How the Right LTL Carrier Can Save You Money (6.18.24)

With logistics costs on the rise, choosing the right LTL carrier is an important way to save money on shipping while freeing up time to focus on day-to-day operations at your company.

According to the 2019 State of Logistics Report, U.S. business logistics costs have increased in the last year. LTL costs totaled 71.8 billion in 2018, a year-over-year increase of 8.3%. FTL costs totaled 296.1 billion, representing an increase of 7.6%. Concerns about tariff increases and consolidation in the industry have led companies that ship over $1 million per year through LTL and FTL freight to reassess how much they are spending on shipping services.

If you find yourself in this situation and do not want to outsource your logistics, but also do not wish to be burdened by back-office functions that steal focus from your day-to-day operations, choosing the right LTL carrier can help reduce costs and time spent managing your shipping. Many factors go into choosing an LTL carrier that is tailored for your products, your geographic needs, your preferred transit times and most importantly, your budget. In this article, we will discuss the following items related to saving money by choosing the ideal LTL carrier for your needs:

• What manufacturers should know about LTL shipping

• What to look for when choosing an LTL carrier

• How a transportation advisor can help

What manufacturers should know about LTL shipping

LTL means less-than-truckload freight. This refers to shipments that are not large enough in size and volume to necessitate the use of a full trailer — which would require the use of FTL, or full-truckload, shipping. This often means your goods ship more frequently, since you’re not waiting for enough orders to fill a trailer to that destination, but sometimes less directly since the truck may be dropping off shipments at other locations as well.

One major benefit of LTL shipping is reduced cost because you only pay for the space you use in the trailer. However, with the right LTL partner, you will still benefit from full liability coverage and access to technology that can reduce the delays historically associated with LTL shipping times.

What to look for when choosing an LTL carrier

If you are looking into LTL shipping as an option for your business or trying to cut costs on the LTL services you use, there are several factors that can help you choose a carrier that will save you money:

1. Minimum charge: This is often referred to as an AMC (absolute minimum charge). Simply put, the minimum charge reflects the lowest possible rate you can expect to pay on a shipment.

2. Base rate: This price is quoted per 100 pounds. Ask to see a carrier’s pricing information per CWT (centrum weight) as this will show how the base rate changes per hundred pounds of freight. As weight goes up, base rates should go down.

3. Discounts: LTL carriers offer discounts on base rates. When comparing carriers, it is important to understand how individual discounts affect base rates. The carrier with the lowest discount might also already have a low base rate, making it a better deal than it might initially appear to be.

4. Fees: As with all costs related to manufacturing, logistics functions may contain hidden fees. You can save money by looking out for and comparing LTL carrier fees, such as fuel surcharges, oversized freight charges, and lift gate service.

5. FAK provisions: Also known as freight-all-kinds provisions, this money-saving solution works by allowing you to apply one price to items that fall under different freight classifications

How a transportation advisor will help

The process of choosing an LTL carrier that will save your company money while still providing quality transportation and logistics management can be daunting. A transportation advisor like Resource Logistics Group can help by handling back-office transportation management.

Unlike our competitors, we believe in allowing you to speak directly with your LTL carrier. Our role is to advise and assist you in choosing your supplier, negotiating to price, and handling back-office management — you retain control of day-to-day operations.

We are experts who do more than just consult; we work alongside you, using logistics processes to put transportation volumes out to competitive bid and secure the best pricing and service levels on LTL shipping, FTL shipping, and all other logistics functions.

Resource Logistics Group brings industry experience to the table that is crucial when bidding on LTL services. Our clients have reported reduced rate-for-rate expenses of more than 50%. To receive a free benchmarking analysis of LTL and FTL pricing and contracts, contact Resource Logistics Group today.