Retailers, wholesalers, and product manufacturers might have adhered too strictly to age-old methods of managing Less-Than-Truckload (LTL) deliveries. But can this status quo hold up? Given the challenges in the $83 billion LTL market—declining volumes juxtaposed against e-commerce booms and the complexities of density-pricing—it’s evident that a new strategy is in order.
As OneRail’s Chief Revenue Officer, I’ve sensed the mounting pressures firsthand. Drawing from my many profound conversations within the industry, I passionately believe that OneRail’s multi-carrier platforms can serve as pivotal catalyst to reshape and strengthen the future of logistics and LTL.
A recent article by Brittain Ladd titled “Breaking LTL” adds context to this and came about after I had a conversation with him. Ladd, a thought leader recognized as one of LinkedIn’s Top Change Management Voices, details the untapped potential of the last mile logistics industry to transform the LTL sector. Because this sector typically handles shipments too large for regular parcel services but not substantial enough for a full trailer load, Ladd challenges CEOs of last mile delivery companies with three pressing questions:
- How do we disrupt the LTL industry?
- How do we become strategic partners to our customers with LTL freight, offering a superior and more affordable alternative to LTL?
- How do we devise a better shipping and delivery strategy for all our customer’s freight?
The Current Paradigm in LTL and Last Mile Delivery
Before exploring LTL operations in response to Ladd’s article and questions, let’s define them and last mile delivery.
LTL Shipping
LTL shipping caters to shipments too big for standard parcels that don’t fill an entire truck — in other words, mid-sized shipments. At a central terminal, logistics teams combine shipments from different businesses into one truck. Once the truck reaches its destination terminal, workers separate the shipments and deliver them to their final destinations.
Last Mile Delivery
Now, let’s shift our focus to last mile delivery. Last mile delivery is the final phase of a product’s journey from a distribution center to its ultimate destination, typically a home or business. It emphasizes personalized and timely deliveries, often directly to eagerly waiting customers, setting this stage apart. This degree of precision not only increases complexity but also drives up costs. Last mile delivery can account for up to 53% of total shipping costs. Given the rising expenses, retailers might invest an astonishing $55 billion in this crucial delivery segment by 2025.
Why Last Mile Delivery Can Disrupt LTL
The rapid evolution of e-commerce and technology is reshaping the logistics landscape. Here’s how last mile delivery could challenge traditional LTL methods:
- Consumer Expectations: With the boom in e-commerce, almost two-thirds of consumers expect deliveries to arrive within 2-3 days. Last mile services offer pinpoint delivery windows, live package tracking, and even same-day arrivals.
- Technological Advancements: From the intrigue of drones to advanced routing algorithms and Machine Learning and AI, technology is streamlining and economizing last mile deliveries.
- Flexibility: Agility is the forte of last mile delivery enterprises. They swiftly tune into shifting consumer preferences, while seasoned LTL carriers might take time to warm up to innovations.
- Localized Distribution Centers: Placing distribution hubs closer to urban centers or even shipping from stores shrinks the delivery distance, infusing speed and efficiency into the last mile.
Limitations and Antiquated Technologies Influencing Delivery Execution
As technology progresses, it exposes inefficiencies in traditional logistics. The industry’s dependence on outdated methods stunts growth and erodes customer satisfaction, underscoring the need for a fresh perspective.
Limitations of Age-Old Systems
Shippers, retailers, and distributors still base their operations on old decisions, tribal knowledge, and antiquated technology. Traditional logistics systems, often based on ingrained decisions and outdated technology, fail to meet modern-day shipping demands. The absence of real-time tracking leaves customers in the dark, unaware of their shipment’s whereabouts.
Additionally, existing routing algorithms overlook dynamic challenges like weather or traffic, causing avoidable delays. Paper-driven methods and broad delivery windows further strain user trust and patience, emphasizing the need for a tech-driven overhaul.
Old Ways of Thinking and Their Impacts
Many in logistics cling to the “If it’s not broken, don’t fix it” philosophy, prioritizing cost over innovation. This approach often overlooks the untapped potential of efficient Last Mile Delivery services, creating a gap in modern shipping solutions. That’s why I urge traditional brokers and shippers thinking within those structured lanes to rethink those old decisions.
Harnessing Untapped Potential in LTL with Last Mile Delivery
Last mile delivery companies are poised to tap into a significant opportunity within the LTL sector. Ladd and I both strongly believe in this. Modern multi-carrier platform solutions promise cost-effectiveness with enhanced flexibility and efficiency. More than just financial savings, the emphasis is elevating the customer experience.
We’ve all experienced it. The thought of conventional LTL deliveries invokes more pain over pleasure. Name one situation in your life where an LTL delivery came to your house, and you were happy with it. Whether it’s lawn furniture, a refrigerator, an appliance, or a couch, it’s often been an awful experience. So, if there’s a way to get a better customer experience, that can be a key reason to look at services like OneRail. Rethink those old decisions.
Rethinking Shipments and Traditional Models
Ladd points out that traditional LTL methods aren’t always suitable, especially for palletized shipments. By addressing this, businesses can provide faster, tailored delivery solutions. The industry should not only adapt, but also consider innovative alternatives, such as mode-shifting with services like OneRail. Recognizing these LTL mismatches can pave the way for a more aligned, customer-focused logistics industry.
Disruption of the Status Quo
Historically, the rigid confines of traditional LTL shipping have dominated logistics. But as the landscape undergoes a seismic shift, there’s a growing realization that a one-size-fits-all approach is no longer viable. There’s a palpable push to blend the breadth of LTL with the tailored precision of last mile delivery, offering a more efficient and flexible shipping methodology.
Championing Innovation
Beyond mere service evolution, there’s a demand for genuine industry innovation. Ladd’s post challenges the prevailing “race to the bottom” mindset, emphasizing a pivot toward crafting distinctive, value-added solutions. This transformation symbolizes a significant departure from mere commoditization to recognizing and leveraging the industry’s potential.
The Power of Strategic Last Mile Delivery Partnerships
The future of logistics isn’t about isolated operations but synergistic collaborations. Ladd’s post envisions last mile delivery companies working in tandem with businesses, forging strategic partnerships. These alliances promise tailored shipping solutions that redefine efficiency and highlight a new benchmark for cost-effectiveness compared to conventional LTL practices.
Enhancing Consumer Experience in LTL Deliveries
Traditional LTL methods face challenges in this era of instant deliveries and precise tracking. The industry’s future isn’t just about boosting efficiency but transforming the consumer experience.
The Modern Consumer’s LTL Conundrum
Today’s consumers, fueled by the immediacy of e-commerce, seek more than just delivery — they crave predictability, transparency and speed. Traditional LTL methods, often bogged down by cumbersome processes like structured lanes, consolidation and deconsolidation, are becoming increasingly misaligned with these heightened expectations. E-commerce orders could come from multiple locations, making it challenging to award lanes the old way – now it needs to be instantaneous. This is where there’s a growing opportunity for “last mile” deliveries to bridge this gap.
By adopting “last mile” strategies, businesses can transition from the limitations of LTL and usher in faster, more efficient deliveries directly to end consumers. Furthermore, this method can expand from delivering straight to the consumer to transporting goods from DC to DC or from Manufacturing to DC. The path forward is evident: Embrace “last mile” delivery solutions and center them around the ultimate end-user experience.
The Everyday Impact of LTL’s Shortcomings
Behind every delayed LTL delivery, there’s a consumer’s story. Consider how the following narratives underscore the pressing need for the LTL industry to become more consumer-centric. Take Jane, for instance, who eagerly awaited her online furniture order only to be delayed by a week. Or consider Alex, who, despite living near his gym equipment seller, had to wait unnecessarily due to the product’s detour via an LTL terminal. And then there’s Emily, whose apartment life was disrupted by broad LTL delivery windows, leading to missed handovers and unnecessarily having to take time off work.
Rethinking Freight Decisions
In the evolving world of e-commerce, traditional freight allocation methods are under scrutiny. The challenge is not just about optimal allocation but also efficiency, savings and sustainability.
Assessing Current LTL Allocation
Originally designed to cater to shipments that don’t occupy an entire truck, LTL’s role in e-commerce is changing. The once-clear boundaries between full truckloads and smaller shipments blur as consumer preferences shift. This fact has led to potential inefficiencies and a pressing need to revisit our freight decision-making processes. Hence, businesses must critically evaluate the criteria for freight allocation, ensuring that it aligns with modern market demands.
Opportunities in a Revamped Freight Strategy
Businesses can unlock many benefits by fine-tuning their freight decisions to resonate with today’s market needs—from significant cost savings and improved delivery timelines to heightened consumer satisfaction. Furthermore, there’s an environmental edge: An optimized freight allocation strategy reduces the number of trucks on roads, contributing to a diminished carbon footprint.
OneRail’s Vision of Modern Freight
OneRail is at the helm of the tech-driven freight future, harnessing the power of real-time data, AI insights and integrated TMS technology. By intertwining effortlessly with legacy systems used by shippers and brokers, they ensure delivery choices are both swift and spot-on. Moreover, their customer-first approach, enriched by diverse carrier partnerships, positions them as leaders in reshaping today’s freight decisions.
Answering the Pressing Questions
As mentioned in the intro, Ladd challenges last mile logistics CEOs with three questions:
- How do we disrupt the LTL industry?
- How do we become strategic partners to our customers with LTL freight, offering a superior and more affordable alternative to LTL?
- How do we devise a better shipping and delivery strategy for all our customer’s freight?
I believe it’s not merely addressing these challenges but also establishing new standards.
Disrupting the Traditional LTL Industry
OneRail isn’t merely adapting to the LTL landscape but reshaping it at its core. At the forefront of this revolution is the intricate link between last mile delivery and LTL shipping costs. As consumer expectations tilt toward personalized delivery options, associated expenses surge. But the answer lies in embracing hot shot last mile delivery and groundbreaking tech-driven transportation services — a disruptive and comprehensive delivery fulfillment solution. OneRail’s lightning-fast OmniPoint™ Platform seamlessly merges vast connectivity with cutting-edge technology, ensuring every delivery is perfectly matched and efficiently executed.
Fostering Strategic Partnerships
At OneRail, we are challenging the traditional LTL mold, wielding an extensive network of over 12 million couriers and partnerships with 600+ courier entities across major U.S. cities. With this massive footprint, the solution isn’t just adapting to the evolving LTL landscape; it’s spearheading its transformation. At the heart of our approach is a commitment to build strategic partnerships that offer superior and affordable LTL alternatives. The OmniPoint™ Platform is a beacon of adaptability, while collaborations with powerhouses like Inmar Intelligence, Trimble, and SAP inject fresh perspectives. With each partnership, OneRail delves deeper into uncharted territories, crafting solutions that do more than just respond to market needs — we anticipate them.
Crafting Consumer-Centric Delivery Strategies
OneRail is revolutionizing logistics with its consumer-focused delivery approach. The OmniPoint™ Platform ensures transparency and precision for every delivery, backed by a robust and reliable courier network. The proactive Exceptions Assist™ feature showcases foresight by anticipating potential delivery issues and empowers our customers to notify their customers when delivery times get changed proactively. With advanced last mile tracking, OneRail offers businesses and consumers a transparent view of each package’s journey. The platform integrates seamlessly with existing business systems, simplifying multi-carrier management.
At its heart, OneRail combines innovation with a personal touch, underscoring its steadfast commitment to an exceptional customer experience.
A Consumer-Centric LTL Future Awaits
The significance of disruptive innovation in reshaping old industry norms is paramount. While our unwavering dedication to innovation and consumer satisfaction could set a new standard in the LTL sector, there’s an ocean of untapped potential not to evolve with the industry but to revolutionize it by placing consumers at the forefront. The ideas presented in Ladd’s article come to life in real time through OneRail’s innovative solutions.
We welcome fresh dialogue and collaboration to usher in transformative changes. What are your thoughts on the future of the LTL industry? Feel free to contact me on LinkedIn or get a OneRail demo to discover more about this brighter, consumer-centric LTL future. We’d love to hear your thoughts.
