Understanding less than truckload (LTL) shipping


With the rise in popularity of ecommerce and evolving shopping experiences, less than truckload (LTL) shipping is becoming a more attractive option for many companies looking to cut costs and gain efficiencies while still exceeding customer expectations.

Often, companies start with basic LTL service, also known as common carrier LTL, where freight is consolidated and deconsolidated to take advantage of economies of scale.

Because of LTL's growing importance in supply chains, we're continually looking for ways to help our customers improve their LTL strategies. That's why we've gathered key information to help you understand what LTL shipping means in today's transportation market.

What is LTL shipping?

  • LTL stands for less than truckload
  • Freight small enough not to require a full truckload
  • Many shipments consolidated for shipping
  • Usually arranged on pallets
  • Range from 150 to 10,000 pounds

Don’t fight the LTL market—plan for it

Shippers and LTL carriers have very different perspectives on how the LTL operational model actually works. There are basic underlying factors that constrain (1) geographic hub and spoke LTL networks for cross-country deliveries and (2) local pickup and delivery networks for LTL.

Hub and Spoke LTL Network

Freight moves from several satellite terminals to larger breakbulk terminals. As freight ebbs and flows, unexpected lane imbalances frequently disrupt hub and spoke freight networks.

ltl map
letter a
LTL freight is picked up and taken to a satellite terminal, then released for delivery to breakbulk terminal.
letter b
At the breakbulk terminal, freight from satellite terminals is unloaded, crossdocked, and reloaded.
letter c
Freight is unloaded at a consolidation facility, crossdocked, staged with other freight going to the same area, and loaded onto a full truck.
letter d
Freight is unloaded, crossdocked, and reloaded for delivery to satellite terminals.
letter e
Freight arrives at satellite terminal for local delivery.

Local LTL pickup and delivery network

LTL carriers schedule routes to serve many customers and effectively use the trailer’s pallet positions. Shippers/consignees receive a tender code if an issue impacts pickup, transit, or delivery. (See explanation of tender codes at left.)

Truck loading is optimized at terminal by load planners.
The first delivery is the shipment closest to the terminal.
Incorrect addresses. Solvable issues don’t stop service; they can be corrected with communications.
Adverse weather. Shippers who understand the impact of inevitable delays can better manage on time performance expectations.
Last delivery. Truck is emptied.
Carrier stops service because of a required call for appointment or an early close time for the shipper. The LTL carrier’s tender code stops service until the issue can be resolved.
First pickup at location farthest from terminal. Pickup scheduling is based on customer provided shipment weights/sizes or historical freight characteristics.
If earlier pickups are larger than planned, the truck runs out of skid space before the route is completed. The carrier may send a driver with extra room to make the pickup.
Full truck returns to terminal for unloading.

Consider tender codes in service evaluations

Carriers submit tender codes to the shipper to represent special service requests from the shipper/consignee that could cause a shipment delay.

Loads with tender codes can have a big impact on supply chain performance.

In recent research about LTL service performance, about half the tender codes stopped service—meaning the carrier will still deliver the shipment, but will not consider it late if delivered after the scheduled/published transit date. Sample tender codes follow.

Tender code Definition
ATTMPT Delivery of this shipment was attempted.
APPT Consignee requires appointment.
CNSOL Consolidation shipment is not subject to the standard required delivery date. Shipment held at shipper's request for full consolidation load.
CRHOLD Shipment delivery was delayed due to payer's credit hold status or no payment was available at time of required delivery date.
HLDAY Shipment was delayed due to holiday closure.
NOREC Consignee was unavailable to receive shipment
ONHND Shipment was held for disposition instructions.
REFSD Delivery of this shipment was attempted and shipment was refused by the consignee.
SMKD Spot quote shipment is not subject to the standard required delivery date.
WEATH Shipment encountered weather delay while in-transit.

Key factors for high-performing LTL shipments

Research shows how shippers’ freight attributes and practices contribute to LTL performance. Use these insights to better manage expectations for LTL performance—on time pickup (OTP) and on time delivery (OTD).

Assessing the 5 Biggest LTL Savings Opportunities

Are you missing potential savings opportunities on your LTL shipping? Knowing where to look is the first step. Our white paper offers five ways to assess your LTL shipments and identify cost reduction opportunities.

What is LTL Freight & How Can It Work for You?

LTL freight does not require a full truckload due to the smaller nature of the parcel or order. There are additional challenges and benefits to choosing LTL shipping as long as you follow these best practices.

We work with LTL shipments every day and are ready to solve your challenges