Deciding how to ship products can be challenging. There are many options, and there are many carriers from which to choose. When making this decision, keep in mind that all companies and carriers are not created equal, and a little research can save money in the long run.
Less-Than-Truckload (LTL) shipping is for shipments that are too large to be shipped as parcel but not large enough to fill up a truck. There is often a discount given by LTL carriers, beginning at 150 pounds on a pallet and going up to 6,000 pounds on six pallets. Large shipments can be sent via LTL shipping, but do not get the discount that light loads receive.
Another benefit in choosing LTL shipping is that many carriers will allow companies to combine their shipment with other companies’ shipments. The freight is transported through a hub-and-spoke system, which means it is passed between trucks and freight centers until it arrives at its destination.
Although there are many benefits to this method of shipping freight, it can be difficult to understand how LTL rates are charged. There are several factors that determine the rate, and depending on those factors, the total shipping cost may be significantly affected.
What you should know about LTL rates
All LTL carriers set their own independent base rates. The base rate of the LTL is quoted per 100 pounds, and there are several Weight Brackets. The rate calculation depends on the following factors: Weight, Origin and Destination, Total Distance, and Freight Classification.
Weight: The more a shipment weighs, the LESS it will cost per hundred pounds. As the weight of a shipment approaches the next higher Weight Bracket, the carrier will make the calculation to see if adding a small amount of weight to the actual shipping weight and moving the shipment into the next Weight Bracket may, in fact, reduce the total cost of the shipment. If so, that is what he will do.
Origin and Destination: Many Zip Codes are served directly by each carrier. However, if the destination Zip Code is outside the carrier’s region, the shipment will be transferred to a different carrier, which could lead to a higher cost.
Total Distance: As expected, in general, the further the shipment has to travel, the higher the base rate will be.
Freight Classification: In freight classifications, the higher the class (the larger the number), the higher the base rate will be. The factors which make up each classification are: Stowability, Handling and Liability, and Density of the product. The lower the number, the lower the risk for the freight.
As with any purchase, one should understand the hidden factors and benefits. LTL shipping is a good option for loads of an in-between size. Understanding how base rates are calculated make it easier to decide which path to choose.