BrillDog discusses how SMBs should understand the key differences between LTL and parcel shipping

BrillDog, the only supply chain technology built for small-to-medium-sized businesses (SMB), discusses how shippers may be confused about when to ship something via parcel or LTL and need to understand which mode to select based on schedules, cost, and the product being shipped. Many shippers think the choice of mode depends on the size and weight of the products, but there are exceptions that shippers should know about.

“In the old days, shippers used arbitrary rules that stipulated parcel for shipments of less than 150 pounds and LTL for greater weights,” says Sam Polakoff, Founder and CEO, BrillDog. “In today’s market, that no longer applies. The decision requires an algorithm to be applied on a shipment-by-shipment basis. Critical variables include which parcel and LTL carriers are being used in addition to tried-and-true factors including, but not limited to, traffic lane, density, value and even the time of year.”

The BrillDog TMS, part of the BrillDog Supply Chain Management System (SCMS), will soon offer shippers LTL, TL, spot, and parcel rates. Besides the size and weight of the shipment, shippers need to consider the following:

• Delivery Requirements – Are the shipments going to a business or a residence? Typically, parcel carriers are better equipped for routine residential deliveries. When LTL carriers perform this service, it often costs more.

• Fragility of Shipment – Is the item being shipped fragile and needs more protection in transport? If so, the shipper may need to choose parcel shipping. Parcel carriers often have strict packaging requirements for fragile items to ensure they are adequately protected during transport. LTL shipping is generally more suitable for sturdier items, and the items are typically placed on pallets.

• Cost – LTL shipping is more cost-effective for larger and heavier shipments, while parcel shipping is more cost-effective for smaller and lighter shipments. Both carriers assess extra costs for items with poor density and/or extreme length.

• Traffic Lane – LTL carriers set base rates to accommodate for origins where freight is plentiful and for areas where freight volumes are sparse. Each carrier’s network is different and thus, so are the base rates. Parcel carriers tend to be more consistent across geographic zones. Both LTL and parcel carriers will discount for volume and desirable freight moving in the direction that best serves the carrier’s network.

• Time of Year – More and more, carriers in both LTL and parcel are adjusting their pricing and capacity handling limit to accommodate volumes that rise and fall at different times of the year. For instance, parcel carrier rates tend to rise with greater capacity demand around Christmas while for LTL, the same is true as companies tend to fill as many orders as possible at the conclusion of a fiscal quarter or year-end.

When it comes to selecting the right transport mode, a transportation management system can help shippers create rules based on historical performance, preferences, volume and more, for selecting the right mode and carriers, streamlining transport operations. API rate calls versus static table rates will work in concert with the BrillDog operating system to deliver optimal results for smaller shippers. The BrillDog SCMS will level the playing field for small to medium-sized shippers, providing supply chain enterprise functionality for transportation management, claims management, shipment tracking, reporting, and more.