LTL freight services refer to less than truckload shipping. This transportation uses a relatively small freight, which only occupies a portion of the entire trailer. Multiple shippers share the space on the same truck and are only paying for their own portion.
When it comes to determining what to charge each individual shipper, multiple factors come into play. The more the shipper understand the LTL freight rates, the better they can manage their expectations, which allows allows the shipper to prepare their shipment correctly for the most cost effective travel. Here are four factors that help determine those LTL freight rates.
Weight
The way that LTL shipping rates work is that the more the shipment weighs, the less the shipper has to pay per hundred pounds. The shipments are divided up into weight groups. The more the shipment weighs, the closer it will be to the next heaviest weight group. The lowest weight category is given for the LTL freight rates.
Distance
The president of SJ Consulting Group, Satish Jindel, stated that the length of haul has decreased. Public truckload carriers report that the average haul length has decreased from 2011 to 2016 by 4%. The rates are being determined by distance, so this is beneficial to shippers. The longer the distance the shipment has to go, the higher the rates are.
Density
Density is the total weight of the shipment divided by the total cubic feet of the shipment. It's important that shippers know how to calculate this, as if affects the shipping rate. LTL shipping services also need to know the dimensions of the pallet, if one is used.
Classification
Every shipment and piece of freight belongs to a certain classification. These classes are a big driving force in determining LTL freight rates, and there are 18 of them. They range from 50 to 500. Classification is determined by a combination of density, value, stow-ability, handling, and liability.
In a world where shipping is the norm because we have access to goods around the globe, knowing how shipping rates work is absolutely key. For less than truckload shipping, rates are determined by many factors, including weight, classification, density, and distance. Contact us today for all your freight needs.
Whether you're a company looking to improve one facet of your supply chain, your entire supply chain, or simply looking for a transportation and logistics consultation, we can help.
