LTL and Parcel: What’s the Difference?
If you’re an online retailer looking to calculate a killer shipping strategy, you’ve probably come across the terms “LTL” (Less-than-truckload) and “parcel” shipping quite a bit. For those new to shipping parcel, its most likely that you’re most familiar with “parcel” shipping. But is it possible your business can benefit from both? If yes, what’s the difference?
The answer is yes! Depending on your shipping needs, your business can benefit from both LTL and parcel shipping. To understand the key differences between the two, lets first look at how LTL and parcel shipments are categorized.
Understanding parcel shipping categorization
Parcel shipments are small shipments weighing under 150lbs, with dimension regulations of less than 165 inches of combined length and girth and maximum 108 inches in length, according to UPS parcel standards. The defining factor of a parcel shipment is the ease at which a carrier can lift and deliver the shipment.
Understanding LTL shipping categorization
Less-than-truckload (LTL) shipments are shipments that are larger in size than parcel, typically weighing between 150lbs to 15,000lbs. This may also include packages that have unique dimensions that do not fit the parcel requirements listed about. The defining factor of LTL shipments is that, while large, they do not take up an entire truck.
What’s the difference between LTL and parcel shipping?
1.Cost & profit loss potential
Generally, parcel tends to be cheaper than LTL shipping, considering the average size and dimensions of a parcel shipment. If you’re shipping to a residential location, there are typically also additional LTL fees for using a Liftgate service, which will be needed to unload the product.
The cost advantage with LTL comes with avoiding misclassification. If you misclassify a shipment as a parcel, the fees you may incur can cost up to $850! This is why when you’re walking a fine line between parcel and LTL classifications, it's always best to ship LTL, despite the lower cost of parcel – it's not worth the risk!
An example of this is in your return strategy. When your weight and dimensions are relatively close to LTL categorization, we generally recommend shipping the return as “LTL,” to avoid overage fees caused by a customer’s repackaging.
2. Damages
Parcel shipments are more susceptible to damages, as well as being lost or stolen due to their small size, more frequent trips to checkpoints, and ability to be packed in high volumes. On the flip side, LTL shipments tend to have lower damage rates due to often being palletized and more effectively secured in truck spaces.
The greatest risks that incur during LTL shipping are shipping with the wrong carrier. Carriers that do not specialize in the type of product you are shipping are more likely to mishandle that product and cause costly damages. For example, a carrier that uses forklifts on their shipments may be a greater liability to someone shipping television sets than one who does not.
3. Need for specialty delivery services (residential)
If you’re shipping LTL residential (B2C), the services you may require when shipping may vary greatly in comparison to shipping parcel. Larger shipments typically come with added troubles on the side of the consumer, including difficulties moving the product into the house or difficulties assembling. If you’re shipping LTL residential, it's worth considering whether you want to make specialty services like White Glove services available to your customers. Doing so can improve the your overall brand and customer experience.
As mentioned above, LTL is at greater risk of damages when not shipping with the right carrier. Investing in specialty carrier services instead of just standard LTL liftgate services or carriers that specialize in your product type will make it more likely that your products will receive proper handling.
Conclusion
The difference between the benefits of LTL and parcel shipping depends heavily on the type of products you’re shipping. It’s important to distinguish which method of shipping is right for each individual product you are shipping to prevent losses, damages, and poor customer experience. It is always recommended to diversify your carrier network, using both LTL and parcel carriers to ensure your products are shipped correctly.