How Volume LTL Can Improve Your Supply Chain

October 5, 2018

If You Haven’t Explored Volume LTL, You Probably Should.

You’re standing on the loading dock, staring at ten pallets of widgets. The door rolls up, and an empty 53’ trailer slowly backs into the bay. The forklift operator quickly loads the ten pallets. They look so small and lonely inside the cavernous van. You shake your head and sigh, knowing you paid for 30 linear feet of trailer that will be shipping air.

You could have used Volume LTL to ship your widgets.

 

What is Volume LTL?

Volume LTL is method of shipping that leverages under-utilized trailer space in a less than truckload (LTL) carrier’s network. It’s ideal for shipments that have too many pallets for standard LTL shipping, but not quite enough to require a full truck. If Goldilocks had to ship something, she would use Volume LTL—it’s not too big, not too small, but just right.

 

How does Volume LTL work?

Most LTL carriers operate on a hub-and-spoke model, where a local driver will pick up several different shippers’ pallets and drop them off at a regional hub for sorting. The carrier sorts and consolidates shipments based on destination, then transfers them from the origin hub to the destination hub. A local driver will complete the final mile, making a series of multi-stop deliveries around the region.

LTL networks are large, dense and complex—carriers’ ability to offer competitive pricing depends on it. While they strive to keep every truck fully loaded every time it’s on the road, the vast amount of moving parts creates empty capacity, no matter how efficient the network. Carriers use Volume LTL to fill in the gaps, reducing empty miles and generating a little extra cash flow.

 

What are the benefits (and limitations) of Volume LTL for shippers?

The Good:

It’s cheaper (obviously). Moving larger LTL shipments via Volume LTL is usually less expensive than traditional LTL or full truckload. Why? Efficiency is the key to operating intricate LTL networks. The larger shipments create somewhat of a logistical challenge—it can be difficult for carriers to predict exactly when they’ll have enough trailer space for 12 pallets. Yet those larger shipments are perfect for empty backhauls, so carriers want to have access to them. In exchange for flexibility, LTL carriers offer lower rates.

It’s safer. Volume LTL shipments often stay on the same trailer from pick-up to delivery. Since freight is not usually handled as much as standard LTL during transit, it can reduce the likelihood of damaged product.

It adds capacity. By leveraging LTL carriers’ empty backhauls, shippers are in effect tapping into a different capacity pool. In today’s market, where both the truckload and LTL markets are experiencing tight capacity, Volume LTL presents an interesting alternative. It is an excellent supplement to a shipper’s LTL and truckload networks.

 

Interested? Contact us and find out if Volume LTL is the right fit for your supply chain.  

 

The Bad:

It can be slower. As discussed above, precise planning for larger LTL shipments can be tricky. Volume LTL shipments tend to move at the carrier’s convenience, based on their backhaul availability. If your shipment has a strict must-arrive-by date, Volume LTL is not a good option.

Lower cargo liability limit. Typically, the liability limit for cargo loss or damage is no more than $1 per pound, compared to $5 to $25 for standard LTL.

 

What makes a good volume LTL shipment?

Though business-to-business (B2B) shipments are ideal, and commodities with lower cargo value that are either very high or very low in density fare the best, most commodities are candidates for Volume LTL shipping. The most important factors are size and/or weight. These are not hard-and-fast limits, but general guidelines:

 

What is the difference between Partial Truckload and Volume LTL?

Volume LTL and partial truckload are often lumped into the same category. Though conceptually similar, there are a few key differences, chiefly, they tap into different carrier networks. Volume LTL uses—you guessed it—LTL carrier networks, while the partial truckload uses full truckload carrier networks. Partial truckload can offer compelling cost savings, but consistent capacity can be very difficult to coordinate.

 

Let’s look at an example.

Rates are approximate, based on current market conditions, and are meant to be illustrative only.

  • Freight: Canned Foodstuffs
  • Pallet Count: 8 non-stackable
  • Dimensions: 40x48x70
  • Weight: 16,000 lbs
  • Origin: 19132 (Philadelphia, PA)
  • Destination: 90059 (Compton, CA)
  • Approximate Truckload Rate: $6,200
  • Approximate LTL Rate: $2,600
  • Approximate Partial Truckload Rate: $2,200
  • Approximate Volume LTL Rate: $2,100

 

Why should I use a broker to move Volume LTL?

If you’re considering Volume LTL, working with an experienced freight broker is a compelling option. Let’s look back to the basic concept of Volume LTL: carriers are looking to fill empty backhaul capacity with shipper’s freight. Filling that unmet need is literally the reason freight brokerages came into existence. Since filling backhauls is not necessarily a core function of an LTL carrier, they turn to brokers—with their large and diverse customer portfolio—to source options. It expands their reach while simultaneously streamlining the process.

The same is true from a shipper perspective. Instead of establishing tariffs and maintaining relationships with multiple LTL carriers, they can rely on a broker. Brokers can simplify operations and cast a wider net, ensuring the most competitive price and most available capacity. For this more complex, niche service, working with a broker is probably your best option.

Why Coyote?

You’ve learned about Volume LTL. You understand how it works, and you’ve hopefully found some opportunities in you network. Now what?

As one of the largest logistics service providers in North America, Coyote has established relationships with a wide range of LTL carriers and we consistently source Volume LTL capacity with them. We leverage our technology for quick quoting and communications, getting shippers the rates and capacity they need. Our specialized LTL operations team manages each load, ensuring we meet your expectations.

Working with Coyote for your Volume LTL needs can help save you money and make your life easier. Contact us now to find out how.    

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