Partial Truckload Quotations
Many times shippers will ask their freight brokers for a pricing matrix for shipments consisting of more than 5 pallet spaces - but
less than truckload quantities.
While many accurately refer to this freight as “LTL”, many of us in the
industry refer to these quantities “partial” truckloads.
The distinction between the two terms actually means quite a
bit when it comes to freight pricing systems. “LTL” or “Less than truckload” freight is generally reserved
for freight "under" 5 Pallets where shipment pricing is generally handled a
“Cube/Density pricing model. In
this case this freight quotes are generally consistent and would generally move with a large national carrier such
as Yellow or Old Dominion.
Companies specializing in LTL aren’t interested in partials or truckload
quantities because such quantities would compromise their pricing methodology
and reduce their margin. LTL
carriers also typically cross-dock freight through multiple terminals which
results in longer transit times.
Partial truckload carriers, on the other hand, are companies
(usually smaller than LTL carriers) who travel longer distances and often
deliver on the same truck they picked up on. These carriers may only handle larger quantities of freight
and usually price freight out based on pallet spacing rather than density. Partial carriers also have to adjust
their shipping rates based on what portion of the truck you occupy. For example, because a partial carrier doesn’t
know if he will fill the truck out completely before a run he usually tries to
get 45% of the truck’s revenue from the first ¼ of the truck used. A savvy shipper or freight broker
understands that the “last” ¼ of the truck usually only has to account for
15-20% of the truck’s revenue.
This realty causes an interesting dilemma for shippers. Naturally, shippers who move partials
would like to have the same pricing consistency as shippers who move LTL,
however, to achieve this the fixed pricing model has to be at the higher end of
the spectrum – just in case the shipper finds himself on the nose of the
trailer as opposed to the tail. (think 45% vs. 15-20%). Not all trucks are actively completing
a load when the shipper says “go”.
The best protection against inflated pricing is to work with
a brokerage that moves enough partial volumes to ensure that the shipper is
priced out based on efficient load matching. Since most lanes usually have multiple partial truckload
carriers operating in them, a good broker will have the ability (more often
than not) find the carrier who is completing the load rather than starting it.
