Parcel vs. LTL — What Are the Differences?

LTL and parcel shipping are two cost-effective options for transporting products. Though both methods have many advantages, they face unique challenges and have significant differences. Understanding the distinction is vital for saving your business money while improving delivery efficiency. Use this guide to learn more about these shipping methods, how they differ and when to use them.

What Is Parcel Shipping?

Typically, business owners choose parcel shipping when they need to send smaller packages that drivers and operators can lift without assistance. This option involves more checkpoints and transfers, allowing businesses to track their shipments through each stage. However, small items are more likely to get lost or damaged during transfer, making this method riskier for some businesses.

Parcel delivery is an excellent option for those looking for a flexible and budget-friendly pickup process. Parcel shipping and delivery costs are often more affordable due to the smaller package sizes. Additionally, drivers can use drop-off locations, such as a post office, to deliver packages if the recipient prefers.

Understanding LTL Trucking

Less-than-truckload shipping, or LTL, is a process that transports larger packages and products. Companies that routinely ship uniquely shaped packages or bulky orders can rely on LTL for safe and efficient transport. Businesses often place LTL shipments on pallets, allowing the products to move together and ensuring the recipient gets their whole order at once. This process involves few checkpoints, so businesses have less visibility over shipment movement than with parcel shipping. However, a significant advantage of this option is that fewer people handle the products, minimizing the chances of damages or losses.

LTL is cost-effective when transporting many products to the same location. Even if the packages are smaller, the per-shipment cost is lower because the items travel together. For example, shipping a pallet of five boxes with LTL is more cost-effective than sending five separate packages with parcel shipping.

Products that may use LTL include:

• Car accessories or parts
• Electronic devices
• Lumber, tiles and other construction materials
• Furniture such as tables and couches
• Large appliances like washing machines and refrigerators

Parcel vs. LTL — Key Differences

Though parcel shipping and LTL offer distinct advantages, they also have potential downsides. You should understand how and when to choose between them to make the most cost-effective decisions for your business.

• Pricing model: Cost is the first element to consider. While parcel shipping pricing includes factors like shipping speed, dimensions, weight and destination, LTL variables are distance, weight and freight class. Freight class reflects a package’s details, such as handling requirements, liability, density and storability. Often, the easier drivers can move your shipment, the lower your LTL costs will be. You must also know freight class to obtain a bill of lading or rate quote. A bill of lading will provide information regarding the carrier, shipper and person signing to receive the goods. Since LTL does not offer transit visibility, this document serves as a receipt and shipping label, aids in calculating charges and provides evidence against any claims or disputes that arise during transit.
• Product weight: One of the most significant differences between parcel shipping and LTL is the weight requirement. Though specific requirements vary by carrier, small parcel shipping is typically available for packages under 150 pounds. Alternatively, LTL packages can weigh between 150 and 15,000 pounds and do not require a full truckload.
• Tracking and checkpoints: While parcel shipments move from one hub to the next until they arrive at the proper destination, LTL shipments have less visibility. You can easily track packages’ movement because workers scan and update the status at every stage. However, products shipped with LTL move directly from the business to the customer, eliminating checkpoints and reducing updates while optimizing shipping costs.
• Damage risks: Though some business owners enjoy the increased visibility of parcel shipments, the number of checkpoints and handlers can also present a unique issue. The risk of loss or damage increases with more people handling small packages. Alternatively, LTL shipments often travel on pallets and have minimal, if any, exposure to checkpoints, increasing the likelihood that the products arrive in their anticipated condition.
• Transit: You can find choices like next-day, same-day or two-day shipping for parcels. These packages’ small size makes them easy to move, and they do not require loading equipment. Alternatively, LTL shipments may need forklifts or similar equipment for loading and unloading processes, adding time to the shipping process. Depending on starting and ending locations, LTL shipments can take several days to roughly a week to arrive at the final destination.
• Residential delivery: Parcel shipping is common for residential needs, while LTL is a direct-to-consumer method that can better serve businesses. Though you can meet some residential needs with LTL, you may encounter additional fees. For example, you must consider how the recipient will unload the package, whether they will need special equipment and if the residential area permits the space necessary for truck movement. Evaluate your potential profits and current audience when determining which method will benefit your business more.

Streamline Your Shipping With Broussard Logistics

At Broussard Logistics, you can find the technology and services you need to reduce and manage freight costs. Our team has over four decades of industry experience saving customers time and money. Whether you need LTL optimization services, parcel contract solutions or a combination of services to streamline your operations, we’ve got you covered with our comprehensive offerings.

We provide ongoing data monitoring, benchmarking, detailed carrier analyses and contract negotiation support. These solutions empower you to make informed decisions with market data, level the playing field to remain competitive and ensure you have ongoing support.

We will help you avoid overspending, optimize rates, enhance your customer experience and boost operations to grow your business. Rely on us when you’re ready to increase efficiency and reduce transportation costs. Contact our team to find a customized solution.