parcels, yet too small to fill an entire truckload. LTL freight shipping rates can be very complex and confusing, but third-party logistics (3PL) providers, such as Logistics Plus, can help ensure you are receiving the best possible rate. Make sure you follow these tips to save the next time you have an LTL shipment:
Know exactly what your shipment is
It is crucial to be exact when weighing and calculating the size of a shipment. Shippers should never use an estimate for the weight or size of their items because if they are wrong, carriers will charge additional fees that will only increase the cost of your shipment. Also, find out the exact and correct NMFC item number and description for your commodity and make sure it is noted on your bill of lading. Some commodities even have freight density exceptions that can also impact your rates. More carriers are enforcing bill of lading accuracy and avoiding these surprise fees is a very important way shippers can keep their total costs to a minimum.
Choose the correct freight class
Understanding freight classifications is important to saving money on LTL shipments. Freight classifications are based mainly on density, but other factors such as liability and handling are also considered. There is a total of 18 standard classes, and choosing the correct one is crucial to avoiding additional fees and costs. A lot of times, these freight classes are negotiable with carriers making it possible to reduce your shipping costs as much as possible.
Maximize your pallet space
Most LTL carriers have very specific and often complex cubic capacity rules which can greatly increase the cost of your shipment. Carriers impose minimum cubic capacity rules to effectively counter very light, fluffy shipments that take up more than their fair share of a trailer. In most cases, if a shipment consumes 750 cubic feet of space or more, and the shipment has freight density of less than 6 pounds per cubic foot, it’s not paying its fair share. In these cases, carriers will often default to a higher freight classification with minimum weight and size rules and lower (or no) discounts. To save money on LTL shipping, make sure you fully understand the minimum cubic capacity of the carrier you choose and maximize that space. Maximizing your pallet space and increasing the density of your shipment is a great way to save on LTL shipping.
Consolidate orders
If it is possible, try to combine small LTL shipments into one larger shipment. A lot of times, multiple small shipments will be going to the same location daily. If these shipments are consolidated into one, rates will decrease and you will save money. It is vital to understand exactly when orders must be delivered because it makes it much easier and cost effective to combine orders that will be headed to the same location. An experienced 3PL partner can help you with a complete LTL freight analysis to determine if you have any consolidation or savings opportunities.
Use proper packaging
Most carriers have limited liability policies, so it is important to correctly package your shipments to avoid damages. Attaching freight to the pallet by using shrink-wrap or other protective wraps can help you avoid damages to your shipments. Also, be sure to make note of fragile shipments by adding labels or signs that are easily visible on the packaging. The condition of the package upon arrival is important to all customers. If your shipment is extremely valuable, you might also consider purchasing cargo insurance for added protection.
Determine the net cost
Focusing on the net cost of LTL shipments is the best way to save money on shipping. There are so many factors such as weight, height, distance, delivery time, and accessorial service options that become forgotten when choosing the best rate. Considering all of these costs and combining them into one final price will give a more accurate and precise net cost of your shipment. It is important to not get caught up in just reviewing the freight or discounted rates because a lot of times, there are additional fees and charges that will factor into the final cost.
Here’s the bottom line: If you have LTL shipping needs and want to ensure that you are not overpaying, then contact Logistics Plus today!
With an annual global revenue estimate of around $150M, Logistics Plus is not one the largest player in the $721B third-party logistics industry. However, we continue to be one of the most transparent and resourceful companies in the business. Case in point: The Logistics Plus Directory. We proudly showcase every one of our 400+ employees (to the extent we can keep up) on our website in our People Directory, and we provide most of our employees with email access and mobile phones to ensure 24/7/365 access when you need it (how many other 3PLs do that?). We also proudly feature all of our 50+ global offices on our website in our Locations Directory with interactive Google maps. Each location page provides a brief overview of the geography served along with local contact information.
Please feel free to reach out to any of our global locations or use our employee directory when you need to support. Click the circle on the left to access our Locations Directory and the circle on the right to access our People Directory.
The Logistics Plus directory is just another example of our Passion For Excellence!
If you’re new to LTL shipping, here’s a quick primer on the industry, its history, and some tips on how to get the most out of your LTL freight spend. The abbreviation “LTL” stands for “Less Than Truckload.” This refers to a shipment that does not require a full trailer to move. In practice, LTL shipments from multiple shippers are generally combined into a full (or near-full) trailer-load that will move in a pre-defined pickup and delivery network. An LTL shipment is first picked up by a “city driver” who makes his way from shipper to shipper until his trailer is full or his route is completed. Those shipments will be brought back to a local city terminal where they will be moved from the city operation to the “linehaul” (or highway) operation. A linehaul driver will then transport all of the shipments from the origin city to a final destination city (or first to an intermediary consolidation facility). Once at the destination terminal, shipments will be moved back into the city operation for final delivery. While that is an extremely simplified overview, it’s pretty much how it works in a nutshell.
Due to the high barrier to entry (building an LTL network takes significant capital investment), a relatively small number of LTL carriers dominate this segment of the transportation industry. In fact, according to SJ Consulting, the top 25 LTL carriers comprise over 90% of the industry. Recent industry consolidation continues to support larger, growing market shares for the biggest LTL carriers such as FedEx Freight, XPO, YRC Freight, Old Dominion, UPS Freight, Estes, and a number of regional players.
The History of LTL Shipping
The U.S. government started regulating the trucking industry in 1935 under the direction of the Interstate Commerce Commission (ICC). The Motor Carrier Act of 1935 required new truckers to seek a “certificate of public convenience and necessity” from the ICC. The act required motor carriers to file their rate tariffs with the ICC 30 days before they became effective. The tariff could then be subject to a challenge by another carrier or railroad which could lead to a suspension of the tariff until an investigation could be carried out. In 1948, the government allowed carriers to fix prices and allowed them to be exempt from any antitrust legislation. For the next 30 years competition was virtually extinguished as the ICC denied applications from new carriers. The industry began to change in the early 1970’s when new administrations implemented a number of acts to reduce price fixing and collective vendor pricing. The final part of the deregulation was the Motor Carrier Act of 1980 which resulted in intense price competition and lower profit margins for the industry; with thousands of new low-cost, non-union carriers entering the market. After 1980, average LTL rates would continue to fall while the number of LTL carriers doubled between 1980 and 1990.
Today, the $35 billion LTL industry remains an important, but small component of the $700 billion total U.S. freight transportation pie; but it is seen as a vital component for many shippers’ supply chains – particularly those based on just-in-time and continuous replenishment systems. The American Trucking Association (ATA) regularly publishes reports on the state of the trucking industry that includes some of these statistics.
Quick Tips for New LTL Shippers
If you’re new to LTL freight shipping and trying to develop a good approach to getting the most out of your freight spend, here are a few tips to get you started.
Fill out your bill of lading correctly. A bill of lading (BOL) works as a receipt for the goods shipped, indicates contracted details between carrier and shipper, defines a consignee, and functions as a document of title. An accurate BOL informs the carrier how the shipment should be handled and billed. Be sure to place the correct NMFC item number and freight classification for your shipment on your BOL.
Know your freight class. LTL shipments are based on a system of freight classifications (freight class). There are 18 different freight classes; lower classes represent dense freight that isn’t easily damaged and can be handled easily. Higher freight classes represent lighter, less dense freight that is fragile and difficult to move. Higher classes equate to higher rates. Incorrectly classifying your freight can lead to “re-classification” fees.
Avoid unnecessary accessorial fees.Accessorial fees compensate carriers for additional services and equipment beyond their normal shipping procedures. Accessorial fees can be added if the shipper misrepresents a shipment’s freight classification, if a driver is turned away from a delivery or the consignee is not present, if the BOL is not filled out correctly, and in many other scenarios.
Use pallets when possible. Pallets make shipments easier for carriers to move. Use pallets when pieces fit squarely within the pallet’s edges, height and width of a shipment are similar, and if the individual pieces in a load exceed 100 pounds. Also keep in mind that the weight of the pallet should be included in the weight you show on your BOL.
It’s all about the net price. To determine your net LTL price, several factors come into play: origin and destination, weight, freight class, density, base rates, discounts, minimum charges, and accessorial fees. Oftentimes shippers focus on the amount of discount they are receiving, but discounts can be misleading because there are many different base rates upon which the discounts may apply. That’s why it is important to focus on only the net price, and not the discount.
Work with a 3PL partner that has LTL expertise. A good 3PL partner with experience managing LTL services and carriers can help shippers properly classify their products, complete accurate bills of lading, avoid accessorial fees, negotiate great rates, and go-to-bat when issues arise. The freight experts at Logistics Plus have been managing LTL shipping for companies, large and small, for over 20 years. We’d love to help you manage your LTL shipping too!
Logistics can be maddening at times, and the month of March is no exception. However, since March is the official month of madness, we thought we’d provide a few tips for shippers to consider to avoid some of the madness that often comes with freight transportation and logistics.
Packaging your freight properly. Poorly packaged freight increases the risk that your shipments will get damaged; and many carriers are starting to decline damage claims when improper packaging is the culprit. Review your packaging processes – and enlist help if needed – to reduce your risk and avoid these unnecessary time and money costs.
Inaccurately weighing your shipment. Some companies don’t have the proper equipment to accurately weigh shipments which leads to inaccurate weight estimates on your bill of lading (BOL). Most carriers now have certified scales at their terminals, and will re-weigh shipments and add on a fee to your invoice if the original estimate was inaccurate. Re-weighing fees add up quickly, so purchasing a proper, certified scale can save money in the long-run.
Inaccurately classifying your freight. When it comes to LTL freight, shipping at a lower freight class will be less expensive than shipping at a higher freight class. If you don’t know the NMFC item number for your product – and place that item number on your BOL – you run the risk of a carrier re-classifying your shipment and adding on an additional fee. Freight class is an important factor in how LTL carriers determine their freight charges, so they spend a lot of time and effort on analyzing and re-classifying freight. So if you don’t know the proper freight class for your shipment, make sure you ask an expert ahead of time.
Not knowing to whom you’re shipping. Shippers must know the consignee’s capability to receive a freight shipment. For example, if the consignee doesn’t have a receiving dock, then a lift-gate might be required for the carrier to effectively deliver your shipment. If you don’t specify this in advance, you run the risk of redelivery fees if the carrier must make an extra trip to provide the final delivery. The same fees might apply in cases where the consignee has only limited receiving times, in which case an advance appointment might be appropriate. So knowing where your freight is going, and assigning the proper services to your shipment in advance, are important factors in maximizing efficiency.
Relying on a single carrier. Some shippers rely on only one (or a couple) carriers for all of their transportation needs. Relying on one carrier alone to handle all of your shipping can lead to sub-optimization and end up costing you more time and money. Generally speaking, regional carriers are faster and less costly on short-haul moves, while national carriers perform much better at long-haul and coast-to-coast deliveries. Working with multiple carriers – or a 3PL that has multiple carrier contracts – allows you to optimize your deliveries using the right carriers.
Not inspecting freight upon delivery. Consignees should always inspect the freight they receive before they sign a carrier’s delivery receipt. Any damages or abnormalities should be noted on the delivery receipt. If a damage notation is omitted on the delivery receipt, it will be difficult to recover any costs with a damage claim. When in doubt, make a note on the delivery receipt that there are possible damages pending a more thorough inspection.
Using incorrect shipping or receiving addresses. This remains one of the most common shipping mistakes. Inaccurate origin and destination address information can lead to missed pickups and delayed deliveries – often times with additional re-delivery or re-consignment fees. Even one wrong ZIP code can result in a time-consuming effort to track down a shipment. So take time to review your address information when completing a bill of lading – it will save many headaches down the road.
Not using an experienced, reputable 3PL partner. Okay, this tip is admittedly a little self-serving. However, an experienced and reputable 3PL can help with you with many of the items above. They will also have the leverage to go-to-bat for you when things go wrong – and we know at some point, things always do. A good 3PL can alleviate much of the “madness” that goes into logistics. So enjoy the fun “madness” that comes with “March”; and leave the “madness” of logistics to a partner like Logistics Plus.
Each year, U.S. companies export well over 2 trillion dollars of goods and services. If you want your business to get in on the action, it’s important to figure out the best way to expand to new markets. The U.S. Commercial Service has developed some exporting resources and a comprehensive video collection to help small and medium businesses become better equipped to enter the world of exporting. The first video in the series is shown below. This same video, and subsequent videos, can be found online at www.export.gov/How-to-Export.
With over 20 years of exporting expertise as a full-service international forwarding and logistics company, Logistics Plus provides exporters with a variety of global trade solutions, including:
Additionally, we have a variety of tips and resources available in the News & Notes section of our website. Simply click the image below to view a collection of all our export-related articles.
Of course, to really experience our “Passion for Excellence,” feel free to contact us directly using the button below, or by emailing quotes@logisticsplus.com. We’d love to help you with any or all of your exporting needs!
Today, the $35 billion LTL industry remains an important, but small component of the $700 billion total U.S. freight transportation pie; but it is seen as a vital component for many shippers’ supply chains – particularly those based on just-in-time and continuous replenishment systems. The 
