By Anthony Liu
Traditionally, road transportation has two main shipping modes, they are less-than-truckload and full truckload. Recently, there is a new concept called shared truckload brought up by Flock Freight, a trucking startup in the US. What are they, and how are they differ? This blog aims to present the pros and cons of each trucking mode, and the comparison of them.
Less-Than-Truckload
Less-Than-Truckload freight (LTL) shipping is used for the transportation of small freight or when freight doesn’t require the use of an entire trailer. This shipping method can be used when freight weighs between 150 and 15,000 pounds. When shipping LTL, the shipper pays for the portion of a standard truck trailer their freight occupies, while other shippers and their shipments fill the unoccupied space. There are a number of benefits to shipping via LTL.
Benefits of LTL shipping:
Reduced cost (only pay for the portion of the trailer used.)
Increased security (prepackaged onto pallets before shipment)
Various shipping options are available (Liftgate, inside pickup/delivery, etc.)
Access to a national and regional carrier network
Easy tracking and tracing
LTL shipping has its drawbacks as well. It can take longer. Because you’re dependent on the pickup and delivery times for those who are sharing the load, it can take a lot longer for your freight to reach its destination. This is especially true of cross-country shipments that have to make stops along the 3,000-mile journey.
Also, it can be less predictable. You’re relying on delivery going off without a hitch with many different stops depending on how many other customers are sharing the trailer, making it less predictable than FTL which is usually a straight shot from shipper to its destination.
Full Truckload
Full Truckload shipping (FTL) refers to the hauling of freight over the road by filled-to-capacity tractor trailers. “Tractors” are the front part of a truck with the engine and driver (and maybe a bed) and “Trailers” are usually a fully loaded 48’ or 53' long trailer. The cargo is either floor loaded or palletized. FTLs are typically picked up at one point of origin and driven directly to one destination.
Benefits of FTL shipping include:
Direct transit and faster delivery (they are not routed on a hub system)
Less damage (packages are only handed at the pickup and drop off points)
Accurate shipment tracking
Predictable delivery windows
Price per mile (could be less expensive than per-pound pricing)
One of the disadvantages of FTL shipping is the higher cost. While FTL is efficient, it can waste truck space and capital. North American businesses spend an estimated $70 billion on FTL freight that ships with unused trailer space every year. Shippers can prevent this waste of deck space, money, and fuel by booking shared truckload, which gives shippers the FTL service they are used to at a lower cost.
Shared Truckload
Similar to FTL shipping, shared truckload moves freight directly from its pickup location to drop off locations, without stopping at or passing through hubs or terminals. But unlike FTL (and the other modes), shared truckload enables several shippers to share trailer space in one multi-stop full truckload. With shared truckload, shipments that are traveling on a similar route move on the same truck.
Shared truckload applies the concept of carpooling to shipping, optimizing truck space and keeping shipments in the same load together.
Benefits of shared truckload include:
Consistent, nationwide capacity
Direct transit (No stops at intermediary terminals)
Least handling (0.001% risk of damage)
No potential for split-up shipments
Accurate shipment tracking
More predictable delivery times
No freight-class requirement (fewer fines and fees)
Cost savings (about the same price as LTL shipment)
Since shippers do not pay for more space than their freight requires, shared truckload lets shippers with 10-28 linear feet of freight leverage FTL-style shipping for a fraction of the cost. Shared truckload shippers can send freight when it is ready and trust it to arrive on time, in full. For instance, Flock Freight, a US logistics startup that practices STL, claiming that it cuts costs by up to 20% with shared truckloads.
STL is versatile, combining the benefits of FTL and LTL. Because carriers can pay less per mile on multi-stop shared truckloads while enjoying the services of truckload. Ultimately, shared truckload gives shippers what they need: efficient and reliable shipping for less. This mode drives efficiency within supply chains by allowing shippers to send goods when they are prepared, leveraging hub-less transit, and optimizing shipping costs. However, it is still a new concept that came into practice, and it is used frequently by trucking companies, and not many 3PLs have the resources in place to run it regularly.
Conclusion
FTL is a relatively scattered and random direct transportation of goods from the starting point to the destination, which needs to rely on economies of scale to maximize benefits. LTL shipping, on the other hand, is generally a fixed and centralized trunk line and terminal distribution transportation, which needs to bring together the sources of goods from different logistics starting points to the loading and unloading station through branch line operation vehicles for integration. At the destination, the goods are broken down, loaded and unloaded, and then transported to the final consignees by local short-distance transport vehicles.
You should consider shared truckload if you have an LTL or volume LTL shipment of 1 to 12 pallets, as you can enjoy the service and efficiency benefits of truckload shipping (shorter transit time, reliable pick-up/drop-off timing, minimal handling) at an LTL price point. Conversely, you should consider converting your truckload freight to shared truckload if you have an underutilized trailer hauling freight without many unusual handling requirements on a high-value lane. You can potentially defray some of your costs and reduce your carbon footprint by sharing the load.
ASCI specializes in helping businesses like yours to address supply chain management challenges, including transportation coordination. Visit our website to learn more and to arrange for a free consultation.
