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We are committed to creating a more transparent logistics industry, and this means sharing our expertise. Not just through the products that break down the barriers between players in the supply chain, but also by sharing the wealth of experience that our subject matter experts have gained these last seven years and continue to develop each day. This is Learn With Loadsmart.
Less May Be More When Booking Your Next Freight Shipment With Tommy Montbriand, SMB Marketing Manager At Loadsmart
Choosing which mode to route a shipment is more complicated than most companies realize. Rates, the availability of trucks, and delivery times are all things companies need to consider. The problem is all three factors can vary widely and change which mode is best in a given situation.
Companies’ decision-making processes for routing shipments frequently aren’t adaptable or flexible enough to overcome these market dynamics. This means many shipping departments are routing shipments based on old information. And as a result, they are choosing shipping modes and carriers that are more expensive or provide slower service time than what is needed.
There’s a default approach some companies take for routing shipments based on mode or the carrier who always handled similar loads in the past—because ‘that’s how it’s always been done.’ The market has been tough the last year, so this is understandable. And sometimes, just getting freight off the dock is the only goal.
But, with rates changing so often and limited available capacity, that can be an expensive mistake. Assuming that a mode is the best choice can lead to problems. We’ll cover more about costs in a moment, but other differences between FTL and LTL should be considered.
For example, LTL provides longer transit times than a FTL carrier. Generally, FTL will be faster than LTL when it comes to transit time. The longer the distance traveled, the more this will hold true.
At the same time, LTL can provide greater schedule reliability because of how LTL networks operate. But with those networks comes additional handling, making damages more likely. As with most routing decisions, there is always a trade-off.
When considering mode, at a certain point as shipment size increases, FTL becomes less expensive than LTL overall. But, the range of where companies should look at both options is much larger than most companies assume. Pallet counts of 12 or more and total shipments weights of 15,000 lbs. can still sometimes be more cheaply routed LTL than paying for a whole truck. This is why checking to make sure what’s best is so important.
And by the way, mode selection can also be important for relatively small shipments. Large, multi-package parcel shipments can often be routed more cheaply with LTL. LTL can become a better option as total shipment weight approaches 200 lbs. (regardless of the number of cartons in the order). The major small package carriers have been very aggressive with adding new fees and surcharges, and LTL carriers recognize that as an opportunity. So, it’s always worth comparing rates.
Shippers should note that if the required due date is not attainable with the lowest cost mode, it can be worthwhile to ask for another day or two. You’d be amazed how often due dates can be flexible and the amount of unnecessary costs companies could have avoided simply by asking.
Don’t Assume Anything
In the end, most routing decisions will come down to cost. But remember, there are no hard and fast rules for when FTL or LTL is better for a given situation—and the market is very volatile right now. This means accessing the most current and competitive rates is something companies should be doing on a load-by-load basis. Having a tool like www.loadsmart.com is a way to consider all of the cost and mode options in one place.
Transforming the future of freight, Loadsmart leverages artificial intelligence, machine learning and strategic partnerships to automate how freight is priced, booked and shipped. Pairing advanced technologies with deep-seated industry expertise, Loadsmart fuels growth, simplifies operational complexity and bolsters efficiency for carriers and shippers alike. For more information, please visit: https://loadsmart.com.