The effect of e-commerce on the LTL industry

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E-Commerce Impact on LTL Freight

Continued e-commerce growth will be one of the most significant factors impacting the LTL industry. Rising customer expectations, shrinking delivery windows, and evolving warehousing practices mean LTL carriers will need to continue to adapt to meet demand and stay competitive.

What is E-Commerce Freight?

E-commerce LTL freight helps businesses lower their warehousing costs and ensure faster delivery by transporting inventory closer to their customers. By carrying pallets and crates from multiple merchants on the same truck, LTL providers offer professional shipping at a lower rate.

Any shipment with dimensions greater than 30in x 30in x 30in, or weighing more than 150 pounds is considered freight. Because the limits of freight shipments are quite high - up to 10,000 pounds, and between 1-10 pallets - LTL is an attractive option for transporting a wide variety of items. This is especially true for small and medium-sized businesses.

How Can the LTL Industry Position Itself to Capture More of the E-Commerce Freight Market?

As e-commerce continues to account for a greater share of retail sales in the wake of the 2020 pandemic, emerging trends will provide unique opportunities for the LTL industry.

Historically, shoppers relied on e-commerce for items like electronics, books, clothing, accessories, and smaller household appliances. This led to an increase in smaller, more frequent shipments. But with the onset of the pandemic, which saw many of us confined to our homes, consumers  - especially in the US - increasingly turned to e-commerce retailers for bulkier items like desks, chairs, sofas, and other large household goods.

With an increase in both the quantity and size of items being purchased online, the LTL industry finds itself positioned to address several critical logistical problems.

First, consumer expectations around faster delivery times - sometimes as soon as same-day - mean that retailers have modified their supply chains to support just-in-time replenishment, storing a greater amount of their inventory in regional warehouses, metro hubs, and local distribution centers. To ensure these locations are appropriately stocked and operating efficiently, retailers are leaning harder on smaller, more frequent less-than-load shipments.

Second, many LTL freighters have increasingly leveraged their fleets to handle final-mile delivery of certain larger items to meet a growing demand.

Third, more online orders mean more returns. That means more less-than-load shipments back to warehouses from local hubs and brick-and-mortar locations.

What Else Can the LTL Industry Do to Improve?

In addition to positioning themselves to respond to the logistical challenges created by the popularity of e-commerce, smart LTL freighters are also exploring other ways to fill gaps in the industry, including:

  • Offering more options for expedited delivery
  • Investing in new technology to improve their ability to track shipments and analyze data so that they can operate with more efficiency and transparency
  • Experimenting with simplified pricing systems, including dimensional weight systems that can reduce LTL freight costs
  • Offering white-glove services - either in-house or via a third-party - for final-mile delivery of items like home appliances that may require assembly

E-commerce isn’t going away, and as long as it continues to innovate and adapt to the demands of consumers and businesses, the LTL industry will continue to play a large role moving forward.

Reach out to Koho to learn more about how LTL can be an ideal e-commerce solution and see how we’re prepared to support e-commerce freight.

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