Managing Logistical Challenges Part 2: Understanding 3PLs, LTLs, and FTLs
Welcome to Part 2 of this blog series on managing logistical challenges. In Part 1, we discussed how e-commerce and consumer packaged goods (CPGs) businesses can manage the rising cost of materials. Today, I’ll be focusing on third-party logistics companies (3PLs), full truckloads (FTLs), and less than truckloads (LTLs).
These three-letter acronyms are majorly important for CPG and e-commerce businesses. The COVID-19 pandemic has caused tons of challenges – from shipping delays and increased lead times to freight driver staffing shortages – and put logistics for e-commerce at the top of everyone’s priority list.
Coenterprise found that 88% of surveyed companies have experienced shipping delays, and 70% have been dealing with inventory shortages. Another 20% said they spend 20 to 40 hours per week dealing with customer questions regarding shipping issues.
That’s a lot of turmoil! But customers appreciate transparency about any supply chain issues or delivery challenges you’re experiencing – and are more likely to forgive extended shipping times when they understand the reasons behind them.
Obviously, shipping and logistics are vital for small e-commerce and CPG businesses. But it can be overwhelming. Knowing the best route to take, and what shipping options are available...it’s a lot.
Maybe your company’s been scaling, or you have increased customer needs and are looking for new solutions to help meet your fulfillment demands. No matter what you’re dealing with, hiring an experienced shipping company lets you focus on other priorities in your business and gives you some of your valuable personal time back.
Keep reading to learn more about your shipping options, including third-party logistics companies, the benefits of FTL vs. LTL shipping, and how to make the right choice for your e-commerce or CPG business.
What is FTL vs. LTL Shipping?
FTL Shipping
FTL, or full truckload freight, is a type of shipping commonly used for large shipments. Here’s how it works: Your company hires the entire load just for your products, whether or not you need all the space. With FTL shipping, you reserve the truck’s total capacity, so you don’t have to worry about your goods changing hands or sharing space with another company’s products. FTL shipping is a great way to minimize any damage that might occur from over-handling.
Typically, a full loaded truck is faster than a less than truckload shipment because the route is direct and much less complicated. This is an excellent option if you’re shipping big wholesale orders, perishable goods, or expensive products that require fast transportation or minimal handling.
The biggest drawback to FTL shipping is the cost, especially if you can’t fill it up. To figure out if this shipping method makes sense for you financially and environmentally, always weigh the cost against the need for speedy delivery and minimal handling. If you have a lower volume of goods to move, a less than truck load shipment may be a better option.
LTL Shipping
In LTL (or less than truckload) shipping, multiple companies share a semi-truck trailer. In other words, freight shipped LTL means several shipments from multiple companies are packed on one truck so your products don’t get an exclusive trailer anymore. Shipping LTL lets e-commerce companies pay only for the space they’re occupying, which makes shipping less expensive and more environmentally conscious.
While this sounds great, there is a disadvantage: Shipments are categorized and loaded strategically according to the delivery route, so your deliveries could take longer.
However, if your products are shipped from near delivery destinations, LTL nearby shipping freight is delivered by lighter and shorter trucks, which can actually speed up the delivery time.
What Are Third-Party Logistics Companies (3PLs)?
Third-party logistics companies (3PLs) help you fulfill and deliver your products via multiple transportation logistics services, including FTL and LTL. 3PLs provide transportation, shipping, warehousing, and packing, which helps small e-commerce and CPG businesses streamline processes. An added benefit is that a 3PL typically offers customers a price quote from all major carriers rather than just one or two.
Using 3PLs for E-Commerce Order Fulfillment
I get it – understanding all the shipping logistics for e-commerce can be overwhelming! But, I’m here to make it simple.
Personally, I love ShipStation and Shippo. Here’s why.
ShipStation and Shippo
With ShipStation, customers are matched with different fulfillment providers based on specific needs. The vendors in ShipStation Fulfillment Provider Programs specialize in just about everything – verticals, geographical coverage, and product niches, like children’s products, monthly subscription boxes, and temperature-controlled options.
With ShipStation, status checks are easy. With just a click or two, you and your customers can get more details on an order and its delivery status. Even better, ShipStation and its fulfillment providers are aware of and sensitive to the pricing needs of small e-commerce businesses, so you could save money on shipping.
With Shippo, tracking and logistics for e-commerce are convenient and easy because they house your preferred carriers, third-party logistics companies, and warehouse management solutions all under their inclusive digital umbrella. They make shipping and other e-commerce logistics super easy.
Adding Shipping Insurance for Lost Packages
No matter the shipping route or carrier, it’s always a good idea to get insurance – it protects your company from damaged, lost, or stolen packages (which are almost inevitable!).
Let’s say a customer checks their tracking number, Shippo tracking information, or ShipStation status, and they see that a delivery should have been made but never was. If an insured package gets lost, your e-commerce business is reimbursed the declared value of the items and you can give your customer a refund. Even if your business does casual shipping and you’re located near delivery hubs, shipping insurance is a worthwhile (and small) investment that protects you and your business.
There are three types of shipping insurance:
Carrier insurance: This is provided by the shipping company and can be included as part of the original delivery quote or as an extra charge.
Third-party insurance: The shipper assumes full responsibility and covers refunds and replacements. One pro is reduced claim processing time, but a con is that out-of-pocket expenses can quickly add up.
Self-insurance: This type provides the most extensive protection for lower rates and covers your parcels regardless of the carrier.
Just like with shipping methods, deciding which insurance works best for you depends on your unique needs.
Managing Logistical Challenges with Virtual Sidekic
As a small e-commerce or CPG business owner, you’re probably feeling a bit overwhelmed by the rising cost of materials, shipping, and logistics. Rightfully so! But don’t worry – as your Virtual Sidekic I can alleviate some of that stress by streamlining processes and helping you take control of your business.
I’m an organizational and operational expert specializing in D2C businesses. I can help you figure out third-party logistics companies, set up systems that follow appointment and delivery guidelines so you avoid additional processing fees and labor charges, get shipping insurance, and so much more.
Let’s be real: You probably didn’t go into business for yourself to work 24 hours a day, 7 days a week. If your dream was more about running your business from anywhere (instead of your business running you!), hire me as your Virtual Sidkic – you’ll know your business is working for you while you’re finally enjoying that much-deserved dream vacation and sipping Mai Tais on the beach.