Posted On February 14, 2022
The world of less-than-truckload (or LTL) freight shipping looks drastically different than it did a decade or two ago.
In recent years, national carriers have dictated freight charges and availability, doing away with competitive rates, and services that were once guaranteed have been downgraded to uncertainties. As a result, supply chain managers are left with higher costs and more boxes to check to ensure each shipment is delivered on-time and on-budget.
But as more challenges emerge, so do solutions. Keep reading to see the most common LTL shipping challenges that shippers face, and our advice for tackling them.
Knowing when to choose LTL shipping vs. full truckload shipping.
This might seem easy—do you have enough for a truckload shipment or not? But for many companies, the answer isn’t so simple. With all the various carriers, lanes and packaging options, the choices for shipping small to mid-size goods are seemingly endless.
The solution: Technology can play a major role in determining the best way to ship freight. Your TMS (or transportation management system) should be able to pull current carrier rates and evaluate shipment dimensions and destinations to find the best shipping method, including truckload freight and less-than-truckload freight.
Ever-changing accessorial fees for LTL shipments.
The base price for freight shipping is important, but accessorial fees—or extra charges beyond pickup and delivery—can make or break the profitability of a shipment. Various carriers have their own rules for different fees, which makes freight shipping complicated. Over the last decade, LTL carriers have narrowed the guidelines and increased fees, making LTL freight shipping even more complex.
For example, LTL carriers restrict the length of shipments. Ten years ago, the standard maximum length hovered between 12 and 14 feet. Anything over that would be hit with an overlength fee. Today, the maximum length has shrunk to around 8 feet and the associated costs for going over have increased, from around $100 up to $1,000, depending on the carrier and length of the freight.
Detention fees are also on the rise. In addition to carriers having unique time limits for loading or unloading a truck (one LTL carrier might allow for 20 minutes for all shipments while another allows for 30 minutes for shipments over a certain weight), whether to enforce the limits is up to the driver’s discretion.
The solution: Being efficient on the dock during loading and unloading helps minimize detention fees and other accessorial charges. And a logistics partner that does frequent invoice audits can monitor shipments and fees to ensure each shipment is being sent in the most cost-effective manner.
Errors with LTL freight on-time pickup and delivery times.
In the midst of the supply chain crisis of 2021, LTL carriers stopped honoring their on-time delivery guarantees. For shippers with time-sensitive freight or shippers who rely on specific pickup and delivery times being met, this can spell disaster.
The solution: Be proactive. Whenever possible, submit LTL shipping pickups to the carrier the day before the pickup needs to happen. This allows carriers to set their schedule when they arrive at work the next morning. Adding a day or two of buffer to scheduled transit times can also help in case things get off track.
LTL freight that’s improperly packaged.
LTL shipping gets even harder when the freight isn’t packed appropriately. While skids and pallets cost just a few bucks, every cent matters when it comes to shipping costs in today’s market. Carriers and warehouse workers typically prefer to work with freight that can be moved by forklift. LTL freight that requires them to get off the forklift and move another way is more likely to be damaged and more likely to be hit with additional fees.
The solution: Whenever possible, pack LTL shipments on a pallet or skid (or inside a crate) to prevent damage and avoid fees. But sometimes damage is unavoidable, which leads us to another common LTL shipping challenge…
Not understanding the insurance and liability for your LTL freight shipping.
When freight does get damaged during LTL shipping, insurance and liability come into play.
First, shippers need to understand the difference between insurance and liability. Liability is the maximum amount carriers will pay in the event freight is damaged (and the carrier is found to be at fault). Insurance can cover the entire cost of the freight being shipped, which is important when the cost of the freight is drastically higher than the carrier’s liability.
The solution: As a shipper, you need to understand the carrier’s liability schedule in relation to the value of your freight. For example, an LTL freight shipment might come with liability up to $10 per pound. If the value of your freight is $30 per pound, there’s a huge potential for loss that your company wouldn’t have covered.
Liability is often tied to LTL shipping rates, which in turn are tied to freight class. So if a carrier offers FAK, or Freight All Kinds, rates, a shipper might think they’re saving money because they’re avoiding higher freight classification. But FAK rates often come with minuscule liability rates. You get what you pay for, and in the case of FAK liability, you don’t get what you don’t pay for.
Choosing the wrong freight class.
LTL shipping rates are influenced by freight classification, or type of commodity being shipped. LTL shipments of high-tech electronics might have a more expensive freight class than, say, boxes of hard candy. Incorrectly classifying your freight leads to (you guessed it) accessorial fees and a bump to the accurate classification. We’ve even heard of shippers who have purposefully classified their freight incorrectly to try to save a buck when shipping LTL.
The solution: A shipper that only ever deals with a handful of SKUs probably doesn’t need to worry much about classification. But for other shippers with hundreds or thousands of SKUs, the right classification is vital. TMS technology like Pipeline can help ensure every shipment is being classified correctly before it leaves the dock.
Keeping costs low.
By now you’re probably well aware of the pricing challenges that come with LTL shipping. The current industry landscape isn’t helping things, but there are steps you can take to achieve cost savings for shipping LTL.
The solution: Rate shopping among various carriers is step number one in finding the most cost-effective LTL option. A TMS platform like Pipeline makes the process quick and easy.
When LTL freight shipping is costing more than it’s worth, there are other options. Consider alternate shipping methods like truckload shipping for oversized freight, consolidating multiple freight shipments to fit an entire truckload or creating separate shipments to be sent as parcels instead of LTL shipments.
LTL freight shipping via multiple carriers can also lower costs. For example, you could combine numerous parcels onto a pallet for an LTL shipment via FedEx. FedEx would transport the freight across the country before transferring the goods to the local post office, which would serve as the final mile carrier. It might sound more complicated but executing LTL freight this way can save a lot of money.
Lack of visibility with shipping LTL freight.
With so many LTL carrier options, all with different systems and varying levels of technical sophistication, trying to track your LTL freight can be difficult. And as we’ve mentioned before, visibility is essential for a successful global supply chain, from supporting customer service to decreasing inefficiency among employees.
The solution: Work with a third-party logistics partner to help you connect the dots on your shipments. The ideal partner will have both the technology capabilities and the manpower to be able to track shipments and communicate updates seamlessly, both for LTL freight and truckload freight.
And an extra piece of advice for your LTL freight shipping:
How your company interacts with a carrier can affect how successfully your company is able to ship LTL freight. If dock workers are consistently organized, on-schedule and easy to work with when a carrier arrives for pickup, you’ll more than likely have some wiggle room when it comes to detention fees and other charges. Working with your carrier, being flexible and not always looking for the cheapest option helps build rapport—something that can go a long way in a time of need.
Do you have a partner with the expertise and technology to successfully execute LTL freight and truckload shipments? Flat World’s LTL freight team helps companies across the country find the best LTL freight options for their unique needs. If you have questions or need help, contact us!