This week I’d like to talk a bit about LTL freight. It's been a popular topic in some of my recent conversations with shippers, and I thought it would be a great way to kick off our new shipper newsletter with Commtrex!
Let’s focus on the basics. Less than Truck Load (LTL) is a mode of transportation selected by shippers who either do not have customer orders requiring Full Truck Load shipping (FTL) or don’t have enough orders going to one location. Oftentimes, the shippers using LTL are providing goods to retail environments ‘just in time' (JIT) for sale or stocking.
Carriers that provide LTL services are generally looking for 1-5 pallets with dimensions of 48 x 48 x 48 inches and weighing 1500 LBS on average. Common carriers and LTL carriers will take upwards of 10+ pallets to balance or fill their trucks on lanes they require.
Recently, conversations regarding LTL shipping tend to result in complaints over lost and/or damaged shipments, rising costs, and poor in-transit communication/updates. LTL shippers may feel like they’re at the mercy of today’s LTL market in relation to availability, unpredictability, and reliability.
Let’s explain a bit about why shipments are so often difficult to track, along with the potential of lost or damaged freight when shipping LTL. Essentially, national LTL carriers utilize several terminals, trucks, and staff to manage freight movement. Your LTL freight will likely be transloaded multiple times, handled by several different trucks, and managed by several different people to complete the actual delivery. The margin for human error is high, plus loading and unloading increase the risk of damage. Even worse, tracking is difficult since the carrier may not have updates as frequently as ‘good customer service’ should demand. The result is muddy water and a ‘cross your fingers and hope your freight is okay’ type of situation--especially on new LTL routes with new carriers.
Below is some of my advice for an LTL shipper to consider when looking for a broker or carrier to handle their freight.
In general:
- Prep your shipment for more handling! Consider how you package your products and what might better protect them during their journey.
- Consider the pros and cons of using a broker or going carrier direct. I always recommend using a broker for LTL over trying to vet a carrier yourself.
- Be wary of the lowest rate. If a rate comes in far lower than other bids, it’s important to ask why and at what cost that comes to quality service and reliability.
If you’re using a broker (my recommendation):
- Ensure the broker has a stringent carrier onboarding process and that they have a track record of success when handling LTL. Plus, ask about any similar LTL freight they currently broker.
- Ensure the broker has appropriate cargo insurance in place and inquire about their process of handling claims to ensure there is a compliance team in place to manage any potential issues.
- Ensure the broker has a full understanding of Class System in the USA and CWT in Canada, and ask about experience with your class of goods.
If you’re going carrier direct:
- Ensure they are the ‘Right Fit’. Understand what type of LTL they specialize in. Is the freight similar to yours? Is it moving on a similar route? Try to get a feel for if the carrier is doing something new with their business or if they have a track record for success. (If you go with a broker, they will be doing this vetting for you!)
- Pay attention to the level of service you require. If your goods are high value or delicate, then shopping for the cheapest rate is likely a bad idea!
- Can the carrier handle increases/fluctuations in volume?
- Are they able to maintain moving your shipments long-term?
At the end of the day, it all comes down to VETTING. Your broker should be appropriately evaluating your carriers, and you should be carefully considering your broker(s). Don’t be afraid to ask questions and dig into their history. The best companies will offer references and testimonials.
See you next week!
Bill Robinson
