Less-than-truckload (LTL) shipping can provide significant cost savings for businesses that don’t require a full truckload. However, LTL shipping rates can still vary widely between carriers. Follow this guide to lower your LTL freight costs without sacrificing service.
Choose an Experienced LTL Freight Carrier
The first step to lower LTL rates is finding the right carrier. An experienced LTL freight company will have the equipment, processes and driver expertise to handle partial loads efficiently. This translates to more competitive pricing.
When evaluating an LTL carrier, inquire about their experience with customers in your industry and shipping profile. Ask for client references to verify service levels. Checking online reviews can also provide insight into a carrier’s reputation.
Optimize Your Shipment Packaging
How you package your LTL freight can impact pricing. Items that are well-packaged and easy to handle can qualify for lower rates.
Use quality shipping materials that adequately protect your LTL freight. Pallets and crates should be sturdy and stackable. Avoid odd-sized boxes that leave empty space on pallets.
Proper packaging prevents damage; as a result, LTL freight carriers will perceive your freight as lower risk. It also enables easier handling by warehouse staff and drivers. Optimized packaging allows carriers to fit more freight on each trailer.
Leverage LTL Freight Class
The rates for LTL freight shipping are partially based on the freight class of your cargo, which indicates its packaging requirements and level of handling care. Freight classes range from 50 to 500, with lower classes representing easier-to-handle freight.
Work with your carrier or Freight Broker to determine the optimal freight class for your products based on their characteristics, value and packaging. A minor difference in freight class can have a drastic impact on your LTL shipping rate.
You may be able to lower your freight class with simple packaging adjustments to improve stackability and handling ease. Also, discuss any opportunities to reclassify your freight with your provider.
Use Technology to Optimize LTL Shipping
Technology solutions can identify efficiencies in your LTL shipping process to reduce costs. Transportation management systems (TMS) have routing and load optimization tools that generate cost savings.
A TMS can automatically rate-shop across carriers and recommend the most affordable LTL freight routing options.
Small businesses can also benefit from basic route optimization. Analyze your past LTL shipping patterns to identify lanes with high volume. Then, work with carriers to negotiate discounts on those lanes in exchange for consistent volume.
Consider Shared Truckload
If your shipment size fluctuates, you may be able to take advantage of the shared truckload. This service involves coordinating with other shippers to fill an entire truck, with each party paying only for their portion. Shared truckload can offer better rates than standard LTL.
Truckload brokers like Lot Logistics help facilitate shared truckload arrangements. Our networks and shipping volume make it easier to match complementary freight from multiple shippers to fill a truck.
Adjust Your Shipping Schedule Around Peak Demand
LTL freight carriers have peak demand seasons that impact pricing. For example, rates often increase near the holidays due to higher volumes. When possible, adjust your shipping schedule to avoid peak surcharges.
Shipping outside traditional business hours can also save money, as some carriers offer discounts for late-night or weekend deliveries. Avoiding congested urban rush hours reduces transit times, lowering operating costs for carriers that they may pass onto you through lower rates.
Consolidate Orders Into One Shipment
If you regularly ship LTL orders to the same destination, consolidate them into one larger shipment when possible. A single LTL shipment is typically less costly than paying for multiple LTL orders.
Order consolidation may involve adjusting your inventory management. Discuss options with your LTL provider, such as setting up an inventory stocking program. This allows the carrier to hold your goods at their facility until enough orders have accumulated to fill a trailer.
Long-Term Volume Discounts
Negotiate with your carriers for a long-term volume discount rate in exchange for committing to regular shipments. Rates are typically based on the annual amount spent on LTL shipping.
To qualify for volume rates, you’ll need to provide details on your expected annual shipping spend and freight profiles. Once an agreement is reached, you benefit from the lower pre-arranged rates—given that you are able to meet the minimum volume requirements.
For small businesses, working through a Freight Broker like Lot Logistics facilitates access to LTL shipping volume discounts. As a reputable Freight Broker, we combine your shipments with those of other clients to reach minimum volume levels.
Optimize Warehouse Location
Your warehouse or distribution centre location can impact LTL shipping costs, especially for deliveries to a concentrated regional area. Warehouses close to your clients reduce mileage, transit costs and risk of damage from lengthy transport.
Evaluate whether relocating your warehouse closer to core markets could reduce LTL shipping rates enough to offset higher rental costs. Locating your warehouse near major highways can also optimize routing efficiency to help reduce your long-term expenses.
Shop & Compare Different Carriers
Pricing for LTL shipping varies among providers based on route networks, equipment costs and operating efficiencies. Obtain quotes from multiple carriers to find opportunities where you can save on your shipping costs.
Working with a Freight Broker, you can quickly compare quotes across numerous providers. Brokers have carrier networks and technology to make the rate-shopping process simple and straightforward.
Negotiate Discounts
Once you’ve selected a top LTL carrier candidate based on service and pricing, negotiate to try and lower rates. Discounts may be available for volume commitments, off-peak delivery times, specific shipping lanes or certain freight profiles.
If carriers don’t negotiate published rates, discuss options like waiving fuel surcharges or including extra pickup/delivery stops at no charge. Offering consistent volume in exchange for better pricing can motivate carriers to make concessions. Consider negotiating incentives for on-time delivery or claims reduction.
Trusted Freight Brokers
An experienced Freight Broker understands how to leverage their carrier relationships and buying power to get clients the lowest LTL rates. They will be familiar with seasonal rate changes, carrier incentives and other cost-saving tactics.
Our logistics professionals can advise on load optimization, freight packaging, consolidation programs and other ways to reduce your LTL spend.
Use proven, reputable and qualified Freight Brokers for access to the lowest LTL shipping rates. With personalized guidance and negotiating power, our Freight Brokers can help optimize your shipping spend.
