Key Benefits of LTL Shipping Versus Parcel Shipping (9.23.24)

When it comes to cost, shipping speed, and safety, there are benefits to both LTL shipping and parcel shipping, but one comes out on top for higher-volume operations

At first glance, LTL shipping and parcel shipping appear to offer many of the same benefits. Both are ideal for businesses that do not require the use of an entire trailer. Both offer convenience, reliability, and many carrier options. However, there are key differences between LTL and parcel shipping that affect delivery speed, tracking, susceptibility to damage, service, and, most importantly, cost. 

When strategizing your logistics spend, it is tempting to go with the cheapest option between LTL and parcel shipping. This article will help you account for all the factors in that decision by looking beyond just the upfront price of the service. 

To determine what is best for your business’s shipping needs, you need to look at long-term value and the specific needs of your operation. To help do that, this post will cover:

• LTL shipping

• Parcel shipping

• Pros and cons of LTL shipping

• Pros and cons of parcel shipping

• Weighing the difference

• Getting help from logistics experts

LTL shipping

LTL shipping, or less-than-truckload shipping, is ideal for small freight shipments. Businesses that use LTL shipping do so because they do not need the full use of a trailer. LTL allows a business to only pay for the space it uses on freight shipments that weigh more than 150 pounds (though shipments often weigh considerably more than this). When using LTL shipping, a truck comes to your business and helps load the freight at the scheduled time.

LTL is on the rise, and that demand has been met with rate increases in recent years. For example, popular LTL carrier Old Dominion Freight Line issued a 4.9% rate increase effective March 1, 2021. This followed a trend of increases from other carriers, including Forward Air, Yellow, ArcBest, and Saia.

Parcel shipping

One of the key differentiators between LTL shipping and parcel shipping is weight. Parcel shipments must be under 150 pounds and are favored by businesses shipping lighter items for that reason. Unlike LTL shipping, there is no scheduled pickup involving a truck coming to one’s business. Instead, the shipper brings the parcel or parcels to the carrier during business hours.

Just like with LTL, parcel shipping has not been immune to higher fees as of late. In 2020, FedEx and UPS announced $3 handling surcharges, among other fees.  

Pros and cons of LTL shipping

LTL shipments are typically less likely to be damaged than parcel shipments because they are securely packaged and affixed to a palette, where they receive minimal handling. They are secure and unlikely to end up lost, damaged, or stolen. 

LTL is also attractive because it allows the shipper to transport items in volume rather than in individual packages.  A business — even one that deals in low-weight items — can send a large volume of items at once for lower overall costs. 

The initial investment of choosing LTL shipping may seem higher than parcel shipping, but the cost over time may be lower, and there is the convenience of a truck coming to pick up the item rather than your staff having to drop it off. LTL can also save money because the freight goes through fewer checkpoints than parcel shipping and avoids charges associated with these checkpoints. 

Cons of LTL shipping are the higher per-shipment costs, the need for a loading dock, limited tracking due to fewer checkpoints, and slower overall speed of delivery.  

Pros and cons of parcel shipping

For businesses that do not ship high volumes or do not ship frequently, the minimal commitment and lower upfront investment of parcel shipping are appealing. There is also no need for a loading dock. Parcel shipping can be speedier than LTL and is appealing to those who prefer frequent tracking updates on shipments.

The cons of parcel shipping are the potential for higher costs in the long run (especially through hidden fees, such as address correction charges) and the potential for damage. Unlike LTL shipments, parcels are handled frequently and are not securely affixed to palettes.

Weighing the differences

No two logistics strategies are the same, so when choosing between LTL shipping and parcel shipping, the correct answer will ultimately be determined by your business’s unique needs. LTL shipping is desirable to businesses that ship high volumes on a regular basis, have a loading dock, and want a long-term relationship with a carrier (and the discounts that might come with that). Parcel shipping is ideal for businesses that ship smaller volumes on a less frequent basis.

When it comes to long-term value, LTL is more cost-effective due to volume discounts and less risk of damage.

Help from Resource Logistics Group

When determining the best logistics strategy for your budget, needs, and future goals, it can be difficult to sort through carrier choices, shipping options, and complex contract language. In today’s world, there are more shipping options than ever. To find the best strategy for your business, it helps to have a trusted advisor in your corner. Resource Logistics Group can offer you exactly that. To learn more, contact us.