How to choose the right shipping option: FTL, PTL, LTL, parcel
There is no shortage of shipping options when it comes to moving your freight, and choosing the right service provider is a challenge for every business. While the available shipping options have stayed consistent over the years — shippers have traditionally had the choice of parcel, FTL, PTL, and LTL shipping — the ever-evolving logistics industry has led to changes in what qualifies freight to be moved by these methods. Fluctuating rule tariffs (set by individual carriers) and new pricing strategies are also implemented on an annual basis, which means businesses occasionally need to alter their shipping strategy based on the (new) best option for their freight.
Here’s a quick refresher course to keep you up to speed.
Parcel shipping: no small decision for shippers
Parcel shipping is ideally meant for smaller packages that can be moved quickly and easily. In general, freight that qualifies for parcel shipping has the following specifications (keep in mind that these are general rules and are not applied across the board):
- Packages that weigh less than 150 pounds.
- Packages that have a combined length and girth measurement of less than 165 inches.
- Packages up to 108 inches in length. If they are 108 inches in length, they must not have a girth of more than 67 inches.
Parcel shipping has come a long way since the Pony Express. Modern parcel packages can be sent via ground or air transport, and unlike other shipping methods they are not shipped on pallets. It’s important to weigh the option of parcel shipping against LTL (less-than-truckload). Many shippers overlook opportunities to convert minimum charge LTL shipments into parcel shipments (or vice versa), which can lead to cost savings. The right 3PL (third party logistics) company will analyze your freight profiles to determine the most cost efficient shipping option that fits your needs.
Parcel shipping also often goes hand-in-hand with fulfillment services. Outsourcing fulfillment frees your team from handling inventory storage as well as the hustle and bustle of picking, packing, and shipping items via parcel delivery.
Less than truckload (LTL) shipping: lesser loads, more efficiency
LTL shipping is perfect for businesses (especially small and mid-sized businesses) who send shipments frequently but rarely have enough freight to fill an entire trailer. It helps you avoid overpaying for the smaller shipments that you are sending. LTL routes are typically designed as a hub and spoke model with terminals placed in key cities throughout direct service areas.
Freight that qualifies for LTL shipping is, as a general rule, classified as freight that utilizes 1-6 pallet spaces and weighs less than 10,000 pounds. To price freight for LTL shipping, carriers normally use the 18 freight classifications put forth by the National Motor Freight Traffic Association (NMFTA). These classifications are based on the weight, length, height, density, ease of handling, value, and liability of the freight.
LTL freight is broken into classes 50-500. Higher density freight typically receives a lower classification (between 50-85), while more fragile/less dense freight usually has a higher classification (between 125-500).
The great debate: paying by weight vs space
There are many great debates: Pepsi vs. Coke, PC vs. Mac, deep dish vs. thin crust. In the world of LTL shipping, the great debate between carriers is whether to charge via the traditional method of tonnage or by a space utilized (known as density-based pricing). Some of the larger carriers are strongly considering density-based pricing, and it’s making more headlines because carriers recognize one simple fact: they are in the business of selling space on their trailers.
Emerging issues with LTL shipping
The main issues shippers run into with LTL shipping is the variation between, and ever-changing nature, of carrier prices, tariffs, rules, and fees. A simple shipping or freight classification mistake can result in additional charges that diminish the cost-saving efficiency of LTL shipping. Carriers have also recently updated their over-length fees, and additional fees are being assessed on individual items that are more than eight feet in length. Carriers have charged these fees in the past, but they generally were not applied to items under 12 feet.
As the capacity crunch continues to loom over the industry, carriers have in turn become more selective about the max length included in their standard pricing structures as well as the freight and routes they are willing to take.
Stop the engines!
While some recent issues have emerged in LTL shipping, it’s still an affordable method of shipping, especially for small and mid-sized businesses that do not generally ship enough freight to necessitate entire trailers. With the right amount of coordination, route planning, and negotiation of rates with reliable carriers — something our tenured team makes easy for our clients — LTL shipping can be very efficient and cost effective.
PTL shipping: share the load; share the cost
Freight that qualifies for partial truckload (PTL) shipping typically takes up four pallet spaces or more, or up to 3/4 of space on a trailer. It’s generally more cost effective than LTL shipping, but it does have the drawback of slower transit times. This is because PTL is run with multi-stop loads. Where do the cost savings come from? The simple answer is shared trailer space. Your freight is taken by carriers hauling with other shipments that are picked up and dropped off either on the way to your warehouse or your freight’s destination.
As the capacity crunch continues to inflate costs, shippers are on the hunt for more creative options to move their freight. The evidence of increased PTL and LTL shipping can be seen in the rising freight tonnage index, demonstrating that more shippers are using these strategies to move their freight.
FTL shipping: full truckload, full service
If you’ve got a lot of freight, usually over 20,000 pounds on 20 or more pallets, full truckload (FTL) shipping may be the best option for you. FTL shipping is usually a direct shipment. No transfers, no stops, FTL shipping gets freight to its destination quickly, as the items are only loaded and unloaded once. The only quicker way is via air, but the costs for air shipments are significantly greater.
We can help you make the right choice
No matter which shipping option you need, there is one smart choice you can make: working with PNG Logistics Co. Our logistics experts carefully get to know your business. We help you make the right choice for your freight.