13 January 2023
Shipping less than truckload (LTL) opens shippers to vulnerabilities with inefficiencies and the surprise fees that accompany them. Discover where these hidden costs come from and how to avoid them.
What impacts LTL pricing?
LTL pricing is based on total weight, distance traveled, and density; however, this doesn’t take into account tariffs set by carriers.
Tariffs are what shippers pay to move various types, or classes, of cargo. These prices are uniform for the entire industry and usually last an allotted period of time, typically one year. The class of cargo will determine the cost of shipment.
Here are the main factors that dictate class:
- weight or dimensions of the freight
- features that affect transportation efficiency (e.g. perishable, hazardous, or fragile freight)
- additional pickup and delivery services such as special equipment like a liftgate, longer wait time to unload shipment (detention fees), etc.
If tariffs are set, why can’t shippers always anticipate LTL pricing? And why are there so many hidden fees? Follow along to learn the most common factors that skyrocket LTL’s shipping costs and leave shippers paying far more than expected.
4 common reasons LTL shipping costs more
An accessorial fee is a charge for extra service outside the standard agreement a carrier provides during shipment. Incorrect or missing measurements and classifications are inconvenient for carriers and can cost them time, fuel, and money. To solve this problem, carriers charge shippers extra fees to make up for their loss. And these fees aren’t small.
Common reasons for accessorial fees:
- Liftgate: a hydraulic/electric platform needed to raise or lower freight when a shipper doesn’t have a dock
- Redelivery, layovers, and wait time: fees applied when the consignee is closed or unavailable to unload
- Bill of lading (BOL) changes: edits on an incorrect or incomplete BOL, including NMFC code, class, or volume ID
- Reclassification and reweigh: when a carrier corrects inaccurate class or weight information provided by the shipper
- Limited access: pickup/delivery locations that require extra planning by the carrier (e.g. smaller truck, additional security stops, gates, etc.)
- Driver load and unload: when the driver assists in unloading the freight
- Oversized and overlength fees: significantly larger-than-normal freight shipments
- Hazardous materials: when the shipper didn’t quote freight as hazardous but a carrier deems it to be
- Truck ordered not used (TONU): when a shipper isn’t ready for the freight to be picked up
- Storage: when a carrier has to store freight due to shipment refused, closed delivery location, incorrect address provided, unavailable consignee, etc.
- Detention: time-based fee that starts after a driver waits at a location for a given time
To lessen the chance of being charged accessorial fees, shippers should provide accurate, detailed information upfront to pay as close to the freight quote as possible.
A shipment’s linear feet is a one-dimensional measurement of 12 inches. Linear-foot caps determine how many linear feet carriers are willing to haul per shipment.
Carriers often set linear foot limits to make hauling freight easier–large, bulky freight is simply more challenging to haul than smaller freight. Linear-foot caps limit options for midsize freight, forcing shippers to utilize other, more expensive methods like truckload (TL) shipping.
Flock’s study with Drive Research revealed that linear foot restrictions forced over 2x more shippers than 2021 to submit request for proposals (RFPs) for TL instead of LTL or VLTL. Additionally, almost 3x more shippers than reported in 2021 booked TL in 2022 because they were unsure another mode would deliver on time.
Thanks to factors like transloading at terminals, the antiquated, inefficient hub-and-spoke nature of LTL makes it ripe for late deliveries and damages—and the associated fees. When shipments are late, shippers not only risk the added financial burdens of direct costs from a buyer enforcing a late fee, but also the indirect costs of upsetting customers by not meeting demand.
According to Flock’s study, 88% of LTL shippers in 2022 reported delays of 1-2 days and one in three shippers were negatively affected by on-time-in-full (OTIF) regulations — with an average OTIF fee per shipment of $477.
Here are some common factors that add to transit time and cause delays:
- industry inefficiencies like transloading at multiple hubs
- indirect or unoptimized routes
- waiting to fill an entire truck before shipping
- global influences like supply chain gridlocks
- tight capacity causing carriers to deliver on their timeline, not the shippers
LTL shipments involve more handling due to transloading at terminals, meaning the risk of damage is higher than other shipping modes. Shippers often have to pay for product replacements and additional shipping to make up for those losses.
In fact, 86% of LTL shippers in 2022 had to replace and reship goods due to damage, with an average cost per damage claim of $4,503. Carriers only covered 66% of damage claims, making the average cost of uncovered damage claims $1,511.
Save more with shared truckload
With Flock Freight’s shared truckloads (STL), you can regain control of the cost of shipping your freight. By combining freight from multiple shippers through STL, our FlockDirect® service ships midsize freight terminal-free with truckload-quality speed and service–without the hidden fees you’ll find with traditional LTL shipping costs.
Here’s why shared truckload beats traditional LTL every time:
- No surprises on cost. The price given is the price paid—guaranteed.
- By optimizing for efficiency, our patented technology ensures no accessorial fees.
- With no linear foot caps, STL sends mid-size, 10-44 linear feet freight—no matter how bulky—with ease.
- Thanks to efficient hubless routes, STL prevents late fees by delivering on time 30% more often than traditional LTL.
- By staying on one truck to the destination, STL ships 99.8% damage-free—reducing freight claims.
- Proactive communication and transparent updates on shipment whereabouts ease shippers minds on meeting customer demand.
- Maintain complete control of pickup and delivery dates—while letting us get the appointment scheduling handled for you.
Flock Freight’s patented technology saves shippers money—and headaches—with consistent and fair pricing, reliable delivery, and proactive communication. It’s high-quality, high-efficiency shipping not found anywhere else. Start shipping with Flock today.