Do you have a shipping need but you don't know where to start? Are you confused by all of the jargon and abbreviations? Maybe you have experience with one mode of shipping but now your business has expanded and it is time to venture out. Don't fret. This short guide will help you to understand two of the most popular methods of shipping by small and mid-sized businesses.
Less Than Truckload Shipping (LTL)
To better understand Less Than Truckload Shipping (LTL) let's look at an example: Margaret and her husband Tom have been working night and day to develop SmartSeat, their ergonomic chair business. SmartSeat has done really well in the Williamsburg area where they started the business. Their hard-work and quality workmanship has paid off and folks all across the United States are starting to purchase their chairs.
A home furnishing store in Dallas wants to sell the SmartSeat in their showroom which is about 1,300 miles away from Margaret and Tom's factory. The store in Dallas likes the SmartSeat but they are not committed to buying an entire truckload of chairs. They are a little disappointed at first because they were told by a friend that shipping via a truck is all-or-none. They give Margaret and Tom a call and inform them of the bad news.
Tom is not one to easily give up. He performs an Internet search on “shipping” and finds a listing for a Freight Broker. The text under the link says, “We cater to all of your shipping needs.” Bingo! This is exactly what Tom is looking for. He picks up the phone and talks to Pete, a friendly clerk at the Freight Broker. Pete explains to Tom about Less Than Truckload Shipping or LTL as it is know in the industry.
Tom asks Pete a ton of questions and discovers He has several options. The first option is to use a traditional Parcel carrier if the chairs weigh less than 150 pounds and if the store only wants to buy several chairs. This is not the case as the Dallas store wants to order at least 20 chairs to get started. Pete asks Tom if the chairs are easily stacked together. He tells him they are in boxes so Pete recommends having the chairs placed on pallets for easy shipping.
Tom calls the Dallas store and speaks to Sara. He explains some of what Pete taught him about
shipping. After a few minutes of discussion, Sara decides to place an order for 20 chairs. Tom does a quick calculation and determines this will be two pallets worth of chairs. He also tells Sara the order will take a little longer because the pallets will first go to a special staging area where pallets are consolidated to await a truck going to their destination to be filled. He assures her this shouldn't be too long because many shipments go from Virginia to Texas on a regular basis. Tom also gives her the good news about the shipment costing less than using a Parcel carrier. They agree to terms and hang-up
Less Container Load (LCL)
Our next example is slightly different. Instead of shipping goods across the country, we now have to figure out how to get goods overseas.
While in university Butch learned how to play rugby. He actually became quiet good at it and went through many rugby balls during his collegiate rugby career. His sister Emma, a seamstress, quickly learned how to make quality rugby balls to keep her brother supplied – and to save their parents money. Emma became famous due to the craftsmanship of her rugby balls and shipped them all over the United States.
One day Butch was surfing the Internet reading about his favorite pastime. He came across an
interesting article on the 2015 Rugby Union World Cup in England. Being a resourceful chap, Butch contacted an old school mate now living in England. One thing led to another and Butch was able to secure an order of 100 rugby balls for Emma to make. Making the rugby balls was not a problem, but shipping was. Emma was used to LTL shipping but she wasn't sure how she would ship that many rugby balls.
Emma already had her go-to freight broker in place and gave him a call. Pete answered the phone and listened to Emma's situation. He comforted her by telling her about oceanic shipping. Pete went on to describe the large metal boxes commonly seen onboard ships. Emma reminded Pete about the order size and Pete reminder her about LTL shipping. He continued by explaining to Emma that the same type of shipping existed for oceanic freight. Similarly the shipping company would start filling a container with her goods and add to it until the container was full. This way she could take advantage of container shipping without having a full load, but a Less Container Load or LCL as he called it.
Emma made a lot of rugby balls and Butch made a lot of money. Both were very happy.