The US transportation system moves nearly 50 million tons of freight every single day. That is a lot of freight. You have probably seen freight in transit, while commuting to work or taking a roadtrip. If you have ever needed to hire a trucking company to transport something for your business, you may remember the acronyms TL and LTL. What do these acronyms stand for, what do they mean in the freight industry, and what do they mean for your company? Keep reading to learn more!
TL vs. LTL Shipments
These acronyms refer to two of the most common freight load options in the transportation industry. Both options utilize full-size tractor trailors, but they utilize the space differently. Read more about each one below.
TL: Full Truckload
TL stands for full truckload. TL means that you are shipping enough freight to fill an entire truck. When organizing a TL shipment, the company may not actually have enough freight to fill the entire truck. Rather, the company may choose to pay for full truckload shipping to ensure that they are the only ones using that truck for freight. It also ensures that their freight will move from point A to point B with no stops.
Full truckloads experience much less handling than truckloads that are not full. The shipping company loads the freight, closes the trailer, and the truck is not opened again until it has reached its destination. This can result in less damage to the freight upon delivery.
LTL: Less than Truckload
LTL stands for less than truckload. LTL means that the freight you are shipping does not fill an entire truck. Because a company’s freight does not fill the truck, LTL shipments contain a combination of several companies’ freight. Unlike TL shipments, LTL shipments typically involve several pit stops before arriving at their final destination.
LTL shipments account for 10% of the overall trucking revenue.
Because they do not go straight from their origin to their destination, LTL shipments undergo much more handling than TL shipments. Trucks might be unloaded into a warehouse and then reloaded, or freight may be rearranged when new cargo is added. For this reason, it is critical to properly pack all freight before loading it on a truck. (This is true for both TL and LTL shipping, but take extra precaution with LTL shipments.)
TL Shipping Rates
The cost of TL loads are dependent on the current market, and they fluctuate depending on the time of year, day of week, etc. Carriers can set their own rates, and you will find that TL shipping rates vary greatly from carrier to carrier. Be sure to request quotes from multiple carriers before choosing one.
LTL Shipping Rates
LTL loads typically cost less than TL loads. Unlike TL shipping rates, LTL shipping rates are more standardized. The National Motor Freight Traffic Association established specific guidelines for pricing LTL shipments. The guidelines highlight a variety of factors that impact the shipping rates of LTL loads, including service fees, fuel surcharge, distance, and the class and weight of the freight.
Additional Service Fees
Carriers can charge service fees for a multitude of things, such as hazardous material, residential pickup or delivery, trade show pickup or delivery, excessive length, inside pickup, liftgate pickup, and limited access delivery. They might also charge additional service fees if you request to be notified before delivery or if your freight needs to be held at a terminal. Be sure that all service fees are clearly explained before accepting a quote. As you can imagine, these fees can add up and make your load more expensive than you anticipated.
Fuel is a carrier’s second largest expense, after truck purchases. To offset the cost of fuel, carriers add a fuel surcharge to shipments. Carriers have the freedom to set their own rates and change them at any time. The fuel rate will be included in your quote, and it will not change once you accept the quote. Because the price of gas fluctuates so frequently, carriers update fuel surcharges often. LTL shipments usually have much higher fuel surcharges than TL shipments.
The farther a truck is transporting freight, the more expensive it will be. Longer distances require more fuel, labor equipment, and more.
Class of Freight
There are 18 different freight classes, categorized by density, handling requirements, liability, and a few other factors. The classes are numbered from 50 to 500–the higher the number, the more expensive it is to ship. Contrary to what one might assume, higher classes usually contain lighter shipments. Lighter items can be harder to ship, due to their needed more careful handling.
Weight of Freight
Weight does play a factor in LTL shipments. Carriers typically set base rates for weight ranges. For example, they might have a certain base rate for shipments between 0 and 499 pounds. That base rate will usually decrease as the weight increases and companies meet the next weight break.
Full Truckload (TL) Quick Facts
- TL is sometimes referred to as FTL (full truckload) or OTR (over the road).
- A full truckload is anywhere from 48 to 53 feet long.
- A full truckload can weigh up to 43,000 pounds.
- A full truckload can accommodate up to 48 standard pallets.
- TL shipments contain freight from one company.
- Companies can schedule firm delivery dates/times with TL shipments.
Less than Truckload (LTL) Quick Facts
- LTL shipments contain freight from multiple companies.
- A less than truckload shipment weighs between 150 and 15,000 pounds.
- A less than truckload shipment can accommodate less than 12 standard pallets.
- LTL is typically more cost-effective than TL.
- Delivery dates/times are not guaranteed with LTL shipments.
- LTL shipments account for 10% of overall trucking revenue.
Choosing TL or LTL
TL and LTL shipping options both have pros and cons. TL shipments can arrive to their final destination quicker than LTLs, but at a steeper cost. LTL shipments are typically cheaper than TL, but they take longer to arrive. If your business ships freight frequently, or even occasionally, chances are, you will use a combination of these shipping options. TL might make more sense for time-sensitive shipments, whereas LTL might be a better option to consider when you have more flexibility.
If you are a business owner in Northern California and have any questions about full truckload or less than truckload shipments and how they might make sense for your business, our team is here to help. We are more than happy to answer your questions and advise you on what warehousing and distribution services would work best for your company. We can also help you weigh the pros and cons of each shipping option so you can be confident in your decision. Contact us today!