LTL vs. FTL Shipping: How to Optimize Costs for Any Load Size

Part 1: Understanding the Difference Between LTL and FTL

In freight shipping, one of the first decisions a shipper must make is whether to book Less-Than-Truckload (LTL) or Full Truckload (FTL) service. While both move goods over the road, the difference in load size, pricing model, and service level can dramatically impact your bottom line. Knowing when to use each option — and how to optimize costs — is essential for today’s competitive supply chain.

What Is LTL Shipping?

LTL shipping is designed for freight that doesn’t require a full trailer. Multiple shippers’ freight is consolidated onto one truck, with each paying for only the space they use.

Key characteristics of LTL shipping:

• Shipment size: Typically 1–6 pallets or up to ~15,000 pounds.
  
• Pricing structure: Costs are calculated based on weight, freight class, distance, and dimensional space occupied.
  
• Advantages: Cost-sharing makes it affordable for small or frequent shipments; wide carrier networks offer flexibility.
  
• Considerations: More handling, transfers, and stops mean longer transit times and slightly higher risk of damage.
  

LTL is the go-to choice when reducing freight costs matters more than absolute speed, especially for businesses shipping small, recurring orders to multiple locations.

What Is FTL Shipping?

Full Truckload shipping, as the name suggests, gives a shipper exclusive use of a trailer.

Key characteristics of FTL shipping:

• Shipment size: Typically more than 12–15 pallets or over ~15,000 pounds, though smaller freight may also ride FTL when timing is critical.
  
• Pricing structure: Costs are usually a flat rate per mile or per truck, regardless of whether the trailer is completely full.
  
• Advantages: Faster transit times (direct routes, no transfers); reduced handling and damage risk; consistent capacity for larger shipments.
  
• Considerations: More expensive if your freight does not fully utilize trailer space.
  

FTL makes sense for large loads, time-sensitive deliveries, or when a business requires added security and less handling.

Full Truckload vs. LTL: Cost Comparison

The phrase “LTL is cheaper than FTL” is true in some contexts — but misleading if taken at face value. The most cost-effective option depends on your specific load and objectives.

Cost efficiency factors include:

• Utilization of space: Paying for unused space in an FTL trailer can inflate cost per unit.
  
• Transit urgency: Faster FTL transit may justify higher spend if it prevents stockouts or penalties.
  
• Freight class & density: LTL rates are highly sensitive to classification. Dense, stackable freight reduces cost per pallet.
  
• Distance: LTL is often cheaper for regional hauls, while FTL can become more efficient for long cross-country lanes.
  

In practice, a 5-pallet shipment across 200 miles will almost always be more economical as LTL, while a 20-pallet cross-country load will be better suited to FTL. But there is a “gray zone” — often between 8 and 12 pallets — where a cost analysis is necessary.

When to Choose LTL Over FTL

LTL is the right choice when:

1. Your shipments are small to mid-sized and recurring.
   
2. Flexibility matters more than absolute transit speed.
   
3. Your freight is packaged and palletized well for shared transport.
   
4. You’re targeting freight cost reduction as a strategic priority.
   

Common examples:

• E-commerce replenishment (regional fulfillment centers).
  
• Manufacturers shipping parts to multiple distributors.
  
• Retailers restocking shelves in steady, smaller quantities.
  

When to Choose FTL Over LTL

FTL is the right choice when:

1. Your shipment fills most of a trailer.
   
2. The freight is high-value or fragile, requiring fewer touch points.
   
3. Transit time is critical.
   
4. You want dedicated capacity without consolidations or transfers.
   

Common examples:

• Big box retailers moving seasonal inventory in bulk.
  
• Food and beverage shippers requiring temperature control and rapid transit.
  

Automotive suppliers running time-sensitive just-in-time supply chains.

Strategic Tip: Hybrid Strategies

Many shippers don’t need to commit exclusively to one or the other. A hybrid strategy leverages both LTL and FTL based on the circumstances. For instance, a shipper may run consistent FTL lanes to distribution hubs but use LTL for downstream replenishment.

With the right data and visibility, businesses can dynamically select the cheapest and most efficient option per load. This is where advanced transportation management systems (TMS) and third-party logistics (3PL) partners like Swivel can unlock substantial savings.

Practical Cost-Saving Strategies for Shippers

Now that we’ve outlined the differences between LTL shipping and Full Truckload (FTL) service, the real question becomes: How do shippers reduce freight costs without sacrificing service quality? By applying the right strategies, technology, and partnerships, businesses can make smarter decisions for any load size.

1. Analyze Shipment Profiles Regularly

Cost optimization starts with data. Many companies fall into a “set it and forget it” shipping routine, assuming their current strategy is the most economical. In reality, shipping patterns change over time.

Best practice:

• Audit shipments every quarter.
  
• Look at average pallet counts, weight, density, and frequency.
  
• Identify shipments that fall into the “gray zone” (8–12 pallets) where you should compare both LTL and FTL quotes.
  

By recognizing shifts in order size or frequency, you can pivot from one mode to another and reduce freight costs by as much as 10–20%.

2. Consolidate Freight Where Possible

Small, frequent LTL shipments can drive up costs through repeated minimum charges. Consolidating shipments into fewer, larger loads may make FTL more economical.

Example:

• Sending 3 pallets twice per week via LTL may cost more than one 6-pallet weekly shipment.
  
• A multi-stop truckload can also combine deliveries to different customers on a single route.
  

Consolidation requires coordination, but the payoff can be significant.

3. Optimize Packaging and Palletization

Because LTL pricing is based on freight class, density, and dimensional space, inefficient packaging directly impacts costs.

Cost-saving tactics:

• Use stackable pallets where possible.
  
• Reduce dead space in cartons.
  
• Consider custom packaging for oddly shaped items.
  

The more cubic space your freight consumes, the more you’ll pay in LTL. Optimized palletization lowers your freight class and reduces surcharges.

4. Leverage Backhauls and Lane Balance

Carriers often run “empty miles” when a truck delivers freight and returns without a load. Shippers who can fill backhaul capacity often secure better rates.

Similarly, if your freight flows align with carrier imbalances (e.g., outbound-heavy markets needing return loads), you may get reduced pricing for both LTL and FTL. A strong 3PL partner can help uncover these opportunities.

5. Use Technology to Compare Real-Time Rates

Transportation management systems (TMS) give shippers visibility into real-time rates across both modes. Instead of manually calling carriers, a TMS allows you to:

• Compare LTL vs. FTL quotes instantly.
  
• Factor in both cost and transit time.
  
• Route shipments dynamically to the best mode.
  

The result: less guesswork, more confidence in your mode optimization decisions.

6. Build Relationships with Carriers and 3PLs

Shippers who view carriers as partners — not just vendors — often gain access to better pricing and priority service.

Strategies to build partnerships:

• Commit to consistent lanes where possible.
  
• Share forecasts with carriers to improve planning.
  
• Partner with a 3PL like Swivel that can aggregate volume and negotiate competitive rates.
  

In today’s tight capacity market, relationships can sometimes be as valuable as rates themselves.

7. Factor in Hidden Costs

A shipment that looks cheap on paper may be expensive once hidden costs are considered. For example:

• Detention fees for long load/unload times.
  
• Reclassification fees for incorrectly assigned LTL freight class.
  
• Accessorials like liftgate, residential delivery, or limited access surcharges.
  

By planning ahead and accurately classifying freight, shippers can prevent these surprises from inflating overall costs.

8. Implement a Mode Mix Strategy

The most efficient shippers don’t choose only LTL or only FTL — they use both strategically.

A mode mix strategy might include:

• FTL for high-volume seasonal moves (e.g., retail holiday surges).
  
• LTL for ongoing replenishment shipments.
  
• Multi-stop truckload for regional deliveries to multiple customers.
  

Blending both modes ensures you’re always shipping with the most cost-effective and service-appropriate option.

9. Measure KPIs and Continuously Improve

Finally, cost optimization is not a one-time project — it’s an ongoing process. Shippers should measure and track KPIs such as:

• Cost per hundredweight (CWT)
  
• On-time delivery rate
  
• Claims ratio/damage rate
  
• Cost per order delivered
  

By monitoring results, you can identify problem areas, adjust mode decisions, and continuously drive savings.

How Swivel Helps Shippers Optimize

At Swivel, we understand that every shipper’s needs are unique. That’s why we provide technology and expertise to help businesses compare FTL vs. LTL options in real time, identify the most economical solution, and reduce freight costs without compromising service.

Our approach includes:

• Data-driven optimization: analyzing your shipment history to uncover savings.
  
• Dynamic mode selection: ensuring every load is booked in the most efficient way.
  
• Carrier network strength: leveraging relationships to secure competitive pricing.
  
• Visibility tools: giving shippers full transparency across LTL and FTL moves.
  

Whether you’re a manufacturer, distributor, or retailer, Swivel helps you unlock efficiencies at every step of the journey.

Final Takeaway

Choosing between LTL shipping and FTL shipping isn’t about picking one over the other — it’s about knowing when each makes the most sense. By auditing shipments, consolidating where possible, improving packaging, and leveraging technology and partnerships, shippers can optimize costs for any load size.

With the right strategy, freight cost reduction is not only possible but sustainable, giving your business a competitive edge in today’s demanding logistics landscape.