Everything About “Less-Than-Truckload” Trucking (How LTL Carrier Shipments Work to Quote & Calculate Shipping Freight)

LTL, or Less-Than-Truckload freight, is a type of freight transport that can also be referred to as Partial Shipment.

All LTL freight is transported in a dry van vehicle and can be found coming out of warehouses, wholesale distribution centers, manufacturers, and so on.

What are LTL loads and shipments?

A LTL shipment, or “LTL load”, can be classified as freight from a shipper that is between one and twelve pallets. Anything more than about twelve pallets would be the cost of operation more along the lines of a typical truckload.

How To Determine Freight Class for LTL

Freight Classes are classification numbers assigned to freight by carriers. There are 18 different classes and they were created by the National Motor Freight Traffic Association (NMFC). These classes are indicated using the numbers ranging from 50 to 500.

These classes are determined by (1) density, (2) stowability, (3) handling, and (4) liability.

Higher density usually translates to a lower class number. Which results in a lower cost per pound to ship. This is because the freight is heavier but takes up less space—leaving more room for potential additional loads for the driver.

Lower density translates to a higher class number. This results in a higher cost per pound to ship. This is lighter freight that takes up more space.

Good stowability allows for standard 48×40 pallets that lets shippers and carriers maximize truck space via stacking and organization.

Bad stowability is odd-shaped freight that doesn’t allow use of surrounding and/or overhead space. The unused space is calculated into shipping cost.

Easy or difficult handling refers to the ease of loading and unloading at a given location. This is determined by whether freight allows for use of tools or machinery, like a forklift, for efficient loading/unloading.

Liability considers possibility of freight being damaged, stolen, or perishing.

The factors above are considered in determining freight class. There are also more specific designations indicated by the NMFC Number.

Having an NMFC number makes it so that your freight doesn’t get reclassified in the bill of lading during transit. This can change cost and transit time. The NMFC number prevents these interruptions in transit by giving freight a hard specific description that isn’t up to negotiate.

How tall can a pallet be for LTL?

A standard pallet for LTL shipping stacks up to 84 inches. Depending on the carrier’s trailer, this can be increased up to 96 inches in height.

What are LTL Freight Carriers?

Across the United States, there is a huge network of trucks known as common carriers, that are similar to FedEx, UPS, and parcel carriers.

Once an LTL shipment is arranged and booked, a truck will pick up the LTL shipment. Since this truck is working “less-than-truckload” shipments, they will travel between different shipper locations to pick up a few pallets at a time.

Then these LTL carriers will take all these pallets to a hub location. From there the shipments will be redistributed across carriers and locations until they are sent on an LTL delivery to their final destination.

Unlike FTL freight, or “Full Truck Load”, which are picked up one place and delivered to another, an LTL shipment is being handled at multiple points before getting to its final destination.

How do LTL shipments work?

There are two main ways to move LTL freight:

Using a common carrier. These carriers specialize at LTL shipment. They include YRC, Old Dominion, Forward Air, XPO, ABG, AAAC, etc. All of them have different base rates based on their own market advantage; some are better at certain regions, safety quality, etc. These base rates are modified on a quarterly or yearly business within the company. If you do consistent business with a common carrier, you can attempt to negotiate from a more neutral base rate.

Dedicated carrier who takes partial shipment. For example, a broker can post an LTL freight as a partial on a freight board. This tells drivers that the shipment only takes up a certain amount of space in the dry van. If they can take the LTL load, the driver will talk to the broker/shipper and see if they can agree to make the shipment happen.

Using a dedicated carrier for partial shipment will charge a lower rate than a common carrier. The downside is that your LTL partial shipment is likely not a number one priority since the dedicated carrier is likely to have other shippers to pick up from and deliver as well.

How Do LTL Carriers Charge & Why LTL Freight Is So Expensive

Instead of being billed by the mile like regular FTL freight shipments, an LTL can charge rates on a per pallet basis.

When you consider the amount of extra labor that goes into making multiple LTL stops per day, it makes sense why LTL specialists make more money than your typical FTL driver.

What Are LTL Rates?

LTL carriers can charge on a per pallet rate based on the following factors:

• Where is the shipment going? Longer distances and other factors can increase rates.
• What is the freight class? This is determined by density of the shipment; heavy loads increase rates.

You can check out our CEO Trucking Business Training if you are looking to maximize profits and build up your LTL or FTL transport company. We’ve got these rate calculations down to a science so that you can learn how to optimize your loads and income.

How To Calculate & Quote LTL Freight Rates

Here’s are insights from an old trucker:

Multiply as if you were working with a FTL rate by 1.5x to make up for all the extra labor that comes with working on LTL freight.

Then when you make calculations to figure out how to charge per foot of space, input as if you are working with a 48ft flatbed (even if you have a 53ft).

So let’s say you’ve worked out the rate to $4,500. Divide this by 48 and you’ll get an idea of how much to charge per foot of space.

Finally, you can take advantage of heavy freight that takes up less space than lighter freight that takes up more space.

You do this by working out the weight of the freight against how much weight your commercial vehicle can handle.

A typical flat bed dry van CMV can take between 40,000 to 45,000lbs.

What are LTL and FTL?

Understand that LTL freight works differently than your typical FTL freight due to how rate is calculated.

The biggest difference between LTL and FTL is how pickups are arranged.

It’s more difficult with LTL since there are multiple pickup locations every day. An LTL carrier will need to adhere to a stricter schedule. This is because pickup appointments and deadlines demand more scheduled coordination than FTL.

LTL vs FTL vs PTL (Partial) Freight & Rates

Full Truck Load, or FTL, is where a single truck is loaded with freight from a single company. This is most efficient for large shipments of 20,000lbs to over 40,000lbs. These are delivered fastest since they travel directly to the delivery destination after pickup. This is most expensive since it uses the full truck. These are used by large companies and is good for time-sensitive and fragile cargo.

Rates typically based on a per mile basis.

Less-Than-Truckload, or LTL, is where is single truck is loaded with freight from multiple shippers. This is cost-effective for companies that ship 150lbs to 15,000lbs that take up about 10 pallet spaces or less than 12ft linearly. There is more handling since multiple destinations are involved, which increases risk of damage and results in slower transit times.

Rates typically based on distance, freight class, dimensions, and density.

Partial Freight, or PTL, is a shipment that would be between your typical FTL or LTL shipment. Partials have multiple shipments from different businesses and are typically up to 20 pallets with a weight between 8,000lbs and 20,000lbs at 12ft to 30ft linearly. These can save money since they don’t require freight class and handling fees. Since they require less stops, they are faster and reduce damage risks more than LTL shipments. PTL is uncommon and is for companies that don’t measure up to FTL levels of freight.

Rates typically based on distance, dimensions, and density.

What Are LTL Jobs?

LTL jobs are where carriers go to multiple shipper locations to pickup a few pallets-worth of freight until the truck is full. When this happens, the LTL carrier will drive the freight to a hub, which will redistribute all the freight to other locations until it’s time for the freight to be taken to its final delivery destination.

Does LTL pay more?

Yes, LTL pays more because there are less people specializing in LTL. This form of transport work is also the most complex and usually has the most labor and critical thinking involved. This is due to scheduling, managing freight space, and dealing with multiple shippers every day to get the job done.