FTL, LTL, FCL or LCL
Which mode of transport is best for which situation, and how to make your supply chain as efficient as possible.
Today, shipping costs and transit times are often the deciding factors in competitiveness. Depending on shipment size, route, or specific requirements, there are various shipping methods to choose from: the most common are FTL, LTL, FCL, and LCL. But what exactly do these abbreviations mean, and which shipping method is best suited for which need? How can shipments be consolidated into efficient milk runs? We discuss the respective pros and cons—and show how our digital solution can help you find the right shipping rate.
Road transport or ocean freight: What do FTL, LTL, FCL, and LCL mean?
The abbreviations FTL, LTL, FCL, and LCL come from English and stand for Full Truck Load, Less Than Truck Load, Full Container Load, and Less Than Container Load, respectively. In other words, these terms refer to full truckload, less-than-truckload, full container load, and less-than-container load. While FTL and LTL refer to road freight transport, FCL and LCL pertain to container transport, often via ocean freight.
- FTL – Full Truck Load, full truckload
- LTL – Less Than Truck Load, less-than-truckload
- FCL – Full Container Load, full container load
- LCL – Less Than Container Load, less-than-container load
FTL and LTL shipments – the mainstays of road transport
In a full truckload shipment, the entire truck bed is used for a single shipment. In other words, it is a full load. For example: An automotive supplier ships 24 special pallets loaded with car seats directly from its plant in the Czech Republic to an assembly plant in Germany. Since the cargo volume fills the entire truck, an FTL shipment is worthwhile. This is delivered exclusively and without transshipment directly to the Original Equipment Manufacturer (OEM).
In the case of LTL—or Less Than Truck Load—shipments, on the other hand, these are partial truck loads. The shipment does not fill the entire truck’s capacity; instead, it occupies only a portion of the truck. For this reason, freight companies typically combine partial loads from different customer orders to make the best possible use of available cargo space. For example: A smaller supplier in Italy ships only four containers of wiring harnesses to Germany. Since they do not fill an entire truck, the cargo units are consolidated by a freight forwarder and transported, for example, together with other automotive parts. Partial loads require particularly careful planning on the part of the transport company, especially regarding the optimal route for delivery to different recipients, delivery time windows, and the required cargo space per order, so that shipments remain efficient and cost-effective.
FCL and LCL shipments for international trade
Full Container Load (FCL) shipments are full container loads that typically transport goods via ocean freight, meaning they are used for international shipments. In this case, a single container carries a single shipment exclusively and is delivered to the recipient unopened. To ensure secure delivery, the containers are usually sealed: only the recipient is permitted to open and unload the container. Similar to full truckloads, FCL shipments are therefore particularly suitable for large shipments that ideally fill the entire container—either by weight or by volume. An FCL shipment by ship is organized, for example, when an OEM wants to import a full container load of engine blocks from Asia.
In Less Than Container Load (LCL) shipments, similar to truck partial loads, multiple shipments from different shippers are consolidated into a single container. For example, if a German supplier imports a few boxes of electronic components from South Korea, these are combined with other automotive goods in the container as an LCL shipment and shipped together. LCL shipments are therefore ideal for small loads, as the shippers pay only for the volume or weight their goods occupy in the container.
An overview of the rates:
| Mode of transport | Suitable for | Advantages | Disadvantages |
|---|---|---|---|
| FTL | Large, time-sensitive, or fragile shipments by road | Direct, fast, short wait times, and minimal risk of damage | Pay for the entire truck, even if it isn’t fully loaded |
| LTL | Small or medium-sized shipments by road | Cost-sharing with other broadcasters, flexible | More stops along the way, longer delivery time |
| FCL | Large container shipments, sensitive or high-value goods, sea and land | Fast and secure, no transshipment, low risk of damage during transport and theft thanks to container seals, simple documentation and customs clearance | Pay the full container rate, even if the container isn’t fully loaded |
| LCL | Small Shipments, Sea & Land | Pay only for the space you use; available capacity is utilized to the fullest extent possible; transportation routes become more cost-effective and sustainable | Slower, more time-consuming customs clearance for each partial shipment; higher risk of damage or loss |
Transportation tailored to customer needs using milk runs
Transportation is particularly efficient when it can be consolidated into so-called milk runs. The logistics concept is named after the traditional milk deliverymen in the U.S. and England, who would only leave a full milk bottle at the door if they could take an empty bottle with them in return. Applied to logistics, this means making on-demand deliveries while simultaneously collecting empty containers or other goods needed for production and transporting them onward. In this process, a vehicle visits multiple suppliers or customers—following a fixed route and at defined times. This allows supply chains as well as production and assembly lines to be linked in such a way that an automatic supply cycle is created through the material flow. This not only reduces empty runs but also lowers transportation costs. Milkruns are therefore particularly suitable for areas with continuous material requirements, such as in just-in-time production in the automotive industry. Furthermore, the optimized transport routes are more sustainable and automatically integrate waste disposal logistics.
However, manual planning based on the milk run principle is very complex: it requires stable, precisely timed processes and a high degree of coordination among all parties involved. Furthermore, the number and size of the goods to be transported must be fixed, and constant demand must be guaranteed. Digital solutions that automatically handle this coordination are therefore ideal for implementing the milk run concept.
Find the best freight rate using digital solutions
Whether FTL, LTL, FCL, or LCL—the choice is often not as straightforward as it seems at first glance. This is where digital tools come in: software solutions such as transport management systems help companies automatically find the right shipping rate. To do this, order specifics such as weight, volume, transit time, destination, and mode of transport are compared with stored rate data and carrier contracts. The software then suggests the optimal freight rate. This eliminates manual comparison processes and research work: comparing different carrier quotes, checking rate lists, or recalculating individual surcharges is no longer necessary. The reduced time required saves on working hours and personnel costs, while transportation costs decrease due to the automatic selection of the appropriate rate. At the same time, processes become more transparent, and automated calculations reduce the risk of input or estimation errors.
Freight Rate Optimization Using the S2data Platform
The S2data Platform optimizes the entire transportation process, analyzes networks at both the strategic and tactical levels, evaluates routes—including freight rates—and replans them. Our algorithm uses production, warehouse, and transport data as a basis and automatically selects the optimal mode of transport—whether FTL, LTL, FCL, LCL, cross-dock, or regional freight forwarding—as well as the most cost-efficient carrier. If necessary, it consolidates FTL and LTL shipments into efficient milk runs and also enables intelligent inbound and outbound matching: The software ensures that full-load transports and the return transport of empty containers are seamlessly coordinated, thereby minimizing empty runs. Through forward-looking planning and dynamic capacity utilization calculations, significantly fewer truck orders can be realized while simultaneously increasing capacity utilization, resulting in a substantial reduction in transportation costs.
Flexible and holistic network optimization is crucial, particularly in the automotive industry, where production volumes fluctuate sharply due to new model launches or discontinued series, but above all due to sales issues and the transition to e-mobility. The S2data Platform continuously adapts the network to changing conditions, calculates the best rates for the coming months, and combines individual routes into efficient milk runs. Overall, it automatically finds the transport rate a company needs at any given time—whether FTL, LTL, FCL, or LCL.
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Sources:
https://www.lis.eu/lexikon/ftl/
https://www.lis.eu/lexikon/ltl/
https://www.lis.eu/lexikon/fcl/https://www.lis.eu/lexikon/lcl/
https://refa.de/service/refa-lexikon/milkrun-milkrun-konzept