Glossary · Trucking Operations
Less-Than-Truckload (LTL).
Freight model where carriers consolidate multiple shippers' loads into a single trailer; loads are typically 100–10,000 lbs and below truckload.
What it is
LTL — Less-Than-Truckload — is the freight model for shipments too big for parcel but too small for full truckload. Carriers consolidate multiple shippers' loads onto a single trailer at terminals, run the consolidated trailer to a destination terminal, deconsolidate, and run city deliveries from there. Standard LTL load size is 100–10,000 pounds, though pricing extends in both directions. Major LTL carriers include FedEx Freight, Old Dominion, XPO, Saia, and Estes.
Pricing is driven by NMFC freight class — a 50-to-500 scale based on density, value, fragility, and stowability. Class 50 (dense, low-value, easy to handle) is cheap; class 500 (light, high-value, fragile) is expensive. Loading typically requires a dock or liftgate at both ends. Transit times run longer than FTL because of the consolidation and deconsolidation cycles at origin, intermediate, and destination terminals.
Why it matters for trucking finance
LTL operators face different underwriting than full-truckload OTR. Revenue per load is lower but volume is higher — the math works on freight density rather than per-load rate. Equipment is often pup trailers (28-foot) or city trucks rather than 53-foot OTR sleepers. For owner-operators, LTL is a regional model that allows being home daily, which affects both lifestyle and lender capacity assessment (different debt-service ratios than OTR). Insurance differs because of more loading-and-unloading exposure and more frequent stops per day.
Related terms
- Full Truckload (FTL) — Freight that fills an entire trailer for a single shipper, typically over 10,000 lbs or by volume; the standard model for OTR carriers.
- Hot-Shot Trucking — Time-sensitive freight hauled by light- or medium-duty pickups with goosenecks, typically Class 3–5 trucks running expedited LTL loads.
- Dry Van — Standard enclosed trailer (53-foot box) for non-perishable, non-temperature-controlled freight; the most common trailer type in trucking.
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