LTL is arguably the leading performance sector in trucking. But understanding the LTL market doesn’t come easy and SMC³’s educational courses are working to fill the LTL knowledge gap.
Less-than-truckload (LTL) shipping is booming, even more so than its truckload competitor (TL). And the LTL sector has become the bellwether for the trucking industry as a whole.
“There’s a huge shortage of people,” said Karl Manrodt, logistics professor at Georgia College.
The LTL industry is attracting a wide array of hopefuls, with jobs aplenty and stories about logistics now commonplace. But many, if not most, know little about the nuts and bolts of the industry they are finding work in.
SMC³: Filling the Knowledge Gap
“A lot of people are entering especially the LTL space without really knowing a lot about LTL,” said Manrodt. “They’re thinking about going into transportation. They’ve heard about the buzzwords, supply chain, and so on. They’re now more keenly interested in it given the pandemic. But there is a big gap in the knowledge base.”
That gap between knowhow and expectations has led the LTL data and solutions provider SMC³ to initiate an online courses and certification regime focused on LTL. Manrodt developed the curriculum.
In the five years since it began, some 3,000 individuals have gone through the coursework. Five courses are now offered, all aimed specifically at the world of LTLs: Fundamentals, operations, freight pricing, laws and regulations and business analytics. Each course includes eight hours of interactive instruction and costs $495.
“There’s a wide spectrum of people that have come in to take the courses and go through the certification program,” said Joe Tillman, manager education programs at SMC³. Tillman teaches some of the courses and helped develop them while at the Logistics Training Center.
Tillman cited pricing as a course that illustrates the demand for process knowledge throughout the LTL chain. Lack of understanding of the intricacies of National Motor Freight Classification (NMFC) standards can lead to shipper-carrier misunderstandings, bad feelings or even revenue loss.
The course is very interactive, Tillman said. “We walk through different formulas and calculations that are necessary in order to price a shipment and understand what goes into pricing a shipment,” said Tillman. “We look up the NMFC and we walk through all those processes, such as how you calculate a hundred weight. There are a number of other different things to look at with dimensional pricing.”
Classification at the Heart of LTL
Participants in this kind of technical work have demonstrated surprising enthusiasm.
“You would think most people would fall asleep during classification,” continued Manrodt. “We had the most interaction in the hybrid series.”
Why did it strike such a positive chord? “That’s at the heart of LTL,” explained Manrodt. “It’s so much different than truckload because classification drives everything [in LTL pricing]. Really understanding how it operates and how it works is definitely needed.”
Both Tillman and Manrodt stressed, this effort especially resonates with those new to the industry, so much so that there’s a clamor for something even more basic. “We get this question a lot: ‘Do you have a fundamentals course or fundamentals of transportation or principles of transportation?’” said Manrodt. “It’s one of those courses that are really missing even from a lot of university programs that I’ve seen or is not addressed as an individual course but encapsulated as part of another course.”
LTL: Trucking Industry Bellwether
The increased interest mirrors the growth in LTL itself. Although market size estimates are all over the place, according to the research firm IBIS, LTL shipping in the US totaled $103 billion in 2022, with a projected 1.3% increase this year. From 2018 until 2023, LTL annual growth averaged 4%, IBIS estimated.
According to IBIS, truckload shipping last year totaled $270 billion, or about 1.6 times the LTL market. However, in terms of freight rates, truckload rates saw a softening during the second half of last year, while LTL rates held steady and saw a slight gain.
Tillman and Manrodt cite e-commerce as one big driver of LTL growth.
“With the pandemic and the buying habits of most Americans today, they are going to online and they’re making a purchase for big and bulky items like the 200-bottle capacity wine fridge, or the couch from Wayfair or some other type of big and bulky item that they need to have delivered to their house,” explained Tillman. “LTL carriers are handling those deliveries because FedEx and UPS just aren’t capable of picking up a package that weighs more than 150 pounds. So, this is an opportunity, and this is also where a lot of growth is happening.”
Tillman cited Statista, which estimated that furniture and hardware as a product category has a compound annual growth rate from 2017-to-2023 of 11.5%, while household appliances during the same period has been 6.6%. “Both fit within the ability for LTL carriers to do more residential deliveries,” Tillman said.
While LTL business may be expanding, a perception lingers that this segment of logistics lacks the necessary experience and skills set. “I’ve done another study looking at how industries are perceived and professionalism in truckload was rated higher than the professionalism in LTL,” said Manrodt. “But I think we can close that skill gap by providing additional information, education on how they can approach and how they can change and how they can help educate their clients.”
