For any CPG business, growth is good. But when expanding, brands can quickly find themselves in uncharted territory, deciphering LTL vs parcel shipping, trying to determine when it’s best to leverage each.
A high watermark of an organization is moving beyond solely relying on parcel shipping to fulfill orders and moving onto less-than-truckload (LTL) freight to accommodate increased volume.
But before we pinpoint when it’s time to make that jump, it’s important to detail the differences in each shipping method. Though sometimes they can appear similar, there are important distinctions to note in the LTL vs. parcel comparison.
What is Parcel?
Practically everyone is familiar with parcel shipping whether they realize it or not. Think of the package that arrives at your door when you make an internet purchase. That’s parcel shipping, primarily managed by USPS, FedEx, and UPS.
Parcel shipping is a viable order fulfillment solution for brands of all sizes, particularly for those fulfilling small or singular orders that are going direct to consumer.
It’s when organizations successfully contract with large retail purchasers and/or sell at higher volumes that LTL becomes imperative.
According to Parcel Media, there are a few criteria for your shipment that dictate a time in which you should opt for parcel shipment over LTL:
- The order can be individually packaged and is under 150 lbs (70 kg).
- The order can be packaged in boxes under 165 inches (419 cm) in length and girth (2x width+ height) combined
Using parcel is a part of every brand’s life, but with increased order size and quantity, parcel can become too time-consuming and rife with cost inefficiency. When brands find themselves in this situation, it’s time to look to LTL to fulfill shipments.
What are LTL Shipments?
LTL, in logistics, stands for less-than-truckload shipping. As the name indicates, LTL orders are lower in item quantity than full-truckload (FTL) shipments and do not take up an entire trailer.
Because your order is only occupying part of a truckload, you are essentially paying for just that space, which often makes it a cheaper option than FTL shipping.
It’s an effective and proven solution for shippers who have palletized orders and for those who do not want to pay for a full truck to move their freight.
LTL vs Parcel—When Is It Time to Graduate?
Parcel is the way most CPG brands launch their shipping lifecycle but is a service most aim to graduate beyond as quickly as possible.
Here is a checklist, prepared by our internal subject matter experts, that can help your organization determine when it is time to defer to less-than-truckload in the LTL vs. parcel discussion:
An Order Requires You to Ship More than 4-5 Boxes
Orders fewer than 4-5 boxes, which meet the previously mentioned parcel dimension and weight specifications, may be better suited for parcel. But if your organization is fulfilling multi-case orders that extend beyond a count of five, it’s best to add them to a pallet and ship via LTL. This will reduce your cost per case and ensure a more consistent delivery of your product.
The Order is Going to a Large Retailer
In recent years, retailers have increasingly dialed up their expectations for suppliers. Scorecards have become standard practice from most big box retailers, who use them to grade a brand’s transportation performance and on-time delivery capabilities.
Parcel shipments, of multi-case orders, can be separated in transit, arriving at retailers at different times, which will likely hurt your scorecard and possibly lead to the order being rejected. Retailers are not equipped to effectively handle fragmented orders and will start to push back when orders arrive in numerous pieces.
“If you have more than 15 cases, make sure that it goes through a freight company and not FedEx or UPS ground. Shipping that many cases ground makes for a lot of extra work for our facilities.” – Grocery Buyer
Choosing LTL greatly reduces this risk since the mode requires you to send palletized product. Sub-standard delivery can lead to issues in your retail relationships. But LTL can provide you with higher service capabilities, which helps your marks stay intact.
So, after signing that exciting deal and receiving your first purchase order, you’ll likely want to use LTL, particularly if you are working with a big box store.
An Order Needs Increased Service
In addition to retail deliveries, you might need increased service for expedited orders, production-critical shipments, or high value cargo. Service, when talking about LTL shipping, means increased attention to your freight, ensuring that it arrives when/where/how it was intended.
A quality LTL freight broker, 3PL, or carrier will also help you solve problems as they arise. Parcel shipping doesn’t come with a dedicated customer service representative or team of experts.
Your Product is Sensitive to Damage
The nature of parcel lends itself to increased handling as your packages go in and out of multiple hubs and vehicles across the country. The constant loading and unloading increases the likelihood of damage.
Parcel, as a shipping method, is not well suited for sensitive or fragile product. While LTL also has reputation for overhandling of orders, damage occurs far less often in LTL shipping then parcel. Opting for LTL when you have product packaged in glass bottles or jars is likely the correct choice.
An Order is Over Minimum Weight Thresholds
How much does your total shipment weigh? If more than the minimum weight thresholds set by LTL carriers, than you can take advantage of price breaks.
LTL carriers charge by the 100 lbs and offer discounts for heavier freight. If your total shipment weighs more than 100 lbs, you can likely benefit from choosing LTL.
In fact, it’s a good idea to check LTL pricing any time you are above the previously mentioned 4-5 unit count. Zipline has aided chip and snack companies (those with light, airy freight) take advantage of LTL price breaks even when they are shipping pallets that weigh as little as 30 lbs. total.
Zipline works with brands every day to help them understand minimum weight thresholds and find optimal shipment configurations. Since weight minimums vary by carrier, product, and lane, there is no universal rule that will tell you when to choose LTL or parcel. It’s something a transportation professional or quality third-party logistics provider can help your organization sort out.
How Zipline Can Help Determine Parcel vs. Freight
As your brand grows, your logistics operations quickly become more complex.
Zipline Logistics can work with your organization to determine which shipping method is right for each purchase order.
By partnering with an expert 3PL, we can help your brand develop a logistics strategy that effectively determines which shipping solution is most beneficial for your bottom line and long-term growth goals.
Although, parcel shipments will likely always be a part of your logistics equation, our experts can work with you to determine when to use parcel as an effective and supplementary piece of the puzzle instead of your solitary shipping solution.
It’s common for emerging brands to go from fulfilling single orders via parcel to shipping multiple skids across country, seemingly overnight. And when you land a big new customer, acing product delivery is key to the relationship.
We can help optimize your logistics function for scalable and maintainable growth.