The Complete Guide to Truckload, LTL and Expedited Freight Capacity

It can be overwhelming for shippers to find the right freight solution because there are so many options. In fact, according to the 

TOP

Full Truckload

As the graph on the overall for-hire indicated, full truckload is the largest for-hire mode by market share at 46.4%. Whether it be dry van or refrigerated, shippers will experience quicker transits of their freight from origin to destination under this transportation mode versus the other 53' capacity option, intermodal.

Freight is typically configured and stretch-wrapped on pallets, then loaded into the trailer for transport. Shippers can also floor load or use slip sheets to load out the cargo trailer. Floor loading and slip sheeting a trailer increases the total usable cubic foot capacity for a trailer because it allows more product to be loaded because of the reduction in pallets space and weight of those pallets. Conversely, slip sheeting and floor loading increases the time for loading and unloading the product.

When selecting a freight providers, shippers can access a diverse set of options for truckload shipping (dry, temperature-controlled or Haz-Mat capacity) through a variety of the top freight brokers and logistics providers, although technology has really allowed freight brokers of all sizes to access the same capacity and price so it gets down to what is the best fit for the company.

Shippers can also access the truckload directly, but there is a limit to the total number of motor carriers they can manage independently.

Freight brokers or logistics service providers (LSP) are more efficient at tapping into the total market through their technology and staff that can be leveraged cost-effectively across a larger base of customers and revenues they have through their non-asset business model.

Not only is there a speed factor of finding the capacity through a non-asset provider, but also in their ability to quickly vet the carrier for safety and legal operating authority, along with putting the carrier under contract. All important factors to ensure the load is on the road legally.

LTL (Less-than-Truckload)

When shippers have freight shipments that are not large enough to fill the full capacity of a 53’ trailers they turn to LTL or less-than-truckload. Under this freight mode of shipping, the motor carrier aims to consolidate several LTL shipments from multiple shippers into one 53’ trailer by sweeping local and regional distribution centers that are then brought back to its transload cross-dock to load out the line hauls for the destination cities. Once at the destination cities, the loads are then transloaded at another cross-dock location to then be sent out on local deliveries.

There is more to the LTL model, which is what the industry calls a hub-and-spoke network operation, but this summary should be enough to get you started.

Larger shippers can do their own consolidations by using a transportation management software (TMS) platform that optimizes its freight routes and rates to develop the most efficient and cost-effective load plan for the day’s shipments.

Freight consolidation is a logistics freight strategy where a shipper combines multiple LTL shipments within a particular geographic region into a truckload or intermodal that is then line hauled to a destination point where the shipments are broken down and shipped LTL to their final destination. Utilizing an LTL freight consolidation program brings with it many benefits that will be touched upon later in this guide.

Another freight service mode option is expedited. There are some industries that live on expedited freight, such as medical and JIT operations. This freight mode is the more expensive option for shippers, so our recommendation is to do all that is possible to limit expedited use which can include planning ahead, more communication and get teams involved to help them understand the cost implications this mode has on its budgets.

With the introduction of the two primary modes of freight transportation used within the US behind us, let us further unpack the topics of cost, comparison and other topics associated with how shippers utilize the various OTR (over-the-road) options to optimize their logistics and supply chains.

Truckload v. Less-than-Truckload (LTL)

As touched upon before, no freight mode is arbitrarily better than the other. Diversification is the only free lunch in logistics, so it is important to consider every freight mode and mix of modes to develop the best logistics strategy that meets a shipper’s requirements.

Assembling the best load plan for the day is essential in developing the most efficient and cost-effective method for a shipper to move its freight. The optimization process is best accomplished through a transportation management system (TMS) where a shipper’s freight is optimized on both rate contracts and mode that will meet the required pick-up and delivery schedules.

Modal conversion is where the biggest savings is derived in freight savings optimization. The purpose of making the transition between freight methods changed the way shippers move freight efficiently. One of InTek’s biggest strengths is helping shippers in modal conversion from truckload to intermodal shipments. By leveraging the versatility of truckload, alongside the efficiency of rail transportation, modal conversion from truckload and intermodal is simply put, access to long-term savings, amongst several other benefits.

What we would call the “pyramid of modal conversion” is listed below where the mode on the top is always being evaluated by TMS systems to consolidate into a mode below:

• Small Parcel
• LTL (less-than-truckload)
• Truckload
  
• Intermodal

In both truckload and LTL, it is impossible to deny the impact that “big data analysis” has had in transforming the freight cost savings.

Modal conversion from truckload to intermodal has tremendous savings opportunities for shippers that can work with an additional transit associated with intermodal.

LTL cost savings through big data optimization can be attributed to the data analysis process capabilities of Transportation Management Systems (TMS). Big data also provides companies with the ability to analyze their full logistics and supply chain network for freight savings and KPI improvements.

Big data combined with the capabilities of a TMS brings several benefits to a shipper’s LTL and truckload freight and logistics network.

Increasing Efficiency in the “Final Mile Delivery”

The final mile delivery of any mode is the most inefficient and therefore costly. The connectivity in today’s TMS systems improve the capabilities of shippers and logistics service providers ability to drive out those inefficiencies. Simply put, knowledge is power, and the knowledge collected through big data is a powerful tool in the shipping analysis process, from origin to final destination.

Reliability Through Transparency

The improvements in a logistics and supply chain brought together in the mountains of data the modern TMS can quickly summarize make the most complex simple. The operators behind the screens can then see the transparency in the data to make better decisions to ensure the best cost and service is part of the equation every moment of the day.

By automating away what is operating well in the logistics network, the TMS gives a “bird’s eye view” of the exceptions that need attention to meet the RAD date, required arrival date. The elimination of the noise puts a laser focus on the issues that drive up costs while driving down performance and through the transparency comes the reliability.

Route Optimization

Transportation Management Systems (TMS) play a large role in the success of route optimization for all freight modes, but in particular, in the performance of LTL and truckload shipments as these freight modes are typically the largest share of moves within a company’s supply chain.

By utilizing a TMS and the data it collects, carriers can allocate resources in a more efficient manner. Once the freight is in motion the TMS will continue to provide the feedback to keep the freight on its course for on-time delivery. Putting too many resources, such as moving several LTL on the same O/D pairing on the same day versus consolidating them all into one truckload is increasing the cost of the freight lane and not capitalizing on efficiencies available within the day’s load plan.

Legal Weight Permitted to Load Cargo

Loading a truck more than it is legally allowed to be carried on the interstate is … well illegal. Public safety is number one and the Department of Transportation (DOT) takes its responsibility to ensure the roads are safe very seriously. So, if the load leaves your facility illegal, there is the potential of financial costs being levied for DOT fines; rework charges to make the load legal; delays in shipping on-time; and the possibility for huge lawsuits if the shipment that was loaded heavy were to be involved in a fatal accident.

The rule of thumb for each 53’ freight mode is what we have outlined below, but know there are exceptions to the rule.

• Dry Van Trailer: 44,000 to 45,000 pounds
• Intermodal: 42,500 pounds
• Refrigerated Reefer Trailer: 42,500 to 44000 pounds
• Flatbed Trailer: 48,000 pounds of cargo

For more on the topic of weight read: "What is the Legal Weight Shippers Permitted to Load Cargo?"

Logistics professionals are constantly trying to solve the price, capacity and service equation for their stakeholders. With that said, no guide would be complete without covering the topic of pricing.

Cost Components & Requirements for Pricing

There are essentially three cost components of truckload and LTL shipments:

• Base Rate (Line Haul)
• Fuel Surcharge
• Accessorial Fees

• Origin/Destination Zip Codes
• Weight, Pieces and Dimension of the Shipment
• Commodity
• Lead-Time
• Fuel Costs
• Transit Requirements
• Special Pick-up & Delivery Requirements that Drive Accessorial Charges
• NMFC Code (for LTL only)
• Type of Rate: Spot, Contract or Special Project Rates

Pricing Options

While there are specific details required to price freight, there are also various pricing schema to best match the freight capacity requirement at the best price.

Types of Freight Pricing

Contract

Contract pricing provides a guaranteed rate when the motor carrier has the capacity to move the load, as required by the shipper. The rates are typically in place for 12 months. The vast majority of shippers tend to do an annual RFP in the 4th quarter to match up with the financial budgeting process.

While we understand the financial teams desire to budget in the 4th quarter, it is typically not the best time of the year to go out for bid.

The reason for the recommendation is logistics providers tend to price what they see in front of them versus what is actually happening in the market and with the 4th quarter being a high watermark in freight volume the provider is pricing during a more constrained market.

Spot

Unlike contract pricing, spot pricing is the price a freight rate providers offers for shippers at a specific point in time to move freight. Rate is obtained based on the market conditions in which the freight will be moved and the rate is requested, so the supply and demand of the day drives the spot price for immediate settlement.

The dynamic nature of the spot rate can be tracked by a TMS where it compiles all of the freight load boards on a macro basis to find the best rate and freight capacity. Additionally, motor freight carriers, freight brokers and LSPs typically keep themselves close to the market and educate themselves daily on where the issues reside.

Special Project

Project pricing is utilized for, as the name indicates, special projects of peak demand requirements. Special projects entail shipments with volume outside of what would be considered “expected” quantities.

Project pricing paves the way for firms to take advantage of favorable freight rates over a shorter period of time with guaranteed volumes for a freight broker or motor carrier to dedicate capacity to the shipper.

Volume

Volume shipping pricing is associated with LTL shipments that fall outside the typical less-than-truckload parameters, but not large enough to fall under full truckload parameters.

Volume LTL pricing warrants certain conditions met, including a shipment that is 1) minimum of 5,000 pounds, 2) greater than or equal to 6 pallets, and 3) takes up to 12 to 32 feet of trailer space.

With freight cost being one of the three pillars of a logistics professional, a great read to further dive into the costs associated with moving freight is How to Negotiate & Execute Best Freight Rates: Comprehensive Guide. This article provides the key components and process steps required to obtain the most freight capacity at the least cost.

Definition of Motor Carrier

A motor carrier is an asset-based freight provider entity that arranges the transportation of property for compensation. A motor carrier owns the assets and is primarily on the insurance for the freight they move.

According to the US Department of Transportation, there are over 700,000 motor carrier companies, with 91% operating 6 or fewer trucks and 97.3% operating fewer than 20 trucks.

Definition of Logistics Service Provider

Logistics Service Providers, or 3PL (third-party logistics) providers, are non-asset logistics and supply chain entities shippers leverage to manage a company's warehousing, distribution, and transportation of freight.

While comparable to freight brokers, because they run under the same type of FMCSA operating authority, LSPs typically operate a higher-end technology platform, have a larger knowledge base and offer additional services than that of a freight broker.

LSPs have a “big picture” logistics and supply chain strategy with their top tier transportation management software (TMS) and BI (business intelligence) to maximize its people, technology, processes and knowledge of the industry for more complex shipping solutions.

Definition of Freight Brokers

A freight broker is a non-asset freight provider entity that arranges transportation of property on a shipper’s behalf for compensation. A broker does not have the assets to transport the property themselves and does not assume responsibility for the property, therefore, are secondary on insurance through a contingent cargo insurance policy.

There are over 17,000 freight brokers licensed in the United States. It is important to remember both freight brokers and logistics service providers (LSPs) operate under a brokerage authority.

To determine whether your freight provider is a broker or a motor carrier and operating legally all one needs to do is go to the Federal Motor Carrier Safety Administration (FMCSA) site and input the providers USDOT and MC numbers.

Comparison Between Motor Carriers, Freight Brokers and LSPs

There are a number of differences between a motor carrier, freight broker and logistics service provider that are worth noting. The intention of the comparison is not to say one entity is better than the other, but to note the differences so a logistics professional can determine the best provider for the issue to maximize value and service.

Method of Moving Freight

Motor carriers physically own the assets for the freight they move for their customers, which could be a shipper, freight broker or logistics service provider.

On the other hand, freight brokers do not own the assets for the freight they move for their clients. With that said, their market value is service. Logistic service providers have the same value add, however, LSPs do bring with them a more in-depth vision of the logistics and supply chain industry and technology.

Legal Possession of the Freight

Motor carriers take legal possession of freight they move for companies.

Freight brokers and logistics service providers, on the other hand, do not take legal possession of the freight.

Cargo Liability Coverage

It is the motor carrier’s responsibility for loss and damage once they sign the bill of lading (BOL) at pick-up until the receiver signs it the delivery location. It is important for the receiver to not make the signing of the BOL a “rubber stamp” process because if they sign it free and clear of damage there will be no recourse after the fact.

Freight brokers, on the other hand, do not take responsibility for the cargo onboard the motor carrier they contract for the freight it moves and is therefore not the ultimate party responsible for loss or damage that may occur in transit. Because of this, freight brokers do not hold a cargo liability insurance policy, but a contingent cargo liability policy, which ultimately protects freight brokers and the shipper if the motor carrier’s insurance policy does not honor the damage or loss.

It should be taken into consideration that this coverage will pay in the event that primary coverage does not suffice. There is the topic of Carmack Amendment that buyers of freight services need to understand because of its importance to claims and the circumstances that carriers can defend not taking liability for the shipments.

Final Pay Settlement

Motor carrier final financial pay settlement is straightforward, in that, once the motor freight invoice has been audited and approved for accuracy, the shipper is responsible to pay.

A freight brokers invoice is the same as mentioned with a motor carrier, with an additional twist. With a freight broker, the ultimate financial responsibility is between the shipper and the carrier. Consequently, if the freight broker finds itself unable to pay the carrier, then the shipper is left with the responsibility to pay. This should be a big warning flag for shippers that do not fully vet their freight brokers for financial stability because they may get stuck holding the bag on several invoices where they find themselves ultimately paying for the load twice: once with the broker and another time to the motor carrier.

Key Performance Indicators (KPIs)

It is important to note that a carrier, LSP and freight broker can have different to value-add services and KPIs for companies.

While there are several measurements that shippers find important for freight shipments it is important to understand what makes each of the freight provider entities tick, so to ensure alignment of goals.

The difference between KPIs of a motor carrier and an LSP is a motor carrier has a premium on measuring its hard assets to stay in business, while an LSP is all about measuring service because that is what it needs to excel at to keep itself in business.

Here is a listing of motor carrier and LSP key performance indicators.

Motor Carrier KPIs

• Top Line Revenue
• Loaded Miles
• Empty Miles
• Cost-per-Mile
• Revenue-per-Truck
• Hours
• Tonnage
• Deliveries
• Fuel Economy per Vehicle, including
  Idle Time
• Safety
• Available Hours of Service (HOS)
• HOS Violations
• Unassigned Mileage by Vehicle
• Driver Turnover
• Freight Claims

LSP Key Performance Indicators

• Top Line Revenue
• Margin Spread
• Revenue and Profit per Headcount
• Routing Guide Compliance of Motor
• Carriers Used in Programs
• Accessorials as Percent of Freight
• Tender Acceptance versus Tender
  Declined
• On-Time
• Capacity Issues
• Detention, Dwell, and Demurrage
• Damage Claims
• Maintenance
• Invoice Accuracy

For more in-depth comparisons, we recommend reading the following articles:

• Logistics Service Providers vs Motor Carriers: Comparing the Differences
• Logistic Service Provider (LSP) vs Freight Broker: A Comprehensive Comparison
• Comparison between Freight Broker and Managed Transportation Services Freight Operation Models

One question we are often asked is who are the top LTL and truckload providers in the market today. Below is what we tell potential buyers of our services:

Answering this question and similar questions about our competition, so freely, often confuses people, but as we see it, the more informed we can make buyers in the journey the happier they will be with their decision. Now, this may cause people not to buy from us, but it is better to go this direction then have a customer that has buyer's remorse or one that is not a good fit for them or for us.

With that said, below is a listing of the biggest LTL, truckload and freight brokers in the US market. The companies are listed in order of size.

If you are wanting more after reading through the below lists, we recommend the following articles:

• Best LTL Companies (And How to Choose)
  
• Best Truckload Companies (And How to Choose)
  
• Top 20 Freight Brokerage Companies (& How to Choose The Best)
  
• Top 5 Expedited Freight Companies (and Expedited Service How-to Guide)
  
• Best Managed Transportation Companies (And How to Choose)
  
• Pros and Cons of Shipping Truckload

Best of LTL Companies

• FedEx Freight
  
  
• YRC Worldwide
  
  
• XPO
  
  
• Old Dominion
  
  
• TForce Freight
  
  
• Estes Express Line
  
  
• ABF Freight
  
  
• R&L Carriers
  
  
• Saia Inc.
  
  
• Southeastern Freight Lines
  
  
• Averitt Express

Best of Truckload

• Knight-Swift
  
  
• Schneider
  
  
• Landstar
  
  
• JB Hunt
  
  
• Prime
  
  
• Werner Enterprises
  
  
• CRST
  
  
• Crete
  
  
• CR England
  
  
• Roadrunner Freight
  
  
• Covenant Logistics
  
  
• Western Express
  
  
• Heartland Express
  
  
• Ruan
  
  
• Cardinal
  
  
• Marten
  
  
• Universal
  
  
• P. A. M. Transport

Best of Brokerage Companies

• CH Robinson
  
  
• Total Quality Logistics
  
  
• XPO Logistics
  
  
• Echo Global Logistics
  
  
• Worldwide Express
  
  
• Coyote Logistics
  
  
• Landstar System
  
  
• Schneider Logistics
  
  
• MODE
  
  
• GlobalTranz Enterprises
  
  
• JB Hunt Integrated Capacity Solutions
  
  
• Hub Group
  
  
• BNSF Logistics
  
  
• KAG Logistics
  
  
• Yusen Logistics
  
  
• England Logistics
  
  
• UberFreight
  
  
• ArcBest Company
  
  
• Allen Lund Company
  
  
• Redwood Logistics

Keep in mind when reading the biggest and best listings that there is no "one size fits all” solution, which is why we will go through some topics to consider when choosing what is required from any LTL or truckload provider to be the best fit for your company.

While expedited shipping is not the biggest segment of the LTL and TL marketplace, its importance often punches far above its weight because of its importance to service, so we wanted to break this topic out to help shippers that struggle in this area.

The long-and-short of it is no matter how well things are prepared, it has to be considered that not every aspect of the shipping process is planned out or accounts for a hiccup. Consequently, the pressure of timeliness requires a shipper to opt for expedited freight services to make up for the unforeseen issue or just because of the nature of the business.

Unfortunately, the best national expedited freight companies are often not the best for every situation and a shipper needs to find a regionally-based solution for the best service and price for the same or next day service.

The good news is there are numerous local and regional expedited options, but they're often hard to find without engaging a freight broker or LSP because of the nature of the business.

With the bad news behind us, let’s jump to the good news … there are several types of expedited freight solutions for domestic, cross-border and international shipments.

Types of Expedited Shipping Services

Same Day - Air Charter Services

This option is the most expensive, as it is measured by cost per pound. The aircraft for this type of shipment is solely devoted to freight alone. Aircrafts for any size can be charted for this type of shipment as well, from a single prop plane to a Boeing 747.

Next Flight Out (NFO) - Air Freight Services

There are two types of air freight: commercial and cargo services.

Cargo services are defined by moving any number of pallets of freight via aircraft through cargo freight carriers.

Commercial services come via commercial aircraft putting freight “in the belly” of the plane.

The easier of the services for a shipper to use is through cargo services because they offer door-to-door service, while commercial options require a shipper to handle three legs of the shipment or go through a freight forwarder that is well versed in the area to get the one-stop door-to-door service.

Next-Day - Ground Expedited Services

If the origin and destination can be done within a day, next-day ground services are the best value option. Because proximity is important, these tend to be small regional operators using the following equipment:

Cargo Van

Weight Capacity: 2,000 pounds

Number of Standard Skids: 2

Sprinter Van

Weight Capacity: 3,250 pounds

Number of Standard Skids: 3

Straight Truck

Weight Capacity: 12,500 pounds

Number of Standard Skids: 10

Note on Straight Truck services: Expedited teams are notable in this category. This is where a team of two drivers is assembled to keep a truck moving constantly. This type is also common in truckload as well.

Tractor Trailer Teams

Weight Capacity: up to 45,000 pounds

Number of Standard Skids: 26

Hotshots

Hotshot expedited freight services typically refer to moving freight via a Class 3-5 truck used in combination with a variety of trailers to run freight for a single customer.

The phrase and method are thought to have originated in the energy fields in Texas when the equipment was moved quickly from one location to another to keep the oil field pumping crude.

It is important to note when choosing expedited freight services you need to come with the details so you can get the best value and service.