What is LTL Freight Consolidation?
Today LTL freight consolidation needs to be given serious consideration. The reason is simple, improving freight shipping cost. LTL freight consolidation is the practice of combing LTL shipments to take advantage of truckload pricing. The less-than-truckload (“LTL”) freight industry operates within a highly dynamic landscape. Many manufacturers and distributors struggle to lower their freight cost with repeated LTL shipments to the same distribution centers or regional areas. This practice makes it difficult to improve profitability by not taking advantage of LTL freight consolidation.
The Consolidation of the LTL Industry
Less-than-truckload freight shipping dominated the trucking industry from 1920 to 1970. Then two big changes occurred, deregulation during the 1980s and a rise in international trade. Today the LTL sector operates as a $34.5 billion specialty within the $700.4 billion trucking industry in the United States. Recently the largest LTL firm in Europe, XPO Logistics, paid $3 billion to acquire Conway Freight. The five largest LTL firms in the United States today account for 52% of total LTL revenues. Another factor contributing to the complexity of the industry relates to firm operating areas. Today, many LTL firms operate only within specific, geographically defined regions.
Is Standard LTL Shipping or LTL Freight Consolidation Right For Your Business?
This depends on the specific needs of the shipper. Holding onto shipments to consolidate into larger LTL shipments highlights other issues. Delay of transit s one issue, storage and floor space is yet another issue. Storing goods also decreases cash flow as goods that are not shipped cannot be invoiced. So understanding if LTL freight consolidation is right for you is multifaceted and specific to every shipper.
How Do LTL Carriers Base Their Minimum Rates?
All LTL carriers maintain base rates established by the individual freight carrier. However, in addition to this charge, several other costs typically enter into the process of transporting freight. These expenses include the total weight, the distance the shipment will travel and freight class. LTL carriers can also add surcharges for performing additional services, these services are known as accessorials. Accessorials add-ons can include; liftgate service, residential deliveries or setting delivery appointments.
The Benefits of Negotiated Discounts
As experts in freight shipping, we can assist companies seeking to benefit from the process of LTL freight consolidation. For instance, even very large carriers will negotiate discounts under certain circumstances. Trucking companies generally maintain a lower overhead when they transport full high-density loads. The process of LTL freight consolidation may offer big savings for several small volume shipping companies and at the same time assist the carrier. Ask us for a free freight analysis of your LTL freight shipping needs today!
Contact Freight-Specialist today if you need help consolidating your LTL freight.