Less-than-truckload (LTL) shipments grew from a demand for products and services that were not being provided elsewhere. Formally, the only options were localized container loads (LCL) and full container loads (FCL), while courier services were typically used for document shipments or the sending of money. Unfortunately, these methods of shipping did not always satisfy business needs. And now, more than ever, there is more pressure from small to medium-sized companies that need to send something outside the bounds of a courier service or a container, and needing to make shipments which are not a full truck load. These businesses require their goods to be shipped at regular and frequent intervals. Thus, the LTL concept was born.
Let us consider the business context at the inception of LTL shipments. Agriculture-based export businesses found that sending their deliveries was difficult because their volumes did not meet full truck load or container load requirements. Additionally, some foods, such as fish, will rot. The freight forwarders had to respond to the needs of these industries. They arranged for specialized services, such as refrigerated vans or trucks, for shipping these goods. This arrangement caught on and has been used for sending shipments of a few cartons to less-than-full truck loads, whether to an international or domestic destination.
The major advantage offered by LTL is trans-shipment for international businesses. LTL makes it possible to send a less-than-full truck load to be exported or imported to different countries. Without the creation of LTL hundreds of thousands of small or medium-sized business entities would have suffered from the high transportation costs in their operations. This could have caused price levels to shoot up and would have caused the entire world economy to suffer. LTL provides a level of competition for the transport industry, while offering economic solutions to customers’ transportation needs.
The idea for LTL was further appreciated when international forwarders found that some LCL – localized container loading – shipments were declared to be FCL – full container loads. When goods get handed over to the shipper, the loads are reduced due to quality control issues. To make the best use of their space, forwarders started to seek smaller units of deliveries to fill the container and minimize their operating costs.
Since their conceptualization and inception, LTL shipments have made business possible for companies of varying sizes and have helped to bolster the global economy.