Why Your LTL Freight Costs More Than It Should (And How to Fix It)
If your LTL freight costs seem higher than they should be, you’re probably right. Most manufacturers and distributors overpay for less-than-truckload shipping by 15-20% without realizing it.
The frustrating part? These aren’t costs you can negotiate away. They’re self-inflicted wounds caused by common mistakes that carriers happily charge you for.
The good news is that you can reduce LTL freight costs significantly by understanding how LTL pricing actually works and avoiding the traps most shippers fall into. This guide shows you exactly how.
Understanding Why LTL Freight Costs What It Does
Before you can reduce LTL freight costs, you need to understand the pricing model.
LTL carriers don’t charge by weight alone. They charge based on a complex formula that includes freight class, weight, dimensions, distance, and accessorial services. Each component affects your final cost.
The Four Main Cost Drivers
Freight class determines your base rate. Classes range from 50 to 500, based on density, handling, stowability, and liability. Higher classes cost more.
Weight and dimensions affect your density calculation. Carriers care about how much space your freight occupies relative to its weight.
Distance impacts cost linearly. Longer hauls cost more, but the relationship isn’t always proportional due to carrier lane preferences.
Accessorial charges are extra fees for services beyond basic dock-to-dock delivery. These add up quickly and often represent 20-30% of total LTL freight costs.
Understanding these drivers is the first step to reduce LTL freight costs effectively.
Hidden Costs That Inflate Your LTL Freight Bills
Most overspending on LTL freight comes from charges you didn’t expect or don’t understand.
Reweigh and Reclass Fees
Carriers weigh and measure your freight at their terminals. If your declared weight or class is wrong, they correct it and charge you the difference plus a reweigh or reclass fee.
How this happens: You estimate weight at 800 pounds. Actual weight is 950 pounds. The carrier bills you for 950 pounds plus a $75 reweigh fee.
How to fix it: Weigh freight accurately before shipping. Use a freight scale, not guesswork. If you’re consistently off, you’re throwing away money on reweigh fees.
Incorrect Freight Class
This is where most shippers hemorrhage money without knowing it. Freight class determines your rate per hundredweight. Getting it wrong can double your costs.
Example: You ship machinery parts at 12 pounds per cubic foot (Class 85). You declare Class 70 thinking it’ll save money. The carrier reclasses to 85, charges the higher rate, and adds a $50 reclass fee.
How to reduce LTL freight costs here: Calculate freight class correctly using the NMFC guidelines. When in doubt, declare the higher class. Reclassification penalties cost more than declaring correctly upfront.
Accessorial Charges Nobody Warned You About
Accessorial fees are where carriers make real money. Common accessorials include:
Liftgate service: $75-150 per shipment when delivery location lacks a loading dock.
Inside delivery: $100-200 when freight must go inside a building rather than dock delivery.
Residential delivery: $100-175 for deliveries to residential addresses.
Limited access: $75-125 for deliveries to locations carriers consider “limited access” (churches, schools, construction sites, storage units).
Detention: $50-100 per hour when trucks wait longer than allowed free time (typically 2 hours).
Appointment delivery: $50-100 to schedule specific delivery times.
These charges compound. A shipment needing liftgate, inside delivery, and residential service could add $350+ to a $400 freight bill.
How to reduce LTL freight costs from accessorials: Declare all special requirements upfront. Carriers charge more when drivers arrive unprepared. Ship to commercial addresses with docks whenever possible. Have freight ready when trucks arrive to avoid detention.
Why Shopping for the Lowest Rate Backfires
Here’s a mistake that seems logical but costs you money: constantly shopping for the absolute lowest LTL rate on every shipment.
The Problem With Rate Shopping
When you shop every load to 5-6 carriers looking for the best price, several things happen:
Service quality becomes unpredictable. You’re using different carriers constantly. Some are reliable. Some aren’t. Your customers experience inconsistent delivery.
You lose negotiating leverage. Carriers give better rates to consistent customers. When you spread 50 shipments across 10 carriers monthly, none see you as valuable. Concentrate 40 shipments with 2-3 carriers, and suddenly you matter.
You waste time. How much time do you spend getting quotes, comparing rates, and entering information? If you spend 20 minutes per shipment shopping rates on 200 annual shipments, that’s 67 hours. What’s your time worth?
Hidden costs emerge. The carrier with the lowest quote often adds accessorials you didn’t anticipate. The “expensive” carrier’s all-inclusive quote might actually cost less.
A Smarter Approach to Reduce LTL Freight Costs
Instead of shopping every load, identify 2-3 carriers that serve your primary lanes well. Negotiate contract rates based on volume commitments. Use those carriers consistently.
This approach delivers better rates through volume discounts, more reliable service, and stronger relationships. When problems arise, carriers prioritize customers who give them consistent business.
How Improper Packaging Increases LTL Freight Costs
The way you package freight directly impacts what you pay.
Density and Dimensional Weight
LTL carriers charge based on density: weight per cubic foot. Lower density (lighter freight taking up more space) costs more because it’s less profitable for carriers.
Example: You ship 500 pounds of lightweight components loosely packed on a 48x40x48 pallet. That’s 64 cubic feet. Density is 7.8 pounds per cubic foot (Class 125).
Repack those same components efficiently on a 48x40x36 pallet. That’s 48 cubic feet. Density increases to 10.4 pounds per cubic foot (Class 100).
Same freight, same weight, but you dropped two freight classes by better packaging. On a 500-mile shipment, that could save $75-150 per load.
How to Optimize Packaging to Reduce LTL Freight Costs
Use smaller pallets when possible. Don’t put 200 pounds on a 48×48 pallet if it fits on a 48×40 pallet.
Stack vertically within reason. Taller, denser loads cost less than short, spread-out loads.
Secure properly. Freight that requires special handling due to poor packaging gets classified higher.
Use the right pallet. A proper 48×40 pallet costs $10-15. The upcharge for improper packaging can be $50+ per shipment.
Better packaging reduces LTL freight costs and reduces damage claims. Both improve your bottom line.
Freight Class Optimization: The Biggest Opportunity
If you want to reduce LTL freight costs significantly, mastering freight class is essential.
Understanding Freight Class
The National Motor Freight Classification (NMFC) system assigns every commodity a freight class from 50 to 500. Class is determined by:
Density: Weight per cubic foot.
Stowability: How easily freight fits with other shipments.
Handling: How difficult freight is to load and unload.
Liability: Risk of damage or theft.
Most shippers only consider density. The other factors matter too, but density is the primary driver for most commodities.
How to Calculate Freight Class Correctly
Step 1: Measure your pallet dimensions in inches (length x width x height).
Step 2: Calculate cubic inches: length x width x height.
Step 3: Convert to cubic feet: divide cubic inches by 1,728.
Step 4: Calculate density: divide weight by cubic feet.
Step 5: Reference the freight class chart for your commodity and density.
Example:
- Pallet dimensions: 48″ x 40″ x 36″
- Cubic inches: 69,120
- Cubic feet: 40
- Weight: 600 pounds
- Density: 15 pounds per cubic foot
- Freight class: 85 (for most commodities at this density)
Getting this right eliminates reclass fees and ensures accurate quotes.
When to Challenge Your Freight Class
Some commodities have NMFC numbers that allow for better classification. If you consistently ship the same product, research its specific NMFC number.
Sometimes you can demonstrate that your freight should be classified differently based on how it’s packaged or its actual characteristics. Carriers may require supporting documentation, but permanent classification changes can reduce LTL freight costs by thousands annually.
The Contract Rate Strategy That Actually Works
Most shippers approach LTL contracts wrong. They negotiate once, sign for a year, and forget about it. Meanwhile, their freight patterns change and they overpay.
Building Effective LTL Contracts
Analyze your shipping patterns. Before negotiating, understand your top 10-15 lanes by volume. These represent 70-80% of your spend.
Get competitive quotes on high-volume lanes. Don’t ask for blanket discounts. Ask for specific rates on specific lanes with specific volumes.
Negotiate based on volume commitments. Carriers discount for guaranteed volume. If you ship 20 loads monthly to specific destinations, that’s worth negotiating.
Include review clauses. Build in quarterly or semi-annual rate reviews. If your volume increases or decreases significantly, rates should adjust.
Understand minimum charges. Many contracts include minimum charges per shipment ($150-250). If you ship many small loads, this matters.
When Contract Rates Don’t Make Sense
Contract rates work best when you have predictable, consistent volume. If your shipping is sporadic or unpredictable, spot market pricing through a 3PL might deliver better results.
A good 3PL can access contract rates from multiple carriers based on aggregated volume across their customer base. You benefit from volume discounts without committing to specific carriers or lanes.
Avoiding Detention and Other Time-Based Charges
Time is money in LTL shipping. When carriers wait, you pay.
Understanding Detention Charges
Carriers allow free time for loading and unloading (typically 2 hours). Beyond that, detention charges apply at $50-100 per hour.
Common detention scenarios:
Your receiving dock is backed up. The LTL truck waits 4 hours. You pay $150-300 detention.
You scheduled a pickup but freight isn’t ready. The driver waits or reschedules. You pay detention or a redelivery fee.
Your facility has limited dock space. Trucks wait for available doors. You pay detention repeatedly.
How to Reduce LTL Freight Costs From Detention
Have freight ready before scheduled pickups. Don’t call for pickup unless freight is staged and ready to load.
Improve dock scheduling. If you receive multiple shipments daily, implement appointment scheduling to prevent backups.
Communicate accurately. If you need 4 hours to load a shipment, tell the carrier upfront. They’ll schedule appropriately.
Cross-dock when possible. For high-volume facilities, cross-docking eliminates staging delays.
Eliminating detention charges can reduce LTL freight costs by 5-10% for high-volume shippers.
Using Technology to Reduce LTL Freight Costs
Manual processes create errors. Errors create costs. Technology eliminates both.
Tools That Help Reduce LTL Freight Costs
Freight scales: Accurate weights prevent reweigh fees. A $200 scale saves thousands in annual reweigh charges.
Dimensioning tools: Laser dimensioners ($500-1500) provide exact measurements for density calculations.
TMS systems: Transportation management systems automate quoting, booking, and documentation. They reduce errors and save time.
Rate shopping software: If you use spot market frequently, rate shopping tools compare carriers instantly and store accurate freight profiles.
Online freight class calculators: Free tools help ensure accurate classification before shipping.
The investment in these tools pays for itself quickly when you reduce LTL freight costs through accuracy and efficiency.
The 3PL Advantage for Managing LTL Freight Costs
Third-party logistics providers offer advantages that help reduce LTL freight costs beyond what individual shippers can achieve.
How 3PLs Reduce LTL Freight Costs
Volume discounts. 3PLs aggregate volume across multiple shippers, accessing deeper discounts than individual companies can negotiate.
Carrier relationships. Established 3PLs have relationships with dozens of carriers, ensuring competitive rates and reliable service.
Expertise. 3PLs handle freight classification, proper documentation, and accessorial management daily. They avoid costly mistakes.
Claims management. When freight is damaged or lost, 3PLs manage claims processes, recovering costs you might write off.
Time savings. Your team focuses on core business activities instead of freight logistics.
When to Use a 3PL
If you ship more than 10-15 LTL loads monthly and don’t have dedicated logistics staff, a 3PL likely saves you money. Even with their markup, the cost savings from better rates, fewer errors, and reduced claims often exceed their fees.
If you have inconsistent volume or ship to many different destinations, 3PLs provide flexibility without long-term carrier commitments.
Practical Steps to Reduce LTL Freight Costs Starting Today
Ready to cut your LTL freight costs? Here’s your action plan.
Immediate Actions (This Week)
Audit your last 20 LTL shipments. Look for reweigh fees, reclass fees, and unexpected accessorials. Identify patterns.
Buy a freight scale. If you don’t have one, get one. Accurate weights eliminate reweigh fees immediately.
Create a checklist for your shipping team. Include: weigh freight, measure dimensions, calculate density, verify freight class, declare all accessorials needed.
Short-Term Actions (This Month)
Analyze your top shipping lanes. Identify where you ship most frequently. These are your negotiation opportunities.
Review your freight class declarations. Are you consistently being reclassed? Fix your classification process.
Evaluate your packaging. Can you reduce pallet heights or use smaller pallets to improve density?
Long-Term Actions (This Quarter)
Renegotiate carrier contracts or engage a 3PL to manage LTL freight. Base decisions on actual shipping data.
Implement formal processes. Document how your team should prepare, measure, weigh, and classify freight.
Train your shipping staff. Make sure everyone understands how their actions affect freight costs.
Reduce LTL Freight Costs: The Bottom Line
You can reduce LTL freight costs by 15-20% without changing carriers or shipping less frequently. The key is eliminating self-inflicted costs through better processes, accurate classification, and smarter strategies.
Most manufacturers and distributors overpay for LTL shipping because they don’t understand the pricing model or make preventable mistakes. Now you know better.
Start with accurate weights and dimensions. Master freight class calculation. Eliminate unnecessary accessorials. Build relationships with reliable carriers. Use these fundamentals to reduce LTL freight costs immediately.
If managing LTL freight complexity isn’t the best use of your time, that’s where a logistics partner adds value. We help manufacturers and distributors reduce LTL freight costs while improving service reliability.
Get Help to Reduce Your LTL Freight Costs
Want to find out where you’re overpaying on LTL freight? We’ll analyze your shipping patterns and show you specific opportunities to reduce LTL freight costs.
Contact Firehouse Freight for a free freight cost analysis, or give us a call. We’ll give you straight answers about where you can save money.
