What exactly is FTL? – and other Logistics Jargon Decoded

Logistics Jargon Decoded

A truckload is one of the key segmentations in the freight transport industry, and goods to be transported are categorised as ‘FTL’ and ‘LTL’. But what exactly does that mean?

Very simply put, FTL means a full truckload, while LTL means less than a truckload. But it isn’t as straightforward as that. Less than a truckload does not specify a particular quantity, although it is usually lesser than 5 tonnes. And FTL does not necessarily mean that the goods to be transported would occupy an entire truckload. Let us dig a little deeper.

Usually, goods that weigh 50kg or more are usually best serviced by a logistics and transportation company, rather than a courier and parcels company, as it is a more cost-effective option. On an average, a heavy commercial vehicle transports upwards of 15 tonnes. So, any cargo between 50kg and 5,000kg (5 tonnes) is usually categorised as LTL.

In LTL, goods from different customers are transported together. This makes commercial sense as each customer only pays for the load they need transported. But this type of transport usually takes a lot more time, because trucks will not depart unless fully loaded, and logistics companies will want to club consignments headed for the same, or nearby destinations, together. LTL goods may also be required to be moved from one vehicle to another between source and destination. Therefore, LTL is not the preferred mode of transport when it comes to time-sensitive delivery and the transport of fragile materials.

This is where FTL comes in. Although it stands for a full truckload, the real-world interpretation is essentially that a whole truck is dedicated to the transport of a single consignment, even if it does not occupy the entire carrying capacity of the vehicle. Naturally, FTL is much quicker than LTL, and, as the goods remain untouched between source and destination, it is also better suited to transport fragile goods.

LTL is estimated to be less than 1% of the total freight market in India. In the West, too, LTL occupies a very small share of the pie, and FTL accounts for more than 80% of the market share in the US. With the Indian logistics market expected to grow at a CAGR of 12.17% and road transport accounting for 60% of it, understanding FTL and its intricacies is paramount.

Here’s an explanation of some jargon associated with FTL:

  1. ODC: This stands for over dimensional cargo. Quite simply, any cargo that protrudes outside the loading deck of a transport vehicle constitutes ODC. The Indian government has specified these dimensions as follows: a height no more than 3.8m from the surface, a width of 2.6m and a length of 12m for rigid trucks and 16m for articulated trucks. ODC attracts an additional surcharge and is therefore a significant factor in vehicle selection.
  2. Local loads: Goods that need to be transported within a radius of 50-100km are called local loads. These are usually ferried using trucks that are permitted to enter city limits.
  3. Reverse Logistics: While logistics refers to the management of goods to their destination, there are a number of instances when goods need to be transported back from their destination. When this is an unplanned activity (such as in cases of rejected, damaged, or over-supplied goods), it is referred to as reverse logistics. How well a transport company manages reverse logistics is often the hallmark of efficiency of operations.
  4. Milk Run: Whether it is large conglomerates like Amul, or micro-operations in a rural set-up, milk collection from dairy farmers has always entailed collection from a number of places before being transported to a centralised location. Similarly, when goods in small quantities are collected by a single truck from a number of loading points and then transported to a single destination, it is called a Milk Run.
  5. Multiple Delivery: FTL refers to an entire truckload dedicated to a single customer, and is necessarily collected from a single location. But, at times, part of the FTL cargo needs to be delivered to various points en route to the final destination. This is referred to as Multiple Delivery.
Nitin O Mahipal - MD of Mega group

Nitin O Mahipal - MD of Mega group

Hi. I am Nitin O Mahipal the Managing Director of Mega Group that offers Logistics and Relocation services across India. After my Masters in the UK, I reluctantly joined Mega and scaled up the logistics operations amidst industry challenges. I look forward to your views on the blog. Thank you.