The Truth Behind LTL Rates

Less-Than-Truckload (LTL) freight classifies shipments that are too big to be sent as a parcel, but too small to fill an entire truckload.

To best accommodate these shipments, multiple shippers will share space on one truck while each paying for their own portion of the trailer. When considering what to charge each shipper, numerous factors come into play.

As a shipper, if you are guesstimating or missing specific information about your shipment as it relates to the following factors, it could lead to a much higher charge.

Being familiar with these 8 truths will help you control costs:

  1. Weight

Carriers must ensure the total weight is evenly distributed across the trailer and does not exceed any provincial or state laws regarding maximum weight. If a truck exceeds the weight limit, they could face fines and risk having their license suspended.

  1. Size

Carriers strive to optimize space while making sure no product is damaged. They must coordinate pricing based on how all of the individual shipments will be organized amongst each other inside the trailer.

  1. Freight Classification

In the United States, every piece of freight belongs to a certain class. There are 18 classifications determined by the National Motor Freight Classification (NMFC) system and they range from 50 to 500. Classification is based on a combination of density, value, stow-ability, handing and liability. Higher class freight is lighter and typically takes up more space, while lower class freight is more difficult to damage and easier to handle.  

  1. Distance & Lane

Generally speaking, the longer the shipment has to go, the higher the rates will be. Shipping to locations outside of major cities will also increase the cost of shipping. The origin and destination determine which lane the freight will travel. This impacts rates depending on the volume of freight that is regularly shipping to that destination. For example, even though the freight could be traveling a shorter distance, it won’t necessarily have a lower rate if it’s an unusual lane.

  1. Rating System

When shipping within Canada, centum weight or hundredweight (CWT) calculations are based on weight, classification, and route distance. Each LTL carrier has set a rate per 100 pounds of freight, but it’s good to know that carriers could modify this rate depending on their need for additional volume.

  1. Transit Time

How soon does your shipment need to get from A to B? The answer to that question will play a substantial role in your LTL rate. If you are operating within strict deadlines or the shipment requires air service, the cost will increase significantly.

  1. Minimums & Extra Charges

Due to the unpredictable nature of LTL freight, carriers set minimum charges to ensure they are able to ship packages of all sizes without losing money. In addition to shipping costs, carriers charge for anything beyond dock to dock / business to business. Accessorial charges include lift gate, residential pick up or delivery, inside delivery, white glove service, and delivery to limited access locations.

  1. Loyalty

Lastly, we speak from experience when we say LTL carriers offer better rates for high volume customers. This is why it’s important to consider partnering with a third party logistics (3PL) provider. Shipping with Radius gives you access to otherwise exclusive discounted rates. We’ve already gone ahead and built the relationship, while you sit back and reap the benefits of loyalty.

At Radius Logistics, we’re here to find the best LTL solutions for your shipping needs. We do the legwork to create the ultimate combination of rates and service to ensure your shipment is delivered on time.

Contact us today to discuss how we can help you reach your business goals!