by Sam Franklin | June 01, 2022 | 18 min read
Freight transport 101Get funded
Last updated: September 27, 2022
Transportation plays a key role in business. Whether you run a large eCommerce or a start-up business, you need to move goods from your suppliers to your warehouses and final customers. Because of this, you need to understand how freight transport works and how to implement an efficient freight system for your small business.
According to data by Statista, approximately 80% of all goods are transported via sea to support world trade. However, freight shipping is also done by air or land.
In this article, we will look at what freight shipping involves, the benefits, types, costs, and more.
Table of contents
- Freight transport definition
- The benefits of freight transport
- Freight transport types
- Freight transport costs
- How does freight apply to eCommerce order fulfilment?
- Freight transport FAQ
Freight transport definition
Freight transport involves the commercial transportation of commodities, goods, or cargo either by sea, land, or air. Business owners rely on this form of transport to get their goods from different locations to their customers.
What is considered a freight shipment?
To understand freight shipment, you need to understand the difference between freight and shipping. Freight is the products or goods that need to be transported. These goods are often shipped in bulk or are too heavy or big to transport via traditional mail. On the other hand, shipping is the transportation of cargo from one place to another using different forms of transport.
The most common means of transport for freight shipping includes railroad cars, trucks, aircraft, and large ships carrying containers.
The benefits of freight transport
Freight shipping is one of the most effective ways to transport your goods. Here are some of the benefits.
Lower shipping costs
You can choose to lower your freight shipping costs by using cost-effective freight methods. For instance, if you opt for a partial truckload or less than a truckload, you’ll only pay for the space taken by your packages.
If the dimensional weight of your cargo is higher, your load capacity increases; affecting your freight shipping costs. However, with freight transport, you can split the overall cost if you ship with other businesses. This is ideal for a small business that requires freight shipping services.
Access to top carriers
The most important factors in freight transport are that your packages arrive safely and on time. You need to pick a quality and efficient freight service provider to ensure this happens. Working with top freight carriers is less hectic and reduces errors for your business, such as product delays.
Research shows that 25% of consumers are willing to pay a premium price for same-day deliveries. Most consumers today also expect that businesses will deliver their products on time. Therefore, if you have freight that has a tight delivery window, you need to choose a shipping company that offers freight services that can work within your time frame.
Apart from time efficiency, you also need to ensure that your goods arrive safely. Freight shipping lowers the risk of theft and damage to your goods. Most companies that offer freight shipping services have tracking notifications and details that enable you to monitor order pick-up, transit, drop-offs, and any delays.
Freight transport types
When shipping freight, there are different types of methods to choose from. Let’s look at the differences between them.
Less than truckload freight
Also known as LTL, less than truckload freight is used when transporting small loads or shipments that don’t need an entire trailer. This freight shipping method is commonly used when the freight is between 150 and 15,000 pounds.
With LTL freight shipping, you only pay a fee to cover the portion of the truck your package occupies. Since there’s unoccupied space, your goods will be shipped together with packages belonging to other customers.
For LTL freight shipments, you need to have accurate shipment measurements to maximise capacity. To protect your shipment from damage, your goods should be loaded on pallets starting with the heaviest ones first. Furthermore, the bill of loading should be provided to the shipment company; it acts as a shipping freight receipt.
What are the benefits of LTL shipping?
If you choose this transport method, here are some of the benefits.
● Reduced costs because you only need to pay for the portion occupied while the other shippers cover the rest.
● Increased package security since the packages are packed into pallets before being loaded onto a truck.
● LTL has tracking capabilities through the shipment reference number, bill of lading number, and PO number.
● Additional service options like inside pickup and delivery.
What factors determine LTL shipping rates?
Your business will pay higher freight shipping rates if the goods are being sourced from a distant location. In addition, the rates are determined by weight and dimension. The rate will be higher if the package is big. You'll also pay more if your LTL freight shipment is expedited or the goods require special equipment and handling.
Full truckload freight
Full Truckload Freight (FTL) involves shipping your goods on a dedicated truck. You can transport bulky goods or pallet loads that are more than 150,000 pounds. Businesses use this method when they have enough items to fill a truck, the commodities are time-sensitive, or they want the shipment to be in its own trailer to avoid damage.
You can use a dry van, refrigerated truck, or flatbed, depending on the type of product you need to ship.
What are the benefits of FTL shipping?
Here are the pros of using this method.
● Your shipment is less susceptible to damages because there’s less handling.
● Goods shipped via FTL arrive at their destination faster than with LTL.
● It could be more cost-effective to book one truck for the entire shipment instead of multiple LTL shipments.
Partial truckload freight
Also known as PTL, partial truckload freight is meant for large shipments that don’t need a dedicated trailer. A hybrid between LTL and FTL, partial truckload freight involves shipments of more than 5,000 pounds or six or more pallets.
What are the benefits of PTL shipping?
Partial truckload freight shipping comes with its own benefits. Here are some of them.
● Your freight stays on one truck during transit, so you'll get faster transit times than LTL.
● Freight class is not required; therefore, you can avoid extra charges that come with freight reclassification.
● The freight is handled less, reducing the chance of damage.
When should you use PTL?
Partial truckload shipments are effective if you have fragile freight that requires careful handling. If your freight is light but needs a lot of space, PTL is a better option than LTL. In addition, this method is ideal if you want to save costs. The freight shipping rates are lower because you’ll only pay for space used.
Intermodal rail freight
Intermodal involves using two freight shipping methods to transport goods e.g., rail and truck. But it can also involve other modes of transport like ships to streamline the entire process.
What are the benefits of intermodal rail freight?
If you use this type of freight shipping, here are some of the benefits you should expect.
● Lower costs because rail transport uses less fuel than road transportation.
● It's a reliable freight shipping method since you can use different transportation systems.
● Minimises carbon footprint.
When should you use intermodal?
Intermodal is a good option if your business sends multiple packages to the same destination every week. It’s also important if you want to reduce your organisation’s carbon footprint.
Air freight shipping is the fastest shipping option that involves transporting goods via charter or commercial aircraft. You can use this method if you need to transport smaller packages. However, you need to keep in mind that this is a costly alternative.
What are the benefits of air transport?
● It’s the fastest means of transport to move goods around the world.
● It’s ideal for time-critical and urgent cargo.
● Goods can be delivered to different locations both locally and internationally.
● Freight services are secure, thanks to airport security.
When should you use air transport?
If your business deals with perishable products or urgent cargo, air shipment is the best option. The main advantage of this freight service is speed; hence your shipment will get to its destination much faster than by ship or road. Furthermore, since air transport is expensive, you can use this method if you have enough budget to cover the transportation cost for international shipping.
This form of freight shipping uses sea vessels to transport large shipping containers worldwide. Ocean freight services are a critical part of international trade. According to the International Chamber of Shipping, 11 billion tons of goods are transported by ship annually.
What are the benefits of ocean freight?
Transporting goods by sea comes with its own benefits.
● Ocean freight shipping is recommended for bulky and heavy shipments.
● It’s less expensive than air transport.
● Ocean freight is global; carriers can pick up cargo containers at different ports worldwide.
● Freight shipping costs are tailored based on the weight carried.
● You can select different shipping options between LTL and FTL.
When should you use ocean freight shipment?
You should use ocean freight shipping when transporting bulky goods and commodities. Although it takes longer, it’s a much cheaper option if the shipment is bulky.
Expedited shipping involves shipment that is time-constrained and needs to be delivered quickly. This form of transportation uses trucks or air freight. Trucks delivering expedited goods move from pickup to delivery without making any stops. Because of this, it’s one of the most expensive shipping methods.
What are the benefits of expedited freight shipping?
Here are the advantages of using this shipping method.
● Your business will meet your delivery deadlines.
● The freight gets delivered fast enough to avoid damage if you deal in perishable products.
When should you use expedited freight shipping?
This type of freight shipping comes in handy when you need to deliver products fast. Therefore, if you have an urgent order from a customer, you can pay extra costs to get your freight shipments expedited.
Freight transport costs
If your business is involved in freight shipping, you need to factor in freight costs in your budget. Freight cost is the price you incur when the cargo is transported from one place to another.
Factors that determine freight transport rates
Freight rates are constantly changing due to the following factors.
This is the theoretical weight of the package. The bigger your package, the more the density and room occupied, which increases the cost; therefore, you need to know the accurate weight measurements before shipping freight. Most carriers will calculate the weight of your shipment based on how much space it occupies.
To get the correct weight measurements, you also need to factor in the length and height. You can mitigate the costs by using high-quality, low-weight packaging. Before shipping freight, ensure that you get the exact cost from your freight carrier.
If your business is involved in cargo that needs special handling, such as fragile items, perishable products, or hazardous materials, you'll incur more costs during freight shipping.
This is because the cargo needs additional care during transit. In addition, you might need to pay for faster transportation either via air or expedited shipping.
To cater for these transport costs, ensure that you budget for freight shipping early on. You can also compare the different freight rates from several companies to get the best and cheaper alternative.
Origin and destination of the package
Whether you are shipping freight from overseas or domestically, you’ll incur some costs that change depending on the distance. Your freight shipping rates will be affected by how far your package will need to travel from the origin. The rate will increase according to the distance between the origin and final destination.
The freight costs will also go up based on the geographical location and complexity of the delivery. Businesses can reduce the freight costs due to distance by adding fulfilment centres near the delivery areas.
The freight method you choose has a significant effect on how much you spend on shipping. If you go with air shipping, you'll pay more compared to shipping freight via sea, rail, or road. If you are not in a rush, you can use ocean freight which is much slower but cheaper.
Therefore, before selecting a shipping method for your business products, ensure that you compare the costs. Selecting the wrong form of transportation could cost the business and lead to massive losses.
If freight prices are too complicated for you, there are controls in place known as freight classification. This classification is important because it provides you and your carrier with a uniform and standardised pricing structure for freight shipping.
It breaks down the pricing for different types of cargo, so you can easily calculate how much you need to pay.
Several factors determine the freight class of your cargo:
● Ease of handling - how much care your cargo needs.
● Density and stowability - this determines if your cargo is easy to stow based on its weight and size.
● Liability - the value of your cargo and the risk involved in transporting it.
There are 18 freight classes from 50 to 500. You'll pay more if your class is higher, making shipping more costly. In this case, 50 is the lowest class, while 500 is the most expensive option.
Time-sensitive goods have to be transported much faster. For instance, if your business received an urgent order, you might have to go with expedited freight or air shipping to get the goods delivered within the timeline.
Compared to ocean, rail, and road shipping options, the faster forms of transportation are more expensive.
Type of packaging
Your packaging contributes to the overall weight of your package. To avoid paying extra for the packaging, you should use low-weight options. When the cargo weight is low, the class will be lower, which reduces the freight rate.
Freight costs are also heavily affected by seasonal trends. When the transportation demand is higher, the rates naturally increase. To avoid spending above your budget, you can use the supply chain forecast and trends from previous years to determine the best time to ship your cargo.
When there are disruptions such as shortages, weather strikes, or a pandemic, the supply chain gets affected. When the supply chain gets hiccups, transportation and freight costs change. This occurs when there are rerouted deliveries or fulfilment centres are not working efficiently.
These disruptions affect the normal supply of goods and increase the final price.
What is the cheapest way to ship large packages?
Shipping large packages does not have to be expensive. Here are the cheapest ways to ship such cargo.
Compare different rates with freight brokers.
Freight brokers act as intermediaries between customers who need to ship products and the authorised freight shipping carriers. By using these brokers, you can find reliable freight carriers with the best rates.
These brokers have a strong relationship with the carriers; therefore, they are more likely to offer your business competitive rates. In addition, they focus more on customer service; so, they'll handle your cargo with care, especially if you have fragile goods.
Cheap shipping with UPS, DHL, or FedEx
If you want to save money when sending large packages, it's advisable to compare prices from shipping service providers like UPS, DHL, or FedEx. These companies offer lower prices depending on the weight of your packages. Here's a breakdown.
● USPS: they have small, medium, and large flat rate boxes. The freight shipping price is higher for larger boxes. With Priority Mail, packages are delivered in one to three days. If your goods don't fit in flat-rate boxes, they offer Retail Ground shipping that takes two to eight days.
● DHL: this is the best freight option for international shipping because they partner with several airlines worldwide. Their air freight services provide same-day delivery and other shipping options such as five to seven days delivery on Air Economy.
● FedEx: this freight shipping company is ideal if your packages are heavy. The maximum measurements for their Ground Shipping service are 150 pounds in weight, 165 inches in length, and 108 inches in width. The delivery time is one to seven days.
How does freight apply to eCommerce order fulfilment?
eCommerce businesses use freight shipping to transfer inventory to their fulfilment centres. Therefore, you'll need to book freight shipments if you are working with a third-party logistics provider (3PL).
If you are running a small business, you can work with a logistic service provider to handle the shipping and ensure that the inventory arrives at the fulfilment centre undamaged and on time.
Freight transport FAQ
Since freight shipping is a necessity for most businesses, you need to fully understand how it works before transporting any products. Here are some of the common questions and their answers.
What is a bill of lading?
A bill of lading is a freight shipping document issued by the carrier. The carrier uses this document to acknowledge they have received the goods for shipping. While it’s commonly used when shipping by sea, it may also be used for other types of shipping.
What can be shipped via freight?
Fortunately, shipping caters to almost everything. However, it’s advisable to confirm the rules for transportation, including prohibited goods, with your carrier. Some freight shipping companies will have limitations on items such as frozen foods that are temperature-sensitive, hazardous materials like aerosols and fireworks, or high-value items like jewellery and watches.
What type of freight solution do I need?
Before you ship any goods, you need to select a freight solution that addresses your business needs. Some of the factors to consider include freight costs, delivery urgency, and cargo weight.
If you are new to this business, you can hire a provider to guide you on freight shipping services and how to choose the best solution.
What’s the difference between parcel and freight?
Parcel shipping refers to individual or lightweight shipments typically handled by most carriers. Most parcel shipments are limited to 150 pounds. On the other hand, freight shipping is more suitable for heavy and bulky goods, especially for long-distance journeys.
Most eCommerce businesses ship goods from the manufacturer to the fulfilment centre via freight shipping. Direct orders from the fulfilment centre to the consumer are often shipped via parcel shipping.
What is freight classification?
Freight classification is a standardised method and uniform pricing structure provided to carriers and shipping consumers when calculating freight costs. Freight class is determined based on density, ease of handling, stowability, and liability. The class numbers are usually between 50 and 500.
Should I use a freight delivery service?
If you have no experience in shipping or have minimum resources to find the best freight carrier, you can use a freight delivery service. These companies will help you find reliable carriers, get you competitive rates and manage the entire shipping process.
How to ship freight?
To ship freight, you must know all the basics and terminologies such as freight classification, bill of lading, how to use a freight class calculator, proper packaging techniques, and how to ship different products safely.
What is truckload shipping?
Truckload shipping involves larger shipments that take up more than half or a full 48' or 53' trailer. This shipping method is used when the shippers have enough cargo to fill up a truck to capacity or if you have time-critical shipments that need to be transported alone.
What is LTL freight transport?
LTL shipping is used when a shipper wants to transport light cargo that doesn’t need an entire trailer. It’s commonly used for goods weighing between 150 and 150,000 pounds.
What is partial truckload shipping?
PTL shipping is a good choice if you have a large shipment that doesn't need a full truck. It involves shipments weighing more than 5,000 pounds or six or more pallets.
What is flatbed shipping?
This involves transporting cargo that doesn't need the enclosure of a dry van. This shipping method is used for cargo that is bigger than the dimensions of a standard trailer. Because of its design, cranes can load a flatbed from all angles.
Freight shipping is an integral part of many businesses today, especially if you are in eCommerce. If you need to ship goods from your suppliers to your customers, you must choose the best shipping method according to your needs. This ensures your cargo arrives at its final destination safely and on time.
Sam founded his first startup back in 2010 and has since been building startups in the Content Marketing, SEO, eCommerce and SaaS verticals. Sam is a generalist with deep knowledge of lead generation and scaling acquisition and sales.