Why is LTL Freight So Expensive

Why is LTL Freight So Expensive

Almost any business in the US relies on transportation services. There are several factors that affect shipping rates, and each transportation service has its own nuances.

LTL shipping is one of the most popular ways of freight delivery. It is convenient for shipping commodities that can not fill the whole truck or trailer. LTL transportation, in addition to basic factors, has unique aspects that affect the rates.

What affects LTL Shipping Price

LTL freight is commonly more expensive when you pay per unit or per mile. If you know all the aspects that affect the rates, you can adjust the rates accordingly to your needs. What you need to know:

• Freight class. That includes density, liability, handling, and stowability of your freight.
• Minimum LTL charge. There is a fixed rate that carriers won\’t go lower to protect themselves.
• Fuel consumption. Due to LTL having several delivery points, the vehicle consumes a lot more fuel, and those costs are passed to the customer.
• Weight. The minimum rate from above is based on the shipment weight. There are six weight-based breaking points that change the minimum charge.

• The minimum charge (based on carrier)
• < 500 lbs
• > 500 lbs but < 1000 lbs
• > 1000 lbs but < 2000 lbs
• > 2000 lbs but < 5000 lbs
• > 5000 lbs but < 10000 lbs
• >10000 lbs but < 20000 lbs

• Additional services for LTL freight. It includes fees for extra services that the carrier can but not required to provide while hauling your commodities.

Why is LTL More Expensive Than TL Rates

If directly compared, LTL costs less than TL. However, if you split the numbers down to per unit, LTL will be more expensive. If you have a big load, sometimes it would be more efficient to go full truckload but many businesses can’t go this way. It\’s all because the whole freight is composed of parcels for different consignors.