LTL vs Parcel Shipping: Which is the Best Option to Maximize Your Savings?

Diana MaureFreight Trucking, General, Shipping GuideLeave a Comment

While LTL has existed within the industry for quite some time, the freight shipping industry is starting to notice parcel shipping as a more cost-effective alternative, especially for shippers with freight that weighs anywhere over 150 lbs. That said, both LTL and parcel shipping are pretty similar so it can be a challenge as a shipper to determine which option is the best option for your shipping needs. It’s important to understand the key similarities and differences between both methods of shipping.

The differences between the two focus primarily on size of shipment. Parcel packages are smaller, and can usually be lifted without additional help, they are easier to transport, and you can ship larger numbers of parcel packages in one shipping round. On the other hand, LTL packages are larger and are typically put on a pallet. But, they are exposed to fewer checkpoints and less likely to be damaged. Choosing which one is best suited for your needs is not as simple as measuring size but requires a few other considerations which will be reviewed below.

What is parcel shipping?

Parcel shipping typically involves any packages that weigh less than 150 lb and these packages must be lifted without any assistance. So, effectively this means any packages that are larger than what would be shipped using LTL.

Parcel shipments bring with them a higher risk simply because the packages can become damaged or lost more easily as a result of their smaller size. Alternatively, shippers can utilize additional checkpoints and transfers. Having additional checkpoints can allow buyers to receive more accurate updates as to the location of their shipments and accurate updates as to when that shipment will be delivered. The processing for parcel shipping is typically easier as a result of the smaller size as well.

There is a cost advantage associated with partial shipping based on the volume of packages that are allowed. As a direct result of the size, the volume of packages that can be shipped is typically higher. This brings with it a cost advantage for shippers.

What is LTL shipping?

LTL shipping focuses on larger packages. This means uniquely shaped items or bulky items that need to be shipped. Most of the time LTL shipments use pallets and they are stored in non-damaging spaces so the amount of risk associated with them is smaller compared to parcel shipping. Because of their larger size there are fewer checkpoints and this can be seen as an advantage or disadvantage based on your viewpoint. Having fewer checkpoints means that fewer people handle the package so the risk of damage or loss is limited. The fewer hands that touch the product, the easier it is to keep track of items. However, it also means that you can’t check on the specific location of a shipment with as much granularity as you can when using parcel shipping and this can be seen as an advantage or disadvantage based on where you are shipping the items.

In some cases there may be a capacity issue associated with LTL shipping because of a shortage of drivers. A lack of drivers has recently placed strain on the industry and could be detrimental to your LTL shipments as well.

Differences between LTL and parcel shipping

When comparing these two options it’s important to understand a few key differences. In addition to the size difference between these two shipping methods you also have to consider a few other things which have been briefly touched upon:

  1. First you have to consider the amount of damage and loss you are willing to risk. Each of these options brings to the table different risks and benefits. Parcel shipping brings with it the risk of a package being lost or damaged especially compared to LTL. LTL shipments are secured by pallets and are placed in spaces that are designed to prevent damage. But of course parcel shipments are smaller so you can ship higher volumes. That said higher volumes also mean a greater risk of damage or loss for your company. So, these are things you have to consider.
  2. Checkpoints and the ease of tracking may or may not be important to you. Parcel packages typically go through several checkpoints so as a carrier you get updated on the whereabouts of packages much more frequently compared to LTL shipments. However, fewer checkpoints with LTL shipments affords a greater amount of security. This also allows for your shipment to enjoy zone skipping which bypasses different carrier zones which also circumvents charges that would otherwise result from crossing multiple zones in just one trip. Realistically, the fewer the checkpoints, the safer the shipment will be.
  3. The cost advantage is the third consideration you have to make. The cost for parcel shipping is lower compared to LTL specifically because of the higher volume that is afforded with this method. Some LTL shipments are bigger and will take up more space so they come with a higher cost. This may or may not be an advantage. Parcel carriers can add additional charges as they see fit such as Saturday deliveries which come at an extra fee whereas LTL carriers wouldn’t give you those same extra fees.

Wrapping Up

All in all there are a few key differences between these two shipping methods and it’s important to understand them so that you can figure out which of these functions as an advantage or disadvantage based on your situation and your goals. The size of the package is the first thing that divides these two methods of shipping but much more than that you also have to take into consideration the cost advantage, the amount of risk, and the checkpoints that you are willing to endure.

Diana Maure
Starting in 2010 as the Foreign to Foreign Manager for LILLY + Associates Diana has worked with many international clients who ship cargo on a regular basis around the world. Most recently, Diana has joined the Business Development team, continuing to provide customized logistic solutions for her client base.

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