When talking about road freight transportation, there are two ways on how to ship your goods on trucks, by either utilizing Full Truckloads (FTL) or Less Than Truckloads (LTL). The two terms and in the same vein, business models, have one unifying factor – that all of a customer’s cargo, however much of it there is, is loaded onto a truck.
In terms of the market in Europe, as a report commissioned by the European Commission Innovation and Networks Executive Agency (INEA), the LTL market “amounts to only five percent of the total transport market but stands for a much higher share of value which shows the importance of this type of cargo,” outlines the report published in 2018.
Benefits and drawbacks of LTL
The report also indicated that LTLs still have the potential to grow further, as “the reduction of stocks in production and the increasing e-commerce with accompanying decreasing shipment sizes.” The size of the shipment, which does not fill a trailer up to the brim, can be considered up to 20 pallets, pointed out by the author of the report.
However, there are different LTL shippers and carriers. The smallest of the bunch can be considered those carriers that help complete the final legs of the delivery, namely parcels or small packages, to consumer households or to retail spaces. Such deliveries are typically associated with e-commerce or retail items that are not easily carried by the consumers themselves. Then there are freight companies that combine multiple shipments onto one full truck load, picking up them from multiple locations and delivering them to different locations for different, or in some cases, the same customers. Finally, some LTL carriers offer set routes and services from certain regions, for example from France to the United Kingdom and vice-versa.
Typically, LTL shipments provide a lot of benefits for smaller companies that produce either low volume or low weight and low-value goods, as they would not utilize the full capacity of a trailer, possibly paying a premium for unused space onboard a truck.
Once again, e-commerce can be the perfect example of an LTL customer, as the typical e-commerce item does not have an expiry date.
Goods that have no expiry date could be typically found on a trailer of an LTL carrier. Since the transit times can be much longer, due to multiple pickup and drop-off locations, the total available working hours of a truck driver has to be considered as well. Cargo that has unusual dimensions, such as piping used for homes, floor material such as laminate, or any other odd-sized product, can also be found on LTLs, as once again the question comes back to the efficient usage of trailer capacity.
Furthermore, some LTL carriers operate by utilizing their hubs, namely collecting loads from different customers to a single location and then re-arranging them by route or type of cargo, which again, increases the transit time. Still, purchasing a few pallets of capacity on a trailer is a sensible decision for those that are looking to carry their high shelf life and limited-volume cargo. Less-than-truckloads are the much more economically reasonable option for such shipments, and thus, definitely have their place in the market, and will continue to do so.
Full truck load is the way to go?
The term of a full truck load (FTL) is pretty self-explanatory, as it means that the palettes fill the trailer up to its payload limit, which in Europe, is typically 24 tons. Compared to LTLs, FTLs describe the goods that are carried on a truck, when talking about road freight transport.
FTL is an ideal option for those shippers that have enough volume to cover the full capacity of a trailer, as well as those that require time-sensitive deliveries, such as in fresh produce logistics. The main benefit of filling up a truck with a single customer’s cargo is that delivery receives the full attention of a carrier, not only saving time but a carrier being able to offer a fully tailored solution. Those solutions range from two-driver trucks, extra safety features, such as secure parking locations, to sustainable options that other customers on an LTL delivery might not be willing to utilize.
Having a trailer dedicated to you also means less risk associated with the transport process, as there are fewer instances of loading and unloading, where potential damage to cargo can be done. Furthermore, “ loading and unloading points are most risky for deception, meaning that a truck driver with a fake identity picks up a load from the consignor (and disappears with it), or a warehouse worker with a fake identity directs the truck to a fraudulent unloading point (and ultimately steals the cargo),” pointed out a report by the European Commission (EC) on the security guidance for the commercial road freight transport industry. Naturally, as there are more loading and unloading points, the risk grows equally.
Usually, FTLs are utilized by such industries as food and seafood production, pharmaceutical production, as well as Fast Moving Consumer Goods (FMCG), and Retail transport, to name a few, where the goods either have high production volumes or have to move quickly, with fewer risks for the cargo to mainly lose its qualitative attributes. While e-commerce could be associated with lesser loads, the massive growth of the industry in recent years, particularly fueled by the pandemic, might tip the scale, especially as the large e-commerce companies look to move their cargo between multiple warehouses to fill their stock nearest to the customer.
Flexibility is key with FTLs, as pointed out above, the only delivery on the truck is from a single customer, which also means that even if a client requires multiple unloading or loading locations to fill the trailer with his produce, a carrier is able to provide such a service.
Although FTLs are a more expensive option to move your cargo across Europe compared to LTLs, the benefits and the reduced risks also provide a lot of advantages compared to single-number pallet shipments. Receiving a tailored transport solution can help you not only to move your cargo much quicker but also safer and more efficiently, helping you to reduce your costs by tweaking the process to perfection.