For the average parcel shipper, venturing into the world of LTL shipping feels like diving blindly off a cliff into waters that may contain rocks, shoals and sharks. Or at least thats what it used to feel like. But times have changed, and parcel shippers who are dealing with LTL shipping for the first time have been finding that it isnt all that different from the parcel world anymore.
It used to be pretty easy to decide whether to ship products by parcel carriers or by LTL, says John Green, director of Marketing, Communication and Product Design for Viking Freight, a subsidiary of FedEx Freight. The old rule of thumb was anything greater than 150 pounds went with an LTL carrier. But then the major parcel carriers started to broaden their offerings, including heavy-weight shipping. The difference between the two modes of carriage has become smaller and smaller each year. And so making the decision as to which kind of carrier to use has become a lot more complicated. There are a lot of factors to consider and some vary with the individual shipment that is a candidate for either parcel or LTL movement.
Factors to Consider
When deciding whether to utilize parcel or LTL shipping, shippers must take into consideration the weight and characteristics of a shipment. That old 150-pound rule is not an absolute guideline anymore, but obviously the weight of the shipment must be a major consideration in choosing a shipping mode. Also, are the boxes big and bulky, small and compact, unitized or loose? LTL often is a preferable choice when the boxes are oddly shaped, as in furniture. Being less automated than the parcel shippers, the LTL carrier will often be using forklifts instead of conveyor belts. Strange as it may seem, moving odd-shaped boxes with a forklift is a lot more tender-loving care than moving it on a conveyor belt with thousands of other packages. The shape of the carton may cause it to fall off the belt or at least be tumbled around a good deal.
Another area that needs to be looked at is the consignees receiving facilities. Do they have a dock? Are they on the tenth floor of a building with no freight elevator? Do they expect inside delivery? Bob Olive, senior manager of Logistics at LL Bean in Freeport, Maine, oversees a huge operation where 95% of the outbound freight is sent by parcel shippers to consumers. But what happens when the consumer wants a large piece of furniture delivered to the house? The homeowner also wants it placed in the living room and unpacked, and he wants the packing materials to disappear! Enter LL Beans white glove service. The company has arranged with LTL carriers and, in some cases, household goods movers to get that customers order in place on time and with the packing materials on the way to the landfill or, hopefully, to the recycler.
And, of course, another consideration is price, especially accessorial charges. Most of us are painfully aware of parcel carriers charges for services such as rural delivery, address correction and Saturday delivery. LTL carriers have their charges as well, especially for inside delivery or delivery to a recipient who has no loading dock. Carriers in both industries continue to charge fuel surcharges, despite the decline in oil prices in the last few months.
But the consequences of deciding between LTL and parcel shipping go far beyond these day-to-day operational issues. Your strategy can affect your companys mission. You can produce the worlds greatest product, but if it isnt delivered safely and on time, your customer will go find someone else. And in todays environment, your customer whether a huge distribution organization or a consumer waiting for a Christmas present on December 24 expects fast, reliable and on-time delivery.
Both the parcel and LTL carriers are acutely aware of this situation. The parcel industry has set the standard in consumer expectations, and the LTL industry has stepped to the plate to meet those criteria in its delivery of service. In fact, the services offered by a parcel carrier and an LTL carrier are so similar that sometimes its hard to tell the difference between the two services.
Dealing with Service Concerns
LL Beans customers expect a lot: quality merchandise, ease of ordering, careful handling and delivery when and where they want it. Bean can handle the first two; their carriers must do the rest. Of course, LL LL Beans customers are hardly unique in these expectations. Both consumers and business customers expect this much and more.
Customers in the 21st century, whether consumers or industrial shippers, also want information and lots of it. They want it to be current and at their fingertips literally. Once again, the parcel industry is the one that has raised the bar on standards for timely information. Shippers expect to be able to go to a Web site and get as close to real-time information as possible. LTL shippers now offer Web tracking of shipments via barcodes including thumbprints, satellite uploads from their trucks and signature capture. The Internet has changed everything, explains Green, but not just customer expectations. It helps us to run a better operation. And look what it does for a small business. An owner can obtain shipping reports as sophisticated as any in the business from a carriers Web site, customized to his own needs. No more keeping waybills in an envelope.
Most parcel and LTL shippers offer logistical services. For example, carriers can arrange simultaneous delivery of items coming from different locations. That is hardly a surprise with parcel carriers, since they are generally involved in overnight, next morning delivery. Its a bit trickier with freight, but nevertheless, a service carriers are more than happy to offer.
Partnership is an absolutely critical element in any companys customer service strategy. Olive was emphatic that Bean, like most major shippers, wants long-term arrangements with its carriers. This philosophy applies as much to the LTL carriers as to the parcel shippers. It is in the interest of both the shipper and the carrier to make sure that a real relationship is established and that each side can speak frankly with the other about expectations and capabilities it may have.
The entry of major parcel shippers into heavy-weight shipping has blurred the line between the LTL and parcel markets almost to the point of disappearance. This state of affairs has also put severe pressure on smaller LTL firms; its not easy competing with those 300-pound brown or purple and orange gorillas. But its been good news for their customers. Olive states, With the parcel and freight markets merging, theres a lot of competition out there. Both LTL and parcel carriers are fighting to get our business by offering services to meet our new demands. For consumers, as well as shippers large and small, thats a good thing.
Penny Guyer, CMM, CMDSM, manages mailing and shipping operations for the western region of USBancorp. She is also editor of Parcel Shipping & Distribution magazine. She can be reached by e-mail at email@example.com.