How does Less-Than-Truckload shipping work?

so today we're going to talk about less than truckload and how less than truckload moves what kind of freight is it how does it operate so less than truckload is also called LTO it's the acronym for less than truckload so you'll hear that a lot if you're shipping ground domestic in the US Canada or Mexico you have three options on how you're going to move that Freight so first this small package I think everyone's familiar with small package providers the two big ones UPS and FedEx right so if you have Freight that's let's say under 150 pounds and you're shipping in US canada or mexico chances are that's going to move small parcel and then there's LTL which is the less than truckload and that's where you have pallets of freight moving or larger than greater than 150 pounds and the other ground mode that you'll ship in is truckload which is also called TIA now that's when you're going to fill a trailer a driver is going to back into the shippers door with a full trailer fold you're gonna load up that trailer he's gonna drive straight through so let's say he's gonna pick up in Massachusetts he's gonna make a delivery to Los Angeles California that truck driver a man a woman they're gonna get in that truck and they're gonna drive it straight through to delivery so the same driver that has picked up that Freight it's gonna be the same driver that's gonna deliver it now sometimes you do ship in this truckload mode and you're not filling the trailer but you may need additional better transit or based on the mileage even though the trailers not full the truck load rate is going to be better than your less than truckload so those are the three modes you're gonna ship and if you're shipping domestic typically what you find in lesson chocolate is you're removing pallets of product so you may have one to ten pallets of product and that is typically what you see moving in a less than truckloads face so how it works if I'm in Boston and I have a shipment let's say I have the same shipment moving to LA same Lane in California and I've got five pallets I'm going to make a pickup appointment and it's done a couple of different ways a lot of folks are now within a transportation management system so an order drops into the technology it automatically gets routed with the LTL carrier because it's five pallets and they get notification the LTL carrier that you have a pickup ready or if you're not in a digital environment and if you're not you should call us but if you're not in a digital environment then maybe you're making a phone call to a local terminal and you're asking them to come pick up your Freight or you're shooting them an email so at this local terminal Boston let's say if you're gonna ship this with a national carrier because they gotta go you got to travel almost 3,000 miles to LA that a local terminal is going to be somewhere in the Boston area that carrier in that local terminal there may be 50 local drivers working for them so what happens is driver reports in the morning to his terminal he then has dock workers that are loading him up with deliveries for the day so if this Freight coming in from LA if this Freight coming in from other locations it's gonna hit that local terminal so in the morning the driver reports to work he has a full trailer load loaded of freight now it may have 20 deliveries on it right because they're all less than truckload shipments from 1 to let's say 7 to 10 pallets so he leaves in the morning driver leaves in the morning and he or she makes all those deliveries the goal for that driver is they get all the deliveries done in the morning once they're empty hopefully around lunchtime then they start making their pickups now they have an empty trailer they're running around Boston and they're making all the pickups for the day fill in that trailer and bringing it back to the local terminal so within a local terminal with an LTL carrier you're gonna see where you'll have a driver who just does Boston in the city you'll have a driver who does we call it in Boston the cell Shore so they're gonna deliver South Boston and they call them peddle runs so if I'm a driver within an LTL carrier locally I have a territory that I'm managing all the pickups and the deliveries for so if you're a shipper or customer and you're in Boston in the city you're gonna tend to see the same driver every day or anytime you have a pickup or delivery which is great because you build and rapport with the carriers so let's say Jill the driver makes her pickups for the day she brings them back to the terminal and she's done for the day she goes home there's a whole night staff now that comes in in the warehouse with if they call it stripping they're unloading they're stripping all of the trailers that went out for delivery for the day they get backed into the doors of the warehouse the warehouse meant strip all those trailers within this terminal now what you're gonna have and again we're going to LA right so we've got a long way to go but within this Boston Terminal you're now going to have what they call line haul and let's say they're let they they designate line haul to doors so this local driver he's he or she is not driving thousands of miles they're just doing all the local pickups and Boston and bringing that Freight back to their local terminal now the warehouse folks they're gonna have a door that's maybe four PA and then they're gonna have a door that might be for Chicago and then they're gonna have a door that might be for a hub in Alabama depending on where they're going right so now is when you have the long-haul driver and play so now these long haul drivers the warehouse folks are gonna load a full load of freight for let's say this is in Harrisburg and they used to call him I think they still do but they called a breakbulk terminal so this line haul driver he has a scheduled run let's say every night where he's going to drive from Herot from Boston to Harrisburg PA and he's gonna drop all the freight for that territory same for Chicago same for Alabama so again these are called pedal drivers local pickup and deliveries out of their terminal territory line haul drivers come in and then they're driving these full loads of miscellaneous shipments to given areas to the LTL carriers breakbulk terminals when they hit here now let's say again we've got our shipment of California let's say the first break bulk is Harrisburg that Freight will get stripped again so now you got handling right you've handled it here you've picked it up and you've handled it at the dock you've taken it off this trailer you've put it on this one now here that could potentially be another breakbulk in the middle of the country where that Freight is now gonna be loaded off of this trailer and put onto another trailer and again you're gonna have a line haul driver come in and run it to the next hub the other thing to think about when you're shipping longer length of hauls with less than truckload is your Freight is gonna run on the rail and what does that mean so let's say you've got this Freight to Harrisburg PA and it's breaking in Harrisburg and it's going to California a lot of times with that long haul carry will do they'll take your trailer they take their trailer and they drop it on the railroad so they'll bring this Freight to Harrisburg to what's called a container yard which is where the railroad is and they'll put those trailers they stack them on the rail and they have these pins to hold them in place okay so this may run from PA on the rail to a local terminal in Los Angeles and what do we have again now we have these pedal drivers same staff out in Los Angeles and one of those drivers is actually going to go to the rail yard so they drive in their tractor and they have what's called it's it's kind of it's called a chassis sort of there's different terms if it's a container or a trailer but he's they call it a bobtail he's gonna bobtail over me and he doesn't have a trailer chat it's his tractor and himself they're gonna go over to the rail yard and they're gonna stack that trailer they're gonna bring it back to their local terminal in Los Angeles and then again you're gonna have a city driver in LA that's gonna make that delivery so a couple things to be thinking about if you're shipping and then a less than truckload mode one obviously most important is cost and if you haven't yet please make sure you listen to our other video about how to negotiate out tail rates and what they are what they mean because it's really important that you understand that so you want to understand the cost of the freight right and how it's going to move so second is packaging packaging is critical to the movement of your goods unless some truckload as you've learned right not only are you running in different modes you may be going over the road and on the rail depending on the length of haul but you're afraid is being taken off trailers and puttin on trailers so it's being cross stock it's moving from one side of a dog to another side of a dog there's a lot of different touches with your Freight so it's crucial that it's packaged correctly so can it can ride and when you think about packaging you also want to think about weight if you have a heavy product and you stack it and you stack it too high and it looks beautiful imagine traveling all these miles that weight me sink into itself so really important to understand packaging really important to understand how your Freight is gonna ride and at what weights does it make sense how high should those pallets be how should they be stacked should I be linking logging them to give it more stability should I have corner boards should I have inter cart and so it comes all that matters if you have no idea where to start with packaging first place to go would be to your LTL carrier they'll give you some really good indication and there's also some rules around packaging too even through government mandates that you can look at but start with the carrier because they know the third is going to be then transits now these matter so as I said let's stick with long haul for example or even regional there's long haul and regional carriers everywhere but they're transits not the same and their service isn't the same so it's really important to know that when you start talking about moving intermodal you start negotiating your LTL and they're giving you transit times for longer lengths of hauls if I'm negotiating that LTL I want to know in those transit what lanes are gonna run over the rail and what lanes aren't why because of delays you can have more delays on the rail then you could over the road and then conversely the flip is true let's say you're in Boston and you're shipping out to Montana and it's the middle of winter and you know you've got some start terrible storms approaching the rail tends to move over the road better in weather so understanding conditions and the conditions around transits are super important the other thing about transits is you want to know with a lot of the big-box retailers and customers you know they have they have said that you must deliver to me every Tuesday and Thursday at my distribution center in Chicago well you may find you're gonna use a carrier who only makes deliveries on Wednesdays and Fridays not Tuesdays and Thursdays so not just what is the LTL carriers stated transit but given the the your heavy volume customers really dictate really understand at a local terminal level how they are making deliveries to your customers you know we work for clients today who are all delivering let's say to the same very large distribution center for our customer and they're using three different carriers and the deliveries are different some of them are dropped trailing dropping in the trailers some of them are live loading and they're delivering on different days so it's crucial you understand that super important the other thing is you really want to wrap this up so now you've got all this understanding of cost of packaging of transit you want to be in a digital environment so now you know how if rate moves but you want to know where it is as it's moving and so transportation management system getting in a digital environment so you can measure all of the performance as that Freight is in transit and then you can report on it on the backend a big piece of negotiating cost is understanding your carrier's performance you're gonna you want the bus rate possible and if you're working with a carrier you also want to know look at your percentage of on-time is terrific or it's terrible service first then price and the only way you can understand this is to get yourself in a digital environment where you're measuring the carrier's performance now don't get me wrong carriers if you're not in a digital environment carriers will actually measure their performance for you but would you rather control your own destiny or have the carrier's do it important that you measure it there's a lot of milestones and moving this Freight and you want to measure those key performance metrics so if you need to learn any more about getting in this digital environment it is absolutely critical and being able to measure these milestones so that you can report and scorecard your carriers and talk them through problems you know you may find you have a carrier performing tremendously but overall their percentage is down because they're really they're really screwing up one lane well then you have the ability with the details and the data to say alright if we took this one lane away they would perform at such a high level let's figure out who can manage this Lane and manage it well and so that's LTO [Music]

Channel: FreightPlus

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Keywords: less than truckload shipping, less than truckload meaning, less-than-truckload, ltl trucking, shipping modes, How does LTL work, How does less than truckload work, shipping in LTL, transportation ltl, ltl freight, less than truckload, ltl pricing, ltl cost, supply chain, truckload shipping, logistics management, logistics and supply chain management, How does Less-Than-Truckload shipping work?

Id: mO1jmzdqSVE

Length: 14min 20sec (860 seconds)

Published: Wed Jun 24 2020