Every organization and manufacturer wants to ensure fewer overhead charges to keep the cost of products low. The major chunk of this overhead comes in the guise of increasing logistics expenses. To address this problem, one needs to be smart when choosing how to transport freight.
Some words of wisdom that we have learned from our experience and customers, it’s not really a good idea to tick off the list of FTL (full-truckload) best practices while executing LTL (less-than-truckload) shipping. Let us quickly explain why.
How FTL and LTL Work
FTL means having the full truck space assigned to a single shipper’s products. The cost incurred will be bearable by the one who is shipping the products as all the space is being allotted to the organization. LTL is used when we do not have an appropriate quantity of products to fill the truck space and hence we only take some of the space of the truck and accordingly costs get divided. Talking about both practices they have their own merits and demerits along with the utility they account for.
The management practices also differ in handling both facets, and regular approaches followed in one type may not be fruitful in the other one. These approaches differ when logistics is carried by a third party (3PL) i.e. when we need to hire some other organization to help companies in transportation.
Why It Is Not A Good Idea To Manage LTL like FTL
Managing FTL shipping is not too complex, but its best practices can not be applied for LTL. With regards to FLT, the freight being transported has only one destination, making it easy to calculate ETAs. LTL shipments have multiple stakeholders. Multiple shippers have their goods being transported on a single truck. Hence, there are multiple drop points as well, making it difficult to calculate ETAs.
In the case of FTL, once the goods are loaded on a truck, it goes untouched until it reaches the final destination as there are no drop points in between. LTL is exactly the opposite. With more than one drop point, delivery executives need to open up a trailer every now and then to move pallets and unload goods. This increases the chances of tampering and delays. So, if you are thinking of lowering transportation investments by choosing LTL shipping and expecting security and speed than an FTL offers, you will be inviting trouble.
The equipment and maintenance cost management in FTL is also different from LTL due to the distance factor and capacity allocation. The LTL pricing is governed by NMFTA (National Motor Freight Traffic Control) having fixed cost but FTL has no governing body and market price is to be borne by the organization. The cost analysis is done based on the requirement of whether we need full truck space or partial because if you choose the wrong option, you might end up paying for space that you are not even utilizing.
So, it's wise to first evaluate the requirements and utility, then go on to decide the final option to be considered as the management in various facets is different for both choices.