LTL Carriers offer a cost-effective service that moves freight that does not fill up an entire trailer. Less than truckload (LTL) shipping has become more popular over the years as better processes and tracking is put into place, which maximizes the supply chain.
LTL shipping is generally used for any shipment that is under 10,000 pounds and under seven pallets. If your freight falls into this category, then it can be shipped via LTL along with other shipper’s freight.
There are several benefits to using LTL and consolidated shipping, but today we are looking at the LTL carriers, the market, and what role 3PL’s play in it all.
The LTL Carrier Market
The LTL market is quite unique and varies from full truckload, refrigerated, or any other mode. One major difference is that the market is much more niche. The shipping industry, as a whole, makes about $800 billion in revenue. LTL shipping makes $45 billion or 5.6% of the total.
Additionally, there is a higher barrier of entry to become an LTL carrier. In order to become an effective LTL carrier, you are going to need multiple trucks to run between the terminals that have been set up.
There are nearly a million carriers out there operating and 91% of them operate 6 or fewer trucks. This means that only 9% have a POSSIBILITY of running LTL operations.
This niche market and high barrier have resulted in a much more consolidated market. Where fewer companies own a much larger percentage of the market. Because of this, building a strong relationship with an LTL carrier is absolutely vital.
The Role 3PL’s have on LTL Shippers
Due to the LTL market being more consolidated many shippers opt to handle the relation and LTL shipping themselves. However, the complexity and processes of LTL shipping should not be taken lightly. It is the navigation of the process that 3PL companies are able to excel at.
Additionally, 3PL’s can typically offer discounted pricing due to the economies of scale. 3PL’s are moving LTL freight for many other companies so they have more negotiation power than the shipper will.
Along with lower pricing, the shipper also gains access to better reporting and technology and a team of experts working just for them. With all of this in place, they can focus on their own operations and do what they do best.
The Role 3PL’s have on LTL Carriers
Now that we have covered the reason that shippers would work with 3PL companies, why would the LTL carriers? Well, for one, there’s no reason not to, even if they sign up to ship for a 3PL they can still work with shippers directly. It’s a no-risk situation that can only result in more business.
And since more freight passing through means more efficient operations, it is very advantageous for LTL carriers to get as much freight moving through as they can. By partnering with a 3PL, LTL carriers gain access to multiple businesses and can pick and choose the freight that works for them.
Get Your LTL Quote Today
Becker Logistics is ready and waiting to ship your LTL freight. We have been in businesses for over 24 years and have developed countless carrier relations that benefit our customers. You can either reach out directly via phone or email or request a quote online and an associate will get back to you asap.