What is LTL Shipping? Top 6 LTL freight shipping challenges and how a logistics platform can help
By FarEye | October 13, 2022
According to the American Trucking Association, the LTL industry is poised to grow at a rate of 3% every year for the coming half-a-decade. The demand for frequent and smaller orders has rapidly grown in the past few years. This has ballooned the importance of less-than-truckload (LTL) shipping. LTL refers to shipping freight that consumes only a portion of a trailer truck.
Even though LTL has become a popular means of moving freight, certain challenges still prevail while efficiently planning freight movement.
Shrinking delivery turn-around-time, costly shipping, choosing the right LTL provider, excess inventory, poor visibility among others at times make LTL shipping a complex thing to execute. Let’s quickly glance through some of the key LTL shipping challenges in this post.
Smaller Delivery Windows
The ‘Amazon effect’ has impacted both the B2C and B2B worlds, making customers impatient. Businesses are in fact competing based on their ability to deliver fast. The problem that LTL carriers often face is having to wait for long durations at docks to receive shipments. Over the past few years, shipping volumes have increased multifold but the means and processes to load trucks by and large remain the same. It isn’t easy to compensate for these delays and carriers find it difficult to comply with rigid and short delivery timelines.
Risk of Goods Becoming Damaged
An LTL carrier is meant to make multiple stops when executing multiple deliveries. This adds to the time taken to complete each delivery and increases the time a product sits inside a trailer. Similarly, traveling through multiple LTL delivery terminals results in additional handling of pallets that in turn increases the risk of damage.
Choosing the Right LTL Carrier
In countries like the U.S., a handful of large LTL carriers dominate the marketplace. Shippers should not feel pressure when choosing an LTL carrier. Before choosing an LTL carrier, a business must have a clear idea of transit times or how fast do they want to executive a delivery, this will help narrow down whether they want a long-haul LTL carrier or multi-regional one. Having a clear understanding of an LTL’s liability coverage is important as well, especially in scenarios where the coverage does not meet the actual freight value. Classifying your freight accurately is also a key as the density of a product directly impacts shipping costs.
The U.S. is facing acute driver shortages. According to a 2019 American Trucking Association report, the U.S. trucking industry was short roughly 60,800 drivers in 2018. In 2017, this number was 50,700. ATA also highlighted that if the current trends hold, the shortage could rise up to 160,000 by 2028. Shortages of drivers result in poor availability of trucks making it difficult for shippers to scale delivery operations.
It’s becoming extremely difficult for the shipping industry to cope with the increasing industry demands. This is especially true during holiday seasons when purchasing activities suddenly spikes. With LTL carriers a few years back, they used to have a buffer capacity to deal with a sudden increase in demand. Now they are already operating at full capacity hence responding to demand spikes is becoming challenging.
Poor Freight Visibility
The logistics industry is known to suffer from poor visibility of inbound freight. Shippers often do not have adequate information on ETAs and where a truck is at a given point of time. Unloading also becomes a challenge due to lack of freight visibility. One needs to know exact ETAs to keep manpower ready to quickly unload a truck.
How Today's Logistics Platforms Can Optimize LTL Shipping
A modern logistics software can empower LTL shippers to gain exceptional levels of visibility of goods in transit by replacing multiple sources and modes of information into one single platform. This puts a check on unnecessary diversions, enhances carrier performance and drastically shrinks delivery turn-around-time. This significantly broadens the window for achieving larger volumes of on-time delivery.
Powered by machine learning, modern logistics software can learn from the actual paths which the vehicles are taking and predict an ideal and cost-effective path for new trips. This again helps deliver on-time. Machine learning also improves demand planning by helping shippers understand buying patterns and customer behavior. Such software improves transportation capacity by enabling zone skipping. Zone skipping reduces transit time and costs as well. Additionally, reduced time on the road and delivery to a single hub mean slimmer chances of goods getting damaged.
A modern logistics platform also enhances customer experience by making deliveries flexible. It helps shippers create a self-service delivery model for customers where the latter can choose time-windows and pickup and drop-off points. It also informs the customers in case of changes in the delivery fee, making deliveries more transparent.
When it comes to selecting carriers a logistics platform can be of immense help. It can help shippers lay down custom rules while selecting LTL carriers. These rules can be based on consumer preferences, service type, geography, volume, turn-around-times (TATs) and manual priorities. It enables shippers to get quotes from transporters in real-time during sudden demand spikes and carrier unavailability exceptions. It automatically allocates the right load to the right LTL carrier by analyzing the historical performance of previously availed carriers.
A logistics software provides digital control towers to help shippers monitor, measure and manage carrier operations across the supply chain. They can measure all the important carrier KPIs, know where things are going wrong and trigger alerts to address them.
As challenges in the LTL industry become more complex, it’s imperative for shippers to embrace a modern and intelligent logistics platform, otherwise making LTL shipments cost-effective will become extremely difficult.