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Shared truckload solves LTL, FTL inefficiencies

Shared truckload is a growing industry segment (Photo: Jim Allen/FreightWaves)

The transportation industry is known for its volatility and rigidity. This is especially true of the less-than-truckload (LTL) model, in which rates and offerings depend heavily on everything from asset availability to proper staffing. While traditional LTL works well for some customers, others feel constrained by the legacy model’s strict guidelines and fee structures.

“There are tremendous faults in the way the freight has to move in the LTL model, as great as it is. If one cog in the machine breaks, freight doesn’t get delivered. There are a lot of people required to make the process work,” Todd LaFond, Flock Freight vice president of enterprise sales, said. “If there are not enough dockworkers, freight is not moving. If there are not enough pedal drivers, freight is not moving. If there are not enough line-haul drivers, freight is not moving.”

The coronavirus pandemic has highlighted these long-standing inefficiencies within the industry and provided non-asset-based companies with an opportunity to showcase their own innovative solutions. That is exactly what Flock Freight has done in the shared truckload (STL) space.

Shared truckload alleviates LTL pain points. In fact, Flock Freight is currently working with national and regional LTL providers to remove the suboptimal freight from their networks altogether. The company has had collaborative, high-level discussions with several of its LTL partners and is experiencing mutually beneficial outcomes. Flock Freight looks forward to synergies with all of its LTL partners and the resulting benefits, which could transform the industry.

The shared truckload model utilizes full truckload (FTL) service to deliver partial shipments for multiple companies in one truck. Even after STL’s multiple pickups and drop-offs are accounted for, this model requires far fewer bodies to pull off, making it safer – and ultimately more scalable – during a global pandemic. 

Keeping the transportation industry as safe as possible is especially important given that the average age of truck drivers is about 56, which makes them prime candidates for coronavirus complications.

The STL model offers more than just safety and efficiency benefits, however. It also provides a budget-friendly model for customers that have “nonoptimal” or midsized LTL freight to move. In Flock Freight’s model, shippers only pay for the space they take up. Configuration does not matter, only linear feet, according to LaFond. This means customers do not end up paying fees for the shape of their freight in a traditional LTL space, but it also means that they do not end up paying for empty space like they would in a traditional FTL transaction. 

One cause of strain on LTL networks is large-volume freight. A typical LTL RFP requires the carrier to honor the tariff up to 20,000 pounds. Typically, freight between 5,000 and 20,000 pounds is the least profitable for LTL carriers to move, leading them to be less aggressive with their discount to ensure that their profitable smaller freight outweighs their losses on larger freight. The result is suboptimal for both the shipper and carrier. One solution for this that many shippers have applied is to redefine “RFP” versus “shared truckload”. They run an LTL request for proposals up to 5,000 pounds or 10 linear feet, getting a more aggressive discount from the carrier. Meanwhile, they get committed shared truckload pallet rates for all freight that measures 10 to 44 linear feet. The outcome? Better rates and service on shipments of all dimensions.

“We have access to 2 to 3 million power units of full truckload carriers moving freight around this country, and that capacity can go online and offline very quickly,” Flock Freight Vice President of Operations and Analytics Peter Frys said. “Shared truckload benefits from economic incentives that occur in the truckload spot market. STL is very responsive to rate changes in any given lane.”

In addition to providing safety and pricing benefits, Frys noted that STL also offers customers the reliability and visibility that truckload carriers have become known for over the past several years. That means shippers will be able to track their freight throughout its entire journey, not just at a handful of checkpoints along the way. 

Shared truckload fills a need that exists between traditional LTL and traditional FTL, while simultaneously correcting inefficiencies found in both legacy models. It is a freight model that is both poised to fulfill customer needs today and ready to respond to changing expectations in the future.

Ashley Coker

Ashley is interested in everything that moves, especially trucks and planes. She covers air cargo, trucking and sponsored content. She studied journalism at Middle Tennessee State University and worked as an editor and reporter at two daily newspapers before joining FreightWaves. Ashley spends her free time at the dog park with her beagle, Ruth, or scouring the internet for last minute flight deals.