Cost-Effective LTL Shipping: Expectations vs. Reality

Why is LTL freight shipping so expensive in 2022?

Because of the pandemic, e-commerce is at an all-time high, but so are LTL shipping costs. If you’re a business owner in 2022, then you’ve most likely stared in disbelief at the cost of transporting your less-than-truckload (LTL) shipments from one place to the other. Several factors have contributed to LTL freight cost increases in 2022, and unfortunately, there is no quick-fix solution.

Shortage of truck drivers

Truck drivers quite literally drive the supply chain for every industry. However, the American Trucking Associate estimates a shortage of 160,000 truck drivers by 2030. With fewer drivers available to move freight in 2022, trucking companies have no choice but to increase wages to attract qualified drivers. Companies must transfer the extra costs of paying drivers to their customers to retain profit margins, thus increasing their shipping costs.

Fuel costs

Rising fuel prices increase the operating costs of freight companies, forcing them to increase their shipping rates or suffer some losses. Besides the effect of fuel prices, the peculiarities of LTL shipping can cause a hike in the overall fuel consumption of shipping companies. In full truckload (FTL) shipping, the entire trailer-load belongs to a single customer; the truck is loaded up with the shipment and driven directly to the destination without any pick-ups or drop-offs along the way. On the other hand, LTL shipping involves making several detours before getting to the final destination. These detours increase fuel consumption which, in turn, leads to an increase in LTL freight shipping costs.

COVID-19 pandemic

Much like every other industry, the shipping industry is still struggling to recover from the effects of the pandemic. Lockdowns, movement restrictions, and reduced employee availability disrupted supply chains worldwide, causing delayed shipments and increased freight rates. Since the pandemic also caused a shift to online shopping in the general populace, the increased demand for deliveries led to higher LTL shipping rates.

Why do carriers not always pick up on time?

Unfortunately, late pick-ups are very common in LTL shipping. Although trucking companies can plan and track their routes, there is no telling the kind of situation truck drivers will encounter on the road. Here are some common reasons shipment carriers do not always pick up on time:

Traffic and road construction

Even with route mapping and GPS, traffic and road construction is not entirely avoidable. Accidents and poor weather conditions are just two unpredictable causes of traffic. If the truck assigned to carry your shipment gets stuck in traffic, you can expect that your pick-up will be delayed.

Human errors

Humans are fallible and, thus, prone to errors. For example, misspelling your pick-up address or filling in the wrong zip codes can make it difficult for a carrier to find your pick-up location on time. Be sure to double-check the paperwork attached to your load before submitting it to a carrier.

Mechanical problems

While good trucking companies do their best to maintain their vehicles, mechanical difficulties may still occur from time to time. When a delivery truck develops a fault along its route, expect pick-ups to arrive later than usual.

Other customers

Since the business model of LTL shipping involves picking up and delivering shipments for several customers, a problem with one customer can cause a delay in the pick-up of other freights. For example, a carrier may not pick up your shipment on time because another customer spent too much time loading their shipment into the truck.

Expectations vs. Reality

Expectations do not always meet reality, and there are several situations where this statement rings true for LTL shipping. Plan ahead, but recognize that problems may arise and be flexible.

Expectation: Pick-up and delivery times are guaranteed

Reality: Pick-up and delivery times for LTL shipping are not as clear-cut as you’d expect; they are merely estimations. Since LTL carriers service many customers at once, providing a down-to-the-minute time prediction is tedious, if not impossible.

Expectation: The paperwork does not need much attention

Reality: One of the primary causes of missed pick-ups and deliveries in LTL shipping is incorrect documentation. When filling in the paperwork for your shipment, ensure that you provide the correct information. The information in your paperwork determines your shipping rate and the amount of care your shipment will receive during transit.

Expectation: LTL shipping is cheaper than full truckload shipping

Reality: Since LTL freight shipping allows you to ship materials without paying for a full truckload, many assume that LTL shipping is low-priced compared to full truckload shipping. The truth, however, is that LTL shipping is more expensive on a per unit, per mile basis. If you have enough product to fill an entire truckload, ship FTL.

GoShip is Here to Help

With the current surge in LTL shipping rates, gunning for LTL freight cost-effectiveness in 2022 may seem like a daunting task.

Freight shipping marketplaces like GoShip help small to mid-sized businesses solve their shipping problems by connecting them to a large base of reliable carriers. Our online quotation tool gives you free instant quotes based on the type of truckload, pick up and delivery locations, and pick up time.

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