LTL and FTL Shipping: Which Is Best For You?

Learn about:

• What are LTL and FTL?

• Key differences between LTL and FTL shipping

• How Walmart optimizes shipping using LTL and FTL

When it comes to shipping, selecting the right freight option is crucial for your business' efficiency and cost-effectiveness. Freight carriers offer a variety of choices for transporting commercial shipments. Two widely used transportation methods are full-truckload (FTL) and less-than-truckload (LTL) shipping. Understanding the key differences between LTL and FTL shipping can help you make an informed decision that meets your specific needs.

What is LTL Shipping?

LTL shipping is ideal for smaller shipments that do not require a full truckload. Multiple shipments from various businesses are consolidated into one truck, making this option cost-effective as you only pay for the space your shipment occupies.

What is FTL Shipping?

On the other hand, FTL shipping is used for larger shipments that require the entire truck. FTL freight typically transports a single supplier's goods to a retailer's distribution center. This option ensures that your shipment remains in one truck from pickup to delivery, reducing the risk of damage, loss, and delays.

What to Consider When Choosing Between FTL and LTL 

1. Shipment Weight

LTL shipments are small in size, usually weighing between 100 and 5,000 pounds. These shipments are not big enough to occupy a whole truck and usually contain packages from multiple suppliers. In contrast, FTL freight occupies a whole truck and is much larger, usually weighing 20,000 pounds or more.

If an order weighs between 5,000 and 10,000 pounds, you have a choice to ship it via "volume LTL" and "partial truckload." Volume LTL is a method of shipping that leverages under-utilized trailer space, while partial TL is simply an FTL shipment that doesn't take up the entire truck.

2. Shipping Time

If a business needs to get something shipped fast, FTL could be the best option. LTL shipments have multiple stops because they carry loads from different businesses, and so their delivery time is longer. Generally, FTL shipments use the same truck to collect and deliver, resulting in quicker deliveries.

3. Price of Shipment

Because LTL shipments do not occupy the entire truck, businesses only pay for the space their products fill. The rest of the space is used by shipments from other companies. Thus, LTL works out to be much cheaper than FTL shipments. FTL requires businesses to hire the entire truck space, making it more expensive. 

4. Handling Needs

Fragility and handling of the shipment are also crucial aspects to consider at the time of transportation. During FTL shipping, a company's cargo remains on one truck, from its pickup to   delivery. This minimizes the risk of damage or misplacement. However, LTL shipments may change vehicles or undergo multiple transfers before delivery. This makes them vulnerable to damage or misplacement.

How Walmart Optimizes Shipping Using FTL and LTL

Walmart's strict rules ensure that shelves are filled, and goods are delivered just when the retail stores need them. The retail giant has a Must Arrive By Date (MABD) provision, which states that suppliers must deliver goods to the store within a fixed delivery window, depending on the shipment type. At the same time, they also must maintain high invoice accuracy.

Related Reading: OTIF -- How To Meet Delivery Appointments

Walmart enhances the efficiency of its suppliers by engaging in a practice called "vendor pooling," which converts regular LTL shipments to FTL shipments. Vendor pooling groups together multiple vendors' shipments onto one truckload and only occurs when the suppliers utilize the same warehouse and logistics companies.

Walmart will submit purchase orders for suppliers within a particular vendor pool, sending copies to the warehousing company, which then delivers goods for all of those suppliers from one full truckload. With other Walmart suppliers, businesses can fill up a full truckload (FTL) from one warehouse and decrease the risk of LTL shipping. Sometimes, Walmart will also work with suppliers toincrease their order quantities so that the order will fill a full truckload instead of relying on LTL shipping. 

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