Each third-party logistics provider is likely to have its own profile in handling its operational processes. When negotiating to procure the services of a third-party logistics company you have to understand how it operates and how its operation can fit your needs. The Size and Weight of your shipments can have a big impact on your choice of fulfillment provider.
If you ship in small, light quantities you can make your shipments on a less than truckload (LTL) basis. LTL shipments typically weigh between 151 and 20,000 pounds. These are shipments too small to fill an entire truckload, but too large to be shipped as parcels. There are many carriers that specialize in LTL shipments and many of those will apply a discount on the heavier, larger LTL shipments.
LTL carriers collect freight from various shippers and consolidate the freight onto trailers for line-hauling to hub terminals where the freight is further sorted and consolidated for shipping to local destinations. In most cases, drivers start out the day making deliveries of loads from the previous day. Then they make pickups once the trucks are empty. They return to the terminals with new cargo for sorting and next-day delivery. Pickups are usually made in the afternoon for next day delivery.
Density: LTL freight rates are structured so that the more a shipment weighs, the lower the rate per 100 lbs. LTL shipments are usually palletized on 48″ X 40″ pallets for ease in loading. They are classified by density which is the total weight of the shipment and pallet divided by the volume in cubic feet. Each palletized shipment is classified according to the National Motor Freight Traffic Association (NMFTA) system. The higher the density the lower the cost of shipment per pound.
Distance: The longer the haul, the higher the price per hundred-weight will be. Many LTL shippers only serve specific geographic regions. For shipments outside the shipper’s serviced zip codes, the shipper will transfer your loads to other shippers for final delivery. This shipment transfer between lines (“interlining”) will add to the cost of the shipment.
Freight All Kinds (FAK): Arrangements can be made with most LTL carriers that enables shipments to be filled with pallets at different weight classifications to be shipped and billed at the same freight class (usually an average). For instance, a client that ships multiple commodities ranging from class 50 to class 100 can often arrange a FAK to have the shipments to be carried as if all the commodities were classified as class 70.
Minimums: Freight companies all have minimal shipment costs below which the shipment will not go. This minimum charge is constantly increasing. Carriers are demanding a 2 to 3 percent increase every year. Carriers are doing this because the cost for a minimum charge shipment always far exceeds the costs they experience for the heavier shipments.
Full Truck Load (FTL) Shipping:
When you ship volumes of homogeneous cargo sufficient to fill an entire semi-trailer or intermodal container, the carrier will contract an entire trailer-load to a single customer. This freight is not handled en route. There is no re-packing, sorting and transfer to other trucks. Full truckload carriers deliver the semi trailer to a customer or shipper who fills it with freight for a single destination. The only thing that gets altered during the shipment is the driver whose work is limited by hours of service regulations. Customers can usually count on their shipments moving along at a rate of 47 miles per hour (including traffic jams).
Freight is usually loaded onto pallets in shipping containers or crates. Once at destination, truckloads may be broken down for further delivery by LTF carriers or express carriers.
When you make decisions about interstate and international distribution and shipping, InsightQuote can help you research and find the best fulfillment service for your business. Please contact us to learn more.