Less-than-truckload (LTL) freight is a shipping method in which multiple shippers share space on the same truck rather than paying for an entire trailer. It is typically used for freight shipments that are too large for parcel shipping but do not require the capacity of a full truckload (FTL). LTL freight makes up about 10 to 15% of freight moving on the road today, making it a significant within modern transportation networks.
In this guide, we’ll explain:
- What LTL freight is
- How LTL differs from FTL shipping
- What factors influence cost, class, and tracking
- Strategies for optimizing shipments
- How real-time tracking and Internet of Things (IoT) solutions can improve visibility
How Does Less-Than-Truckload Shipping Work?
Less-than-truckload works by combining shipments from multiple businesses within the same truck. Each shipper pays for the portion of trailer capacity its freight uses rather than the cost of an entire truckload. LTL carriers then move these shipments through a network of terminals or distribution hubs before they reach their final destinations. LTL freight is also commonly palletized to protect individual shipments and make them easier to handle as they move between trucks and terminals. Secure palletization can help reduce the risk of damage across these multiple handling points
LTL freight carriers use advanced transportation visibility and tracking systems to efficiently manage the movement of goods and lower your costs. The result? LTL shipping provides a flexible and cost-efficient approach as part of your supply chain success strategies. When you have real-time transportation insights, you get comprehensive visibility into every shipment’s location, status, and delivery performance.
Freight Consolidation and Hub Networks
Freight and package consolidation are core processes in LTL shipping, allowing carriers to combine shipments from multiple businesses within the same truck. By combining smaller shipments from multiple customers, freight haulers can optimize their trailer capacity. At the same time, shippers share the costs of delivery, resulting in lower charges for each shipper
Typically, this process follows the hub-and-spoke model, where shipments move from local terminals (spokes) to a regional distribution hub or a 3PL logistics provider. Goods are then sorted and sent on their way to their final last-mile destination.
You get a more efficient and less expensive shipping method, but it does require more handling and transfer, often between multiple LTL freight carriers. That’s why advanced tracking systems with IoT sensors are crucial to provide traceability through multiple hubs and carriers.
Freight Classification and LTL Pricing
LTL freight pricing is based on several factors, including freight class, shipment weight, distance, and any additional services required. Freight class helps carriers categorize shipments based on characteristics such as density, handling, stowability, and liability, which can influence the rate a shipper pays
Because LTL shipments share trailer space with freight from other businesses, shippers pay for their portion of the transportation rather than the cost of an entire truckload. Other factors, such as pickup and delivery locations and accessorial services, can further affect the final LTL shipping rate
When figuring out costs, check out an LTL freight class calculator, starting with the freight class listed in the National Motor Freight Classification (NMFC) system.
LTL vs FTL: What’s the Difference?
The primary difference between LTL and Full Truckload (FTL) shipping is how much trailer capacity a shipment requires. LTL combines freight from multiple shippers in one truck, while full truckload shipping generally dedicates the trailer to one shipper or load
| Feature | LTL (Less-Than- Truckload) | FTL (Full Truckload) |
| Shipment Size | Smaller freight shipments that use part of a trailer | Fills an entire trailer |
| Cost Structure | Pay only for the space used | Flat rate for the entire truck |
| Transit Times | Longer due to multiple stops and transfers | Faster, direct to destination |
| Handling | Multiple handling points through terminals | Minimal handling, reduced risk of damage |
| Typically Best For |
Smaller shipments | Large, high-volume, or time-sensitive loads |
Choosing the right shipping method is vital to keeping costs under control. For smaller shipments, LTL offers flexibility and cost savings. For high-value or urgent freight, FTL may be the better choice despite the higher costs.
Benefits of Less-Than-Truckload
LTL shipping gives businesses a more flexible and cost-efficient way to move smaller freight loads. By sharing trailer space with other shipments, businesses can lower transportation costs, make better use of available capacity, and access specialized delivery services without paying for an entire truck
Let’s break down specific benefits shippers appreciate when choosing LTL freight for deliveries.
- Cost Efficiency: Only pay for the trailer space you need, delivering cost savings compared to booking an entire truck.
- Flexibility: LTL shipping adapts easily to variable order sizes and timelines.
- Supply Chain Sustainability: LTL freight consolidates shipments to make more efficient use of available truck capacity, helping reduce unnecessary transportation and support supply chain sustainability goals.
- Accessorial Services: Add special handling, such as lift-gate delivery or inside pickup for diverse industries and facility types.
IoT-enabled tracking and real-time visibility can give you a clearer view of shipments throughout the delivery journey, helping you identify locations, monitor conditions, and respond to issues as they arise
When to Use LTL Freight
As a rule of thumb, LTL shipping works best for smaller shipments or when your freight wouldn’t fill an entire truck.
This model works especially well for manufacturers, retailers, and suppliers that manage inconsistent order volumes. It also helps reduce unnecessary freight costs by combining loads that might otherwise have to be shipped on a half-empty truck.
Can You Ship LTL Without a Pallet?
You can ship LTL freight without palletizing, but it’s not typically a good idea.
With LTL shipments, freight is typically loaded and unloaded multiple times. It might pass through multiple hubs or go through cross-docking in distribution centers. LTL shipments may also move through multiple terminals or carrier networks before reaching their destination. The more handling your goods go through, the more opportunities there are for damage, especially when they’re not packed tightly on standardized pallets.
Using pallets and shrink wrapping is usually your best bet to protect your freight and provide more accurate LTL freight tracking during transfers.
Improving Visibility Across Less-Than-Truckload Shipments
Less-than-truckload can create added visibility challenges because shipments may pass through multiple terminals, transfers, and handling points before reaching their destination. Each additional handoff can make it harder to maintain a consistent view of shipment location, status, and condition.
Visibility becomes more challenging (and more essential). Multiple carriers also mean multiple data sources, spread among freight brokers and 3PL/4PLs. You need a comprehensive data-driven visibility platform that tracks data from multiple carriers and IoT devices. A unified view lets you track shipments more accurately.
The best systems also provide alerts on delays or route deviations in case you need to adjust delivery notices to customers. Modern IoT sensors can also do much more than track location, such as monitoring conditions. For example, you can keep an eye on temperature that might affect goods or “shocks” where goods are jostled.
Less-Than-Truckload Examples by Industry
LTL can support industries that regularly move smaller, recurring loads without requiring a full truck, particularly when shipment volume, timing, and delivery needs vary. Its flexibility makes it useful across sectors ranging from automotive and manufacturing to agriculture and aerospace.
Let’s take a look at some real-world examples and how different sectors use LTL freight.
- Automotive Original Equipment Manufacturers (OEMs): Move smaller batches of components to assembly plants, supporting lean manufacturing and just-in-time production
- Automotive Suppliers (Tier 1 and 2): Synchronize parts delivery with OEM schedules and maintain efficient production flow
- Commercial and Industrial Manufacturing: Replenish raw materials, deliver finished goods, and balance production cycles
- Agriculture Manufacturing: Optimize delivery costs for equipment parts, seed, or chemical shipments, especially in rural and regional markets
- Aerospace Material Manufacturing: Transport sensitive materials and subassembly components between facilities or to manufacturing centers
In each case, LTL freight provides a flexible and cost-effective solution for industries handling smaller, more frequent shipments. For high-value shipments, pairing LTL operations with advanced IoT visibility tools also helps you track security, handling, and delivery.
Improve LTL Visibility and Tracking With Surgere
Real-time visibility can help businesses manage the additional handoffs and transportation complexity involved in LTL freight
With IoT-driven solutions, Surgere enables real-time asset tracking and shipment monitoring throughout your supply chain. You get tracking and traceability while also leveraging predictive analytics that help logistics teams make better decisions and minimize risk.
Surgere’s IoT technology can integrate with transportation management systems (TMS), warehouse management systems (WMS), and yard management systems (YMS) to connect shipment data across transportation, warehouse, and yard operations, supporting end-to-end visibility and a more effective order fulfillment strategy.
Contact Surgere today for a demo, and experience how real-time visibility can strengthen your LTL freight strategy.
