5 LTL freight shipping secrets that save you money now Part 4 By Michael Rogers shipping expert
Michael Rogers
June 05, 2008
www.4way.com
Understanding a few key insider secrets before you choose a carrier can help you avoid thousands of dollars in losses and countless hours of frustration. This column is the fourth in a five-part series designed to eliminate many of your transportation management headaches.
Insider Secret #4: Know When To Use Contract Carriers Versus Common Carriers For LTL Shipments
LTL (less-than-truckload) freight is any freight that is too large for the parcel carriers (i.e. UPS or FedEx), but that does not require a full truckload. This could range from a few boxes weighing more than 100 pounds and exceeding 130 inches overall per box, to as much as 18 pallets.
When shipping LTL freight, you have two options: common carriers or contract carriers. Common carriers have terminals or hubs, and take shipments on "common" or predetermined routes. Contract carriers pick up multiple LTL shipments based on where the truck is going.
Although any common carrier will accept your shipment, not every one will handle your shipment from beginning to end. To increase profitability, many common carriers only serve specific geographic regions. If your shipment needs to be sent outside that carrierīs normal service area, they will transfer the shipment to another common carrier for final delivery. This practice is called interlining.
Hereīs why this is important to you: The more your shipment gets interlined or transferred to another carrier, the better the chances are that it will get delayed, lost, or damaged. The carrier might also charge more because they cannot efficiently deliver your shipment. But thereīs more
Letīs say your shipment never shows up. The carrier assures you that they delivered it — but they delivered it TO ANOTHER CARRIER who was responsible for making the actual delivery. Now you have to track down that carrier and find out what happened. Depending on the size, weight, and items being shipped, a contract carrier might be a better choice. Since freight loaded on a contract carrierīs truck usually delivers off the same truck, thereīs less chance of something going wrong.
Contract carriersī flat spot pricing also is typically less than the common carrier class rates. But contract carriers are not always readily available unless you have spent a lot of effort developing this type of carrier base. Also, most contract carriers are better suited to handle shipments that donīt require special services such as lift-gate or inside deliveries. They are better for business-to-business, dock-to-dock deliveries.
It also helps to know the different types of modes available when you are choosing a carrier. Shipments traveling more than 1,000-1,200 miles may be more economical moving on the rail rather than over the road. Your necessary transit time would be an indicator of which mode you should choose.
To determine which carrier is right for your needs, it pays to shop as many carriers as possible. If you outsource to a 3PL, you will automatically have access to a broad carrier base. Youīll be able to search a network of carriers based on the type of freight you are shipping and any special shipping requirements to secure the best possible rates.
Look for Insider Secret # 5 next month or visit www.4way.com to download our ground-breaking whitepaper.
4 Way Logistics, Inc. is a non-asset-based 3PL that provides multi-modal transportation services. Based in San Ramon, Calif., 4 Way Logistics offers a broad array of transportation options to move freight, including truckload, LTL, intermodal, air, ocean, and heavy-haul projects.
Understanding a few key insider secrets before you choose a carrier can help you avoid thousands of dollars in losses and countless hours of frustration. This column is the fourth in a five-part series designed to eliminate many of your transportation management headaches.
Insider Secret #4: Know When To Use Contract Carriers Versus Common Carriers For LTL Shipments
LTL (less-than-truckload) freight is any freight that is too large for the parcel carriers (i.e. UPS or FedEx), but that does not require a full truckload. This could range from a few boxes weighing more than 100 pounds and exceeding 130 inches overall per box, to as much as 18 pallets.
When shipping LTL freight, you have two options: common carriers or contract carriers. Common carriers have terminals or hubs, and take shipments on "common" or predetermined routes. Contract carriers pick up multiple LTL shipments based on where the truck is going.
Although any common carrier will accept your shipment, not every one will handle your shipment from beginning to end. To increase profitability, many common carriers only serve specific geographic regions. If your shipment needs to be sent outside that carrierīs normal service area, they will transfer the shipment to another common carrier for final delivery. This practice is called interlining.
Hereīs why this is important to you: The more your shipment gets interlined or transferred to another carrier, the better the chances are that it will get delayed, lost, or damaged. The carrier might also charge more because they cannot efficiently deliver your shipment. But thereīs more
Letīs say your shipment never shows up. The carrier assures you that they delivered it — but they delivered it TO ANOTHER CARRIER who was responsible for making the actual delivery. Now you have to track down that carrier and find out what happened. Depending on the size, weight, and items being shipped, a contract carrier might be a better choice. Since freight loaded on a contract carrierīs truck usually delivers off the same truck, thereīs less chance of something going wrong.
Contract carriersī flat spot pricing also is typically less than the common carrier class rates. But contract carriers are not always readily available unless you have spent a lot of effort developing this type of carrier base. Also, most contract carriers are better suited to handle shipments that donīt require special services such as lift-gate or inside deliveries. They are better for business-to-business, dock-to-dock deliveries.
It also helps to know the different types of modes available when you are choosing a carrier. Shipments traveling more than 1,000-1,200 miles may be more economical moving on the rail rather than over the road. Your necessary transit time would be an indicator of which mode you should choose.
To determine which carrier is right for your needs, it pays to shop as many carriers as possible. If you outsource to a 3PL, you will automatically have access to a broad carrier base. Youīll be able to search a network of carriers based on the type of freight you are shipping and any special shipping requirements to secure the best possible rates.
Look for Insider Secret # 5 next month or visit www.4way.com to download our ground-breaking whitepaper.
4 Way Logistics, Inc. is a non-asset-based 3PL that provides multi-modal transportation services. Based in San Ramon, Calif., 4 Way Logistics offers a broad array of transportation options to move freight, including truckload, LTL, intermodal, air, ocean, and heavy-haul projects.