WHAT IS LTL FREIGHT? A Guidebook for Beginners

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1 WHAT IS LTL FREIGHT? A Guidebook for Beginners

2 TABLE OF CONTENTS 1 What is LTL Freight? 2 Different Types of LTL Shipments 3 How Does an LTL Shipment Move from Origin to Destination? 4 LTL Transit Times 5 What Determines the Cost of LTL Freight? 6 How Can I Get a Discount or Deal When Shipping LTL? 7 What is an Accessorial Fee? 8 How Can I Get a Quote for the Cost of Shipping My LTL Freight? 9 Glossary 10 Other Resources

3 WHAT IS LTL FREIGHT? Sometimes, a shipment is simply too large to send with a parcel provider (like the US Postal Service), but much too small to fill an entire 48- or 53-foot standard truck trailer. More often than not, the cost of moving this shipment as a parcel or truckload shipment would be astronomical, simply because it s not the ideal size for those providers. This is where LTL shipping comes in! LTL is an industry acronym that stands for less-thantruckload and refers to those shipments that, quite literally, are less than a truckload - they do not require all the space provided in a standard truck trailer because of their size and/or weight. Using an LTL carrier is far more cost-effective than using a truckload carrier for shipments which do not completely fill a trailer. A good rule of thumb: Shipments that weigh less than 10,000 lbs or consist of 1 to 6 pallets can be considered a great fit for LTL services!

4 THE FIVE TYPES OF LTL SHIPMENTS Standard LTL Shipment Traditional LTL is considered to be a shipment of freight that is 1-6 pallets (or tendered in loose pieces) and weighs between 500lbs and 5,000lbs. Larger LTL Shipment Larger shipments of more than 6 pallets (or weights above 5,000lbs) that are still too small for truckload may sometimes be referred to as a volume LTL shipment. Transit time is normally longer than standard LTL, since the shipment can only move as space and capacity becomes available. Refrigerated LTL Shipment A shipment that requires temperature controlled equipment is a refrigerated ( reefer ) LTL shipment. There are a limited number of specialized carriers that have the equipment and network to handle shipments that require temperature control.

5 Expedited LTL Shipment When a shipment is rushed and has to deliver on a specific date or time, faster than standard delivery, this comes at a premium cost. Availability may be limited and requires specific details about the shipment in order to set up. Not every provider offers this service. Guaranteed LTL Shipment For a small cost, you can pay the LTL carrier to guarantee the delivery of your shipment on the standard delivery date by a certain time. If the shipment is not delivered by that date and time, most carriers will completely refund the cost of your shipment.

6 HOW DOES AN LTL SHIPMENT MOVE FROM ORIGIN TO DESTINATION? Multiple shipments in one trailer An LTL shipment is handled much differently (and more frequently) than a truckload shipment. Generally, a truckload shipment is picked up and delivered by the same driver, in the same trailer, from Point A to Point B. An LTL shipment will almost always be driven by multiple drivers and loaded from one trailer to another as it makes its way from origin to destination. LTL carriers combine shipments from multiple customers that are moving the same direction or headed to the same geographic delivery area to optimize the usage of their equipment and drivers. Loading a trailer with as much weight as possible is the key for LTL carriers to operate efficiently and turn a profit. Many different LTL shipments combine to fill one trailer.

7 Terminals, pickup, and delivery Pickup and delivery drivers usually have set geographic routes or territories they pick up and deliver to each day. Deliveries are generally made in the mornings, and pickups are made in the afternoons. Once the pickup driver has filled the trailer or completed the assigned route, he returns to the origin terminal (generally, the closest terminal to where the shipment picks up). At this terminal, the driver s vehicle is unloaded. Those shipments are then combined with shipments from other pickup routes and loaded onto a trailer which will transport the freight to a distribution center or to the delivering terminal. Shipments traveling cross country may be routed through multiple distribution centers. When the trailer reaches the delivering terminal, the freight is unloaded from the trailer and reloaded onto different trailers for the local delivery routes.

8 LTL TRANSIT TIMES Compared to a truckload shipment, transit times for LTL freight shipments are longer because of the additional handlings. LTL transit times are set by the carrier based on that particular carrier s network configuration, meaning that the location of the carrier s terminals, their agents and interline partners will also affect transit times. Interline partners are smaller carriers that large LTL carriers have contracted to deliver to areas where they do not have trucks or terminals. Shipments picked up and delivered through the same freight terminal, or freight that is sorted only once while in transit, will likely be delivered on the next business day after pickup. Multiple sorts and transfers of the freight will add days to the transit time. Delivery to interline points or remote areas will also add days to the transit time.

9 WHAT DETERMINES THE COST OF SHIPPING MY LTL FREIGHT? LTL shipping costs are based on 4 variable factors: 1 The weight of the shipment 2 How much space the shipment occupies in a trailer 3 The distance the shipment is moving and what lane it s traveling (a lane is the commercial route from origin to destination.) Similar to truckload, pricing will vary depending on the lane for example, Chicago to Miami will have a different rate than Miami to Chicago. This is because where the LTL carriers want or need to bring their equipment is a factor. 4 The NMFC freight classification of the product being shipped. All commodities have a classification assigned by the National Motor Freight Classification (NMFC). There are 18 classes, ranging from class 50 through class 500. The higher the class, the higher the cost. If you aren t aware of your freight class, your LTL provider can help you determine it before providing a shipping rate.

10 HOW CAN I GET A DISCOUNT OR DEAL WHEN SHIPPING MY LTL FREIGHT? FAK (Freight All Kinds) If you ship multiple commodities at different freight classes, you can negotiate a FAK in order to ship everything together at the same class. This way, you don t have to figure out the NMFC number associated with each item you ship, and you end up saving money on the higher class items. For example, if you ship items at class 70 and other items at class 200, you may want to negotiate a FAK of 100. You could see freight savings, the benefit of a standardized freight cost for multiple products and commodities, and protection from future changes to the classification of your commodities. Working with a freight broker or 3PL A freight broker or 3PL, like Trinity Logistics, will provide cost savings compared to working directly with LTL carriers. Due to the high volume that all our customers ship combined, we have contracted rates (also referred to blanket pricing ) with dozens of LTL carriers that are much lower than what you would pay when booking a shipment with the LTL carrier directly. Especially when you are first starting out with LTL shipping, you can save a lot of money this way.

11 WHAT IS AN ACCESSORIAL FEE? Similar to truckload shipping, LTL carriers have accessorial or extra services they can provide. Charges for these services will be added to the bill in addition to the standard rate. Some examples of accessorial services: Liftgate pickup or delivery (if there is no dock, a liftgate is required) Over-length handling Inside pickup and delivery Residential delivery Arrival notification Truck ordered but not used Reweighing or inspection (can happen if your freight is marked with the wrong weight or class) LTL carriers also assess a fuel surcharge that fluctuates based on the Department of Energy diesel fuel index.

12 HOW CAN I GET A QUOTE FOR THE COST OF SHIPPING MY LTL FREIGHT? To receive an accurate quote, refer to this handy checklist and be sure to send your LTL shipping provider all of the following information: The number of pallets The total weight of the shipment The pallet dimensions (L x W x H) Whether or not the pallets are stackable The origin zip code and delivery zip code The type of goods you are shipping and how they are packaged The freight class (if you know it if not, the LTL provider can determine this) Any known accessorials (for example, if you will need a liftgate at pickup or delivery, if it is delivering to a residence, etc.) If you have an LTL shipment you need to get a quote for, we can provide you with one! As a third party logistics provider, we have contracts with multiple LTL carriers. Get a better deal on your LTL shipments by taking advantage of our contracted rates fill out our easy online quote form!

13 GLOSSARY Accessorial: An extra fee charged by the LTL carrier for additional services rendered. See page 11. Blanket rates: Lower, contracted rates you can obtain from LTL carriers if you have enough shipping volume. See page 10. Commodity: The type of goods you are shipping. FAK: Stands for freight all kinds and refers to a negotiated LTL rate based on the combined freight class of multiple commodities. See page 10.? Freight class: The NMFC classification of your LTL shipment; this has an impact on the shipping cost. See page. Interline: When multiple LTL carriers are used to bring your shipment from origin to destination. Lane: The commercial route between the origin and the destination of your shipment. For example, Miami to Chicago is a great lane for this carrier. National Motor Freight Transportation Association: The organization who puts together the NMFC (National Motor Freight Classification) guidelines.

14 National Motor Freight Classification: The guidelines that determine the freight class of your shipment. NMFC number: Different from freight class, this is a very specific number that corresponds to your commodity and how it is packaged. This number is used to determine your freight class. Pallet: A flat platform, typically made out of wood or plastic, that your shipment is placed upon (and usually shrink-wrapped to). This makes your shipment easier to lift, transport, and stack. Volume LTL: A larger LTL shipment that is more than 6 pallets or 5,000lbs (but less than 10,000lbs); takes up part of a trailer, but not all of it. Terminal: Where LTL carriers load and unload shipments for pickup or delivery.

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