Anyone who ships within the continental United States has likely heard of less than truckload (LTL) shipping. LTL shipping is a freight class that falls somewhere between full truckload (FTL) and small package. It is a shipping solution that addresses that awkward, in-between stage of shipping where there is a load that is too much or too little for other commonly used classes.
Companies who are forced to send larger shipments in smaller bundles or smaller purchases on cargo that is too big drop a hefty amount of money, which can result in inefficient and ineffective uses of your precious resources. Since LTL rates vary, it’s helpful to understand how providers calculate them.
In this post, we examine the top 10 factors that determine less than truckload (LTL) rates so that you can make a decision for your company based upon industry knowledge. Let’s take a look at what they are below:
Weight is a factor that actually tells an LTL how much space you will need along with the relevant weight class. The more resources your shipments require, the more expensive your shipment will be by virtue of size.
Every freight delivery falls under a particular classification. Classes are a significant driving force that determines LTL rates. And there are 18 of them in total, which range between 50 and 500. It is a factor that is determined using an algorithm based on density, liability, value, and handling.
Distance is sort of a no-brainer in terms of pricing LTL shipping services and is standard across every shipping method. The further your loads need to go, the more expensive your order will be.
Density is another size-determining element that LTLs use to calculate your freight rates. They arrive at a number by dividing the weight of your shipment by its cubic footage.
5. Base Rates
The LTL partner you select establishes its own internal base rates based on the current market and their level of service. What one company may charge is not the same as another for this reason.
There are other types of specialty shipping services that your deliveries may require, including dock-to-dock, final mile, and lift gate service. Tacking these on will definitely correlate with a price increase.
The absolute minimum charge (AMC) is another determining factor that goes into your LTL rates. Carriers simply cannot go any lower than their rock-bottom prices.
The Impact on Your Bottom Line
Determining how much space you will need to efficiently and effectively deliver shipments is critical to managing your company’s bottom line. Aside from quality and security, consider working with an LTL partner, like Opus9, to help you get your loads where they need to go without sacrificing service.
Opus9 is an LTL provider that works to provide our clients with comprehensive freight services at a fair price. If you would like to discuss your goals with a team member, contact us for more information. Or, you can obtain a free, no-obligation freight quote using our convenient platform today!