Parcel vs. LTL shipping: Understanding the key differences.
April 4, 2018
LTL has been a driving force in the shipping industry for quite some time. Lately, however, parcel shipping has cropped up as a cost-effective option for shippers with freight weighing more than 150 pounds as well. Since both options are fairly similar, it can be difficult to understand which option is best for your needs, so it’s best to look at the key differences between the two.
The differences between parcel shipping and LTL shipping typically begins with their size, since parcel packages are smaller in size. Parcel packages can be lifted without help, are easier to transport and can be shipped in larger volumes. LTL packages are on the larger side, so they are usually palletized, less likely to be damaged and require fewer checkpoints.
Once you have a solid understanding of what makes LTL shipping different from parcel shipping, you should have all the facts you need to decide which you should move forward with.
A look at parcel shipping.
Parcel shipping has historically involved packages that are below 150 pounds and can be lifted without assistance. Since this means that packages are typically smaller than what LTL shipping deals with, there are varying benefits and hurdles involved.
Parcel shipping generally carries a higher risk due to the fact that parcel packages can easily become lost or damaged due to their smaller size.
Alternatively, for this same reason, there are more checkpoints and possible transfers involved. More checkpoints may be a plus for carriers since they mean buyers can be more accurately informed on where their shipment is and when it will be delivered. Processing itself is often generally easier due to the size of the packages, too.
The cost advantage with parcel shipping lies squarely with the volume of packages it allows. Again, due to their size, the volume of packages is typically higher than it would be with an LTL shipment, creating a cost advantage for carriers.
A look at LTL shipping.
Unlike parcel shipping, LTL shipping typically deals with larger packages. This means that bulky, sometimes uniquely-shaped freight will be able to find a way with LTL shipping.
LTL shipments are usually palletized and stored in a non-damaging space, making them a less-risky option for carriers. With their size comes fewer checkpoints, which can either be a pro or a con for carriers. There are less check-ins, but that means there are also fewer hands on the packages, so an overall smaller chance of loss or damage. Ultimately, however, shippers with more freight than parcel carrier services can handle will end up choosing LTL shipping since they often don’t have enough to call for an entire truckload.
The LTL industry is also experiencing a capacity crunch due to a shortage of drivers. The demand and volume of shipments are still there, but a lack of drivers is putting a bit of a strain on the industry.
The key differences between parcel and LTL.
Despite both having to do with getting your shipment from point A to point B, parcel shipping and LTL shipping have some clear differences. Now that you have taken a look at both options, you can better understand the clear differences between the two.
In addition to the package size differences between parcel and LTL shipping, here are a few more key factors to consider when deciding which is the best for you:
1. Damage risk and loss prevention.
Each option comes with their own risks and benefits. With parcel shipping, the chance that a package will become lost or damaged is higher than with LTL. An LTL shipment is often secured by pallets and placed in a space that is designed to prevent damage to the freight. Parcel shipments are smaller, therefore able to be packed in higher volumes. While this is a nice advantage, it could absolutely lead to a greater risk of loss or damage.
2. Ease of tracking and checkpoints.
Another key difference between parcel shipping and LTL shipping would be the ease of tracking. Parcel packages end up going through several different checkpoints, so carriers will be updated on their whereabouts more frequently than they would with LTL. On the other hand, however, is that fewer checkpoints allow for greater security with LTL. LTL also allows for zone skipping, the process of bypassing a parcel carrier's zones, letting the shipper evade charges from crossing multiple zones in a single trip. Essentially, the fewer checkpoints and transfers a shipment has to go through, the safer that shipment will be.
3. Cost advantage.
The cost advantage of parcel shipping comes from the higher volume it offers. Since LTL packages are larger, they will take up more space and result in a slightly higher price. This is not always an advantage of parcel shipping, however, since parcel carriers have their own set of additional charges. Things like correcting an address to a Saturday delivery could cost you extra with parcel shipping, whereas LTL carriers could hit you with charges for not having a loading dock.
There are a few key differences between parcel and LTL shipping that are helpful to know when deciding which method you should go with. While many of the factors that divide the two are due to the size of the packages involved, there is definitely more to it than just how big they are. While many may feel as though parcel and LTL shipping may be one and the same, hopefully, you are now able to identify the benefits and differences to both and decide which is the best fit for your needs.
If you would like to speak with a Freightquote expert directly, contact us at 800-323-5441 or head over to our contact page.
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