Global FTL and LTL Shipping Services Market, by Service Type (Less-than Truckload (LTL) Services and Full Truck Load (FTL) Services), by Truck Type, (Dry Van Truck (Non-perishable Food & Beverages, Clothing Items Plastic & Building Products), Flatbed Truck/Heavy Loads, and Refrigerated Truck (Chilled Fruits & Vegetables and Seafood)), by Shippers Type, (Multiple Shipper and Single Shipper), by Application Type, (Industrial & Manufacturing, Energy & Mining, Food & Beverages, Oil & Gas, Pharmaceuticals & Healthcare, and Others), and by Region (North America, Europe, Asia Pacific, Latin America and Middle East and Africa), is expected to be valued at US$ 19.91 billion by 2028, exhibiting a CAGR of 4.3% during the forecast period (2021 - 2028), as highlighted in a report published by Coherent Market Insights.
Less than truckload freight shipping, also known as LTL, is a method of transporting small amounts of freight. When freight does not necessitate the use of a full trailer, LTL it is one of the primary options. Businesses use LTL service for smaller shipments that require less than a full truckload. LTL is commonly used to combine shipping of small shipments to fill up a truck. When compared to other available shipping options, LTL shipping is far more cost effective. The primary benefit of using an LTL carrier is that items can be transported for a lower cost compared to hiring an entire truck and trailer for a single shipment. Because the carrier is transporting multiple shipments from various shippers, the freight carrier merges all of the shipments into a single truck.
Global FTL and LTL Shipping Services Market - Impact of Coronavirus (Covid-19) Pandemic
The COVID-19 pandemic has impacted negatively by numerous effects on supply chain activities, hence there is a need for rapid re-engineering to meet the change in demand after the pandemic. There is a drastic change in transport system such as transportation of only essentials and no other shipments because of typical disruptions such as hurricanes, earthquakes, and particularly because of COVID-19. Transportation planning and execution are critical components of supply chain management. The supply chain focuses on domestic and international transportation opportunities, which will need a reshaping of transportation planning, carrier identification, and execution processes. Because of COVID-19, procurement and order fulfilment activities have decreased, so the customer may want to deliver less freight. Furthermore, in order to save money on FTL costs, the customer are focusing on cost-effective shipping solutions such as less-than-truckload (LTL) shipping. Both shipping services has their challenges of being affected by virus and higher freight costs. The obligation of using LTL may result in longer transit times and damages during transportation, as a result of additional touch points i.e touching the goods and shipment documents by various drivers at various hubs and transit terminals, while coerce use of FTL may result in higher freight costs.
Full Truckload (FTL) is expected to propel the market growth during the forecast period 2020-2027.
In 2019, according to the U.S. Department of Transportation, trucking industry accounted for around 80.4% of the total freight bill in the U.S. that equates to around US$ 791.7 billion in gross freight revenues. Moreover, the U.S. Department of Transportation reports that there are over 700,000 registered motor carriers in the U.S market, where 91% of freight carriers have six or fewer trucks, and 97.3% have fewer than twenty. Furthermore, there are around 17,000 freight brokers working in the industry. According to the U.S. Department of Transportation report in 2019, full truckload (FTL) transport accounts for the largest portion of the freight market. FTL shipping accounts for 46.4% of the U.S transportation market. It is followed by shipment transportation (16.4%), air freight (12%), and less-than-truckload (LTL) (11.3%). Truckload freight shipping is one of the most efficient and adaptable modes of land transportation, particularly in the U.S. When in case of security of transporting goods, FTL is the best transportation option. If the shipment is very valuable, hazardous, or fragile, it is better to transport goods through FTL. There are various technological enhancements in FTL. For instance, TIBCO Software Inc., an enterprise data company headquartered in California. ‘TIBCO FTL services offered by the company’ uses a big data and cloud platform for real time applications. One of the features of ‘TIBCO FTL’ include that a FTL services which sends six million messages per second and over 850,000 guaranteed messages per second at a single command to customers. This helps businesses to distribute data using high-speed messaging.
Key Trends and Analysis:
Influence of E-commerce: Truck drivers are exempted from the hours of service regulations (HOS), if they drive within a 100-air-mile radius of their normal work reporting location. With the rise of e-commerce, more truck drivers are relocating to locally operated positions with more flexible rules. The e-commerce boom caused by the COVID protocols was underestimated by LTL carriers. As a result, straight trucks with lift gates are being purchased by LTL carriers for smaller businesses, strip malls, and residential areas. They are also collaborating with local cartage agents and white glove carriers who specialize in commercial and residential deliveries of large items such as furniture and exercise equipment.
LTL Freight Volumes Will Remain Volatile in 2021: Transportation services such as LTL and FTL experienced an extreme unbalanced market throughout the year during the peak of COVID-19 shutdowns. However, transportation services rates re at an all-time high right now, and transport carriers are struggling to keep the rates high. Transportation services remained high at until the first quarter of 2021. If strict shutdowns are reinstated, transportation services rates may fall, if many shippers are forced to close the transportation business. . Alternatively, the transportation services market could rise again in response to increased consumer demand for transportation of goods and cargo.
Technology to Control LTL Freight Spend: Transportation automation including integration of electronic logging device, labor management, warehouse management system, transportation management system, enterprise resource planning, software as a service, electronic data interchange, and application programming interface systems, among many others, are vital to maintain LTL freight spend. Usage of technology will be the most important LTL trend in the forecast years, as more carriers and shippers turns to adopt technology to control freight costs and improve efficiency of transportation services.
To know the latest trends and insights prevalent in the Global FTL and LTL Shipping Services Market, click the link below:
Freight forwarding and shipping services have learned to adapt to new technologies over time. Technologies designed specifically for the freight industry is becoming more widely available. Implementing this technology enable freight firms to not only improves services and reputation, but also allows firms to differentiate themselves from competitors. Below are some of the technologies used by a freight company. Many operations in the freight industry can be improved with the push of a button. The ‘Push of a Button’ technology enables businesses to easily coordinate and plan shipments, allowing them to control the transportation of goods through clear, up-to-date tracking. The client can learn about their shipment's location, status, and expected delivery time. Moreover, the ‘Automatic Identification Technology’ has made possible for operations to run much more smoothly, when transporting goods from one location to another. The use of automatic technologies such as handheld scanners allows for more efficient day-to-day operations. Reports and logs can be easily printed off at the end of each day with the implementation of electronic identification technology and onboard computer systems when transporting goods. These are the technological drivers, which are expected to drive the FTL and LTL shipping services market.
Major Market Players/Competitors
Key players operating in the global FTL and LTL shipping services market include YRC Freight, XPO Logistics, Old Dominion, UPS Freight, Estes Express Lines, ABF Freight, R+L Carriers, Saia Motor Freight Line, Southeastern Freight Lines, Holland Regional, J.B. Hunt, Schneider, Swift Transportation, and Werner Enterprises.
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