Less-Than-Truckload

Less-than-truckload, or less-than-loan (LTL), is a shipping service for relatively small loads or freight. Less-than-truckload services are offered by many large, national parcel services as well as specialized logistics providers. These services can accommodate the shipping needs of countless businesses that need to move goods frequently and in smaller batches. Less-than-truckload shippers offer economies of scale so that freight costs of individual shippers are minimized.

Companies providing less-than-truckload services can range from specialized services developed for this particular need for, say, a business that serves urban markets in a region to large, national truck transportation companies that carry a client company's goods across the country. The transportation companies combine the loads and shipping requirements of several different companies on their trucks, making it more cost-effective than hiring an entire truck for one small load. Less-than-truckload shipping requires a high degree of coordination and sophisticated logistics planning for maximum profitability. Information technology systems are mission-critical for both shippers and customers.

Less-than-truckload services have gained increased importance in today's economy. With the inexorable rise of e-commerce, quick shipments of products to customers are imperative for companies competing for sales. This means that their products must be inventoried in warehouses or distribution centers close to customers at all times. Often, a company will not wait until a wholesaler is running low on product inventory so that it can ship a full truckload of replenishment. Instead, it will more frequently ship less-than-truckload to mitigate the risk of potential loss of sales from lack of inventory for its distant customers. The shipping costs of its goods may be incrementally higher and the delivery time may be longer than for a dedicated full truckload, but the trade-off is more dependable inventory availability.