Understanding LTL Shipping Rates for Your Retail and eCommerce Business

Written by Zac Johnson
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With more people diving into the world of ecommerce, dropshipping and selling on Amazon, the business of truck deliveries has been growing at a rapid pace as well.

In 2017, trucking revenues totaled $700 billion for medium and short distances. The transportation and logistics industry in the US has continued to thrive over the years. One of the shipping options that’s becoming prevalent is the Less-Than-Truckload shipping method, commonly referred to as LTL.

LTL is highly flexible and convenient. What’s more, the approach is cost-effective for medium and small-sized businesses. LTL allows you to ship in a trailer’s smaller space instead of using the entire container.

You ought to have insights on LTL rates and tariffs. When you need to partner up with an affordable and reliable LTL shipping company for your business needs, understand how rates are calculated.

Weight in Freight Calculation

The heavier your shipment is, the more affordable it gets. In shipping, this aspect is referred to as the hundredweight pricing. There’s a chart listing the prices as per the weight.

Freight carriers refer to this chart to determine the cost of shipping your items. Heavier freight is often subject to discounts, commonly known as weight breaks. Understanding the base rates is essential in cost-saving.

You can increase the size of your goods slightly and enjoy almost a 50% price reduction. Illustratively, a company might be charging $79.05 for freight weighing between 0-499 lbs. You might need to increase the weight of cargo if the price reduces to $39.53 for 500 to 999lbs.

Freight Class

In LTL shipping, freight is in a different classification. The density and value of products determine the shipping rates. The National Motor Freight Classification has grouped freight into eighteen groups. The groups are from 50 to 500, with 50 being the cheapest and 500 the most expensive.

These classes focus on stowability, density, liability, and handling. Products such as food snacks can have a higher rate regardless of the low weight. Such orders are prone to damage, which necessitates extra caution when transporting.

Besides, some items are not stackable. That means that such orders would require more space than other cargos with the same weight. Consequently, shippers will expect you to compensate for such variations.

Ensure that you provide adequate details about your shipments. You will get accurate pricing and avoid unanticipated billings. Undervaluing your products for cheaper rates might have more costly impacts at the end.

Density

Density is another factor affecting LTL shipping rates. Density refers to the space occupied by the shipment, which is in relation to the shipment’s weight. You get the density by dividing the item’s weight by the volume, which is in cubic feet.

The density of your shipment determines your freight class. Just like weight, the higher the density, the cheaper the freight charges. Products with lower density mostly fall in the 125 to 500 categories, which is more costly.

If your items are in pallets, calculate the density using the pallet’s dimensions, height, and weight of freight. Ensure that you consider any protrusions or overhangs when getting the dimensions. Once you determine the density of your shipment, get the LTL shipping quote and have your order delivered.

Distance

Distance has significant effects on shipping rates. If the distance is long, the price will go high. A longer distance translates to more fuel, equipment, and labor.

You’ll need to know the regions with specific carrier services. Some of these shipping companies don’t go beyond some geographic areas. Such information will save you from incurring more costs to have your shipment within your zip code.

Most companies result in interlining, which is the transfer of shipment to an LTL carrier servicing your area. The process ensures that your luggage will get to the specified address. However, you might need to dig deeper into your pockets to cover any extra costs resulting from the high minimum charges and low discounts.

Freight All Kinds

The freight all kinds, mostly referred to as FAK, refers to an arrangement where the carrier allows clients to ship different categories of items, with the billing being of one freight class. Multiple products can attract higher costs. But with this kind of arrangement, you can save some bucks.

If your commodities range between 100 and 200, you can negotiate with your career to rate your shipment as 150. This approach helps you to save, especially on high-ranking shipments.

A client should have substantial information on shipment classes to have the upper hand in negotiations. Know your shipment class before seeking for the shipping service. You will be able to negotiate for better terms based on the type of commodities.

Base Rates

The net profit of freight trucking companies grew by 6% by 2017. Despite the different base rates, LTL carriers have been growing steadily. You need to establish a carrier with a lower base rate for friendly LTL shipping rates.

The base rates are per hundredweight. Shipping companies determine the base rates based on gross costs, demands, and volume. With the notable variations between shippers, you need to get comprehensive quotes for companies you’ve identified.

Gross costs can increase if the lanes provide a stable balance between freight and trucks. Shipping Carriers can change their base rate to accommodate more volume. You need to understand some of these factors affecting the base rate.

Accessorial

LTL shipping goes beyond the typical services provided. A carrier can provide extra services, making you liable for freight accessorial charges. You need to incorporate these rates when calculating your shipping costs.

Accessorial services include residential delivery or pickup, liftgate service, and delivery to limited access areas, among other extras. Negotiate on these accessorials to reduce the overall shipping cost. Better still, provide all necessary information upfront to avoid getting invoices for services you hadn’t anticipated.

Information on LTL Shipping Can Enable You to Calculate Shipping Rates before Engaging Any Carrier

Get to understand all the factors affecting LTL shipping. With such insights, you’ll know how to save on shipping while still enjoying optimal services. Your carrier should provide all the information upfront for better negotiations.

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