How to Navigate Today’s Less Than Truckload (LTL) Market
In a perfect world, consumers would be on a constant purchasing frenzy and every company would receive orders for Full Truckload (FTL) quantities. However, with consumer preferences becoming more dynamic, product lines becoming more diverse, lead times shrinking and retailers working on Just-In-Time (JIT) inventories, Less Than Truckload (LTL) shipping is in higher demand than ever. Frequent smaller shipments to multiple locations are quickly becoming the norm. FTL is simple; your shipment volume is large enough to warrant booking an entire truck for the long haul, so you pay the full price for the route. LTL is a bit more complex with multiple variables factoring into the pricing and planning, which vary dramatically by carrier. These are a few key tips for navigating today’s LTL market:
Key Point # 1: Know your freight class. This prevents additional charges such as re-classification fees and different rates being applied to the shipment from what you were quoted and expected. Freight class is based on your commodity’s density, value and NMFC (National Motor Freight Classification) Code. With LTL you are sharing the costs of the trailer with other shippers, so space utilization is the highest priority. The denser your product is the lower your costs will be, because your product will occupy less space and may be stackable. You can utilize our freight class calculator to help determine your freight class based on its density (Total Weight divided by Total Cubic Feet of the shipment).
Key Point # 2: Make sure you provide all relevant and accurate information at the time of quoting. This prevents additional charges from coming into play such as re-weigh fees, appointment scheduling charges, special service requirements and other unanticipated charges. Your transportation provider can only develop pricing based on the information you provide, so don’t be surprised if inaccurate information leads to additional charges.
Key Point # 3: Know the capabilities of your service provider. Not all LTL companies are the same, nor do they all service the same points, so before tendering a shipment to a carrier, make sure it’s within their wheelhouse. For example, if you’re concerned with retailer and distributor chargebacks, consider utilizing a service provider that focuses on compliance.
Key Point # 4: Make the process easier for the carrier. Being respectful of the driver and their time is one of the most important things that can be done in today’s market with limited capacity. This will also make it easier for you to build up your carrier network and utilize reliable carriers repeatedly. In this market, you need to make sure that carriers want to work with you.
The LTL capacity crunch is showing no signs of letting up anytime soon. To ensure that you have transportation options for your freight, you need to be proactive and strategic in your relationships with reliable transportation partners. Are you tired of not knowing what you’ll be charged, whether your LTL provider will even show up or managing too many carrier relationships? Have a conversation with us today.