Shipping less-than-truckload (LTL) freight can be kind of nerve-wracking. There are a lot of variables at play every time your LTL freight is ready to move.
“How long will it take for the truck to arrive for pickup?”
“How much insurance do I need?”
“Will I need to budget dollars for LTL accessorials or back charges?”
“What exactly is the right, most budget-conscious class for my freight?”
These are among the most pressing questions you have. And you’re not alone.
Even the most seasoned LTL shippers have trouble keeping these shipments on track; it often feels like so much is out of their control.
That’s why, in many scenarios, companies hand their LTL freight to a brokerage, looking to leverage its carrier relationships and expertise. If you’re uncomfortable handling your LTL shipments in-house, or if you’re simply looking to save some money, using a good brokerage is worth considering.
ATS Logistics has been in business since 1989 and has extensive experience arranging and overseeing LTL freight moves. Over the years, we’ve developed great relationships with many of the top national and regional LTL carriers, using them to connect customers with the service levels they deserve.
While we believe that using a freight brokerage for LTL loads is a great fit in many scenarios, there are also a couple of downsides to doing so. In this article, we’ll help you decide whether a broker would make a good LTL partner for you by breaking down the following:
- The advantages of using a freight broker to ship LTL freight
- The disadvantages of using a freight broker to ship LTL freight
- What to look for when choosing an LTL freight broker
3 Advantages of Using a Freight Broker to Ship LTL Freight
Deciding on the type of transportation provider to use, regardless of the quantity of freight you have to ship, is difficult. You want to make sure your choice sets your company up for success — some provider types are better at certain things than others.
As you work to find your business’ best option for getting its LTL freight moved, keep these three advantages of using a freight brokerage in mind:
- You can obtain discounted rates from many national and regional carriers
- You can avoid many back charges and accessorials
- You can access industry expertise and LTL shipping knowledge
Advantage #1) You Can Obtain Discounted Rates From Many National and Regional Carriers
The largest regional and national LTL carriers in the U.S. offer discounted pricing to their high-volume customers.
Since these companies reliably serve them loads on a schedule, LTL carriers give them a break on pricing — quoting them volume-based rates for a group of shipments instead of pricing each individually.
Where normally you’d need to pay full price for each LTL shipment, using a freight brokerage allows you access to their “tariffed” rates, which are typically offered within a tiered system where the largest shippers receive priority pricing and capacity.
Freight brokerages leverage their customers’ freight by feeding it to their LTL carrier partners and — in turn — giving customers better pricing. Most of the time, using your freight brokerage’s customer portal, you’ll have access to your choice of the top LTL carriers’ volume-based rates and capacity.
This gives you the flexibility to control these transactions while leveraging your broker's buying power.
Advantage #2) You Can Avoid Many Back Charges and Accessorials
There are a ton of LTL accessorial charges. Many of these fees are levied after a shipment delivers — particularly if something unforeseen pops up during the course of a shipment. Paying a marking or tagging fee when something needs to be re-labeled is one example of this.
For the most part, these accessorial changes are minuscule ($15-$100) but they can quickly add up. You’ll want to avoid these when you can. Luckily, working with a broker can help you do so.
You see, a freight brokerage may arrange hundreds of loads per week with a single LTL provider. This makes the brokerage a really valuable partner to its carriers, giving it a bit of bargaining power to use for you.
As such, when you work with a well-founded freight brokerage, you usually don’t have to handle accessorial disputes directly. Instead, they’ll handle this for you, talking to their point of contact and resolving what they can.
Advantage #3) You Can Access Industry Expertise and LTL Shipping Knowledge
There's a ton of complexity in the LTL shipping world. And, quite honestly, there’s a lot you can’t control. Things like when your freight picks up and how long it takes to deliver are out of your hands. So it’s really important to have proper expectations for every shipment you move LTL.
This is where working with a knowledgeable brokerage partner can make a big difference. With their diverse understanding of LTL shipping, its processes and how LTL systems work, they can help you set proper expectations and match your timelines with the service abilities of each carrier.
In turn, this will help you get on the same page as other stakeholders — especially your customers — who are just as invested in your shipments.
Additionally, working with a knowledgeable provider can help you avoid common issues like misclassifying your freight (NMFC codes are confusing).
At the end of the day, maintaining your transportation budget and meeting your deadlines hinges on how well you manage the intricacies of LTL shipping. A great freight brokerage can be your ally in this, connecting you with the perfect LTL truck, at the right time, for the best price.
2 Disadvantages of Using a Freight Broker to Ship LTL Freight
While the right freight brokerage can help you keep your LTL shipments running smoothly per your budget and timelines, two distinct reasons you may want to work directly with an LTL trucking company are:
- Using a freight broker further separates you from your freight
- High-volume shippers don’t benefit as much as others
It’s fair to point out that neither of these may be deal breakers for you. In that case, skip to the section covering how to choose an LTL freight brokerage. That said, here’s a breakdown of why these two things are worth considering
Disadvantage #1) Using a Freight Broker Further Separates You From Your Freight
Freight brokers are third-party transportation providers; they don’t directly move your freight, they contract an asset company to do so. This means whenever you use a broker for your LTL cargo, your point of contact doesn’t work for the party physically hauling it. In many scenarios, your broker won’t have contact information for the driver. And, all of your communication will be with your broker — not the actual carrier.
This can be nerve-wracking for some logistics managers who want the peace of mind of knowing they have a point of contact at their LTL carrier. This likely won’t be possible if you use a brokerage.
Disadvantage #2) High-Volume Shippers Don’t Benefit as Much as Others
As we mentioned up above, the largest LTL carriers price their services based on freight volume. In doing so, a shipper’s pricing reflects the overall quantity of cargo they ship with the carrier over a period of time. Usually, there are tiers to this system, with the highest-volume customers obtaining “tier one” pricing, smaller shippers/brokers garnering “tier two” rates and so on.
So, if your company regularly ships LTL freight — at a pace of 5 or more loads per day — you may be better served to work directly with a carrier. In this scenario, you should have more control and bargaining power than a brokerage can afford you, making it best to handle these loads alone. Plus, with that many loads moving, you probably have a steady partnership in place with many top carriers and extensive in-house expertise.
What To Look For in an LTL Freight Brokerage
Many, many companies use freight brokers to move their LTL cargo. This tactic offers companies affordability, flexibility and stability. In a relatively complex and unpredictable industry (LTL shipments are hard to fully control), good freight brokers make valuable allies.
That said, not every freight broker is woven from the same thread, cut from the same cloth, reaped from the same field, hardened in the same kiln. . . you get the point, haha.
So, if you’re interested in getting set up with a freight broker for your next — and all future — LTL shipments, there are several qualities you’ll want to look for when choosing.
Here are three of the most important things to look for in a dedicated LTL freight brokerage:
- Look for a robust customer portal
- Ensure they work with a variety of LTL carriers
- Make sure they understand key LTL variables and information
1. Look for a Robust Customer Portal
In today’s digital age, there are a ton of technologies available to help you run a more efficient supply chain. To provide industry-leading service and a refined customer experience, the best freight brokers invest in these tools. Many create customer portals, customized to meet — and even exceed — their customer’s needs.
While a great customer portal is important for every type of shipper (shipping every type of cargo), it’s particularly impactful in the LTL marketplace where transit times are unpredictable, insurance can get confusing and invoices pile up quickly.
That’s why you’ll want to make sure your freight broker offers a top-of-the-line customer portal, here’s an article outlining what you should look for.
2. Ensure They Work With a Variety of LTL Carriers
Diversity is key in many aspects of life. The same is true of your LTL transportation network.
It’s healthy to have a mix of LTL carriers to turn to for service, this helps to ensure your rates are competitive (you can compare them) and gives you access to capacity through multiple avenues — preventing failure due to a lack of options.
A good freight brokerage understands these things and will have relationships with many of the best LTL carriers. This helps a freight brokerage provide reliable service at competitive price points.
Make sure to ask each potential provider about the carriers they use and what they do to find, vet and add new ones to their network.
3. Make Sure They Understand Key LTL Variables and Information
LTL shipping is relatively complex, so having a knowledgeable partner in your corner every time you have a question or encounter a problem is valuable. This is one of the main reasons you’d want to use a freight brokerage in the first place — make sure yours can meet these needs.
As you’re vetting freight brokerages, quiz them on all things LTL shipping. Here is a short list of the information you’ll want to know they understand:
- What does your company do to figure out a shipment’s freight class?
- How does insuring my products work and what do I need to know about my LTL insurance options?
- What do you need to know to provide an accurate LTL quote?
- What is my quote good for? Will I be charged for any accessorials?
- Do you have any tips for avoiding LTL surcharges?
While this isn’t a comprehensive list of questions, this is a good starting point. Look for a brokerage that doesn’t shy away from answering these queries and responds confidently to each.
Have Freight to Move? LTL Isn’t Your Only Option.
Companies across industries lean on freight brokers to handle their LTL shipments. Most of the time this is a great choice, connecting them with reliable service, visibility via a customer portal and a knowledgeable point of contact to help them through any concerns that arise.
However, using a freight broker for LTL purposes might not be the right fit for your company if you’re uncomfortable working with a third party or if you ship more than 5 LTL loads per day.
When it comes to shipping less than full truckload quantities of cargo, LTL service — where your shipment shares space on a 53-/48-foot trailer — isn’t your only option.
In fact, there are a variety of services that many companies don’t even know are options. Many of them can meet your needs and help you save money too.
Your next step is to check out this Small Freight Shipment Service Guide for an in-depth overview of your options and how they compare to traditional LTL service.
Don’t hesitate to contact us here with any questions.
Finally, if you’d like to learn more about ATS Logsitics’ LTL transportation services and how we can be a reliable freight brokerage partner for your business, check out our LTL services page here. Together, you can become the supplier that always delivers for its customers.