LTL clearly plays a critical role for consumer goods manufacturers in getting products to market. But it costs significantly more than truckload shipments and it’s less reliable. By using a 3PL to consolidate loads with other shippers, small and mid-sized CPG firms can actually shift a large portion of LTL freight to full truckload in order to lower freight costs, improve on-time delivery performance and reduce product damage.
Load consolidation strategies take some work and the right 3PL partner to implement, but it can be done.
In our last blog post, we reviewed five things LTL carriers don’t want you to know about LTL freight shipping. In this post, we’ll share five more.
Problems with LTL Freight Shipping
Following are some of the downsides of LTL shipping and why you may want to get more aggressive about retail shipment consolidation.
- Shipments take longer. Sometimes twice as long, as longer shipments zigzag their way across the country into and out of LTL freight terminals. A consolidated TL shipment from Pennsylvania to Arizona takes about 3 days, compared to 6-10 days for LTL.
- Inventory increases. Retailers don’t like to hold inventory, so they want smaller, more frequent shipments that arrive on a very predictable schedule. With LTL, they won’t have that predictability. As a result, retailers must bump up their buffer stock as a contingency.
- You’ll miss some delivery windows. The longer the journey and the more stops, the less predictable schedules become. As you miss delivery windows, there are financial consequences such as chargeback penalties. In the bigger picture, poor service will erode your scorecard with retail customers and can impact future sales.
- Damage rates are higher. An LTL shipment moving from the East Coast to the West may pass through as many as 6 LTL freight shipping terminals. Damage rates increase every time a product is touched. Boxes can get dropped, cartons can get crushed. Over time, even small increases in damage rates can exact a heavy financial toll.
- LTL freight shipping increases your carbon footprint. LTL is not a green-friendly mode. It is common to see trucks that originated in the same geographic area pulling up next to each other at a retailer’s DC. Lots of different companies shipping goods to the exact same location, yet operating completely independently. This puts more trucks on the road, blocks up our already crowded highways, and emits more greenhouse gases into the atmosphere. We need more shared supply chains.
An Alternative to LTL Shipping
Mass transit, shuttle buses, rideshare programs – these are modern society’s solutions for moving PEOPLE when all those people are going to the same destination.
Why can’t we do the same for FREIGHT?
Well, we can.
Freight consolidation is not a new strategy, but it’s underutilized. 3PLs like Kane Logistics, which serves a dense concentration of consumer goods manufacturers, use smart technology to match loads that share the same final destination and requested arrival windows. They are the matchmakers is a new “We” economy that looks to share infrastructure in order to reduce costs and energy usage.
There are better alternatives to LTL for smaller shippers. Learn how you can reduce LTL costs by checking out our paper: LTL Secrets Revealed.