With expedited shipping services becoming increasingly the “norm,” industries have been forced to re-evaluate how they get products to consumers. It’s a competitive world and many retailers or manufacturers who can’t offer discounted, fast shipping are passed over for those who can. However, this also puts a strain on the shipping industry and shipping companies must make decisions about how to run their businesses as well. In 2013, trucking was responsible for almost 15 billion tons of cargo and according to the Bureau of Labor Statistics, by 2040, that’s expected to increase by almost four billion tons, which shows the increase in demand, partly due to the rise in e-commerce. From truckload shipping to LTL shipping services (less-than-truckload shipping), there are plenty of things to take into consideration when it comes to expedited trucking transportation.
Truckload Shipping Versus Less-Than-Truckload Shipping
Truckload shipping involves freight for bigger shipments that take up over half (or completely fill) a 48-53 foot trailer. These shipments all tend to be for the same thing There’s also less-than-truckload (commonly abbreviated to LTL), which deals with smaller freight (but not quite parcel carriers). The LTL market currently is around $35 billion but will likely continue to grow over the next few years.
The main difference here is that truckload shipping usually just delivers to one location, whereas LTL shipping may deliver to several. Since there’s many different items that can be shipped, truckload carriers may only ship one thing (like perishables, hazardous material, etc.).
However, there are advantages to each kind of shipping and depending on their needs, businesses may prefer one over the other, or use a mix of the two services.
What’s the Best Option For My Business?
Truckload shipping generally sports quicker transit times, since the shipment is only going to one location, instead of multiple, like with the LTL hub-and-spoke shipping model. Because they are headed to one location, the materials aren’t handled as much either, so it tends to be a safer type of shipment in terms of damage or accidents. And, consider truckload shipping like shipping in bulk. If you’re placing a big enough order that it takes up the entire space, it makes more sense to pay for one truckload, versus a few smaller LTL shipments.
On the other hand, LTL is favored by businesses who maybe aren’t shipping big orders and want to save on costs. Freight over 150 pounds can be shipped at a much more cost-efficient rate than a full trailer, since the model invites many different shippers to load their shipments into the truck before sending out the goods to be delivered. This way, you’re only paying for however much trailer space you need, versus paying for an entire trailer.
Furthermore, LTL can be more environmentally friendly as well. Many truckloads may get sent out only partially full, which means more emissions are being put out into the environment. LTL ensures that trucks are fuller when they depart, meaning there are fewer trucks on the road.
Tell Me More About the Freight Transportation System
Almost 12 million trucks, rail cars, vessels, and locomotives are involved in shipping goods throughout the transportation network. The Federal Motor Carrier Safety Administrations reports that almost six million commercial motor vehicle drivers are at work in the United States. The logistics and transportation industry is a big player in the United States, with their spending in 2015 at almost $1.5 trillion (almost 10% of annual gross domestic product).
The freight transportation system is also set to see more changes, as e-commerce continues to climb. Currently, the revenue from e-commerce is just under $425 billion and carriers are being made to adjust to the ever-present changes in the industry to ensure they’re staying competitive.
Machinery, electronics, and motorized vehicles are the three most valuable commodities that move through the freight transportation system, but nearly everything we purchase — whether it’s food, clothes, electronics, and more — comes through our transportation systems to get to us.
It’s worth checking out your shipping options to see what’s most cost-effective for your business, while also keeping in mind what your competitors are doing.