[Infographic] LTL vs. Parcel Shipping: Key Differences

Posted by Benjamin Meskin on May 20, 2021 9:00:00 AM
Benjamin Meskin

For many years, LTL shipping has been the most popular option when shipping bulk quantities, heavier commodities, or oversized items. That is just one of the many shipping options available for businesses to choose from when sending out their merchandise to customers, retail stores, or warehouses. 


But recently, the more affordable parcel shipping option has become the preferred choice, when possible, mainly because it allows shippers to send out packages with many of the same benefits as LTL shipping but at a much lower cost. Check out the infographic below for a breakdown of the key differences between LTL and parcel shipping. 

Cabrella - LTL vs Parcel Shipping Infographic

 

What is LTL Shipping?

LTL shipping typically involves larger packages. These shipments can be uniquely shaped, heavy, bulky, and not something that will fit neatly inside an average size box. LTL shipments are often stacked on pallets and stored inside a warehouse until they are ready to be shipped out. 

 

Due to their size, there are fewer checkpoints involved with LTL shipments which can be a disadvantage when it comes to traceability.  

 

LTL allows various companies to pool together their goods and transport items by sharing one truck as opposed to having a dedicated truck just for one shipment, which can save the shipper time and money on each shipment.

 

LTL shipment being put on a truck

 

What is Parcel Shipping?

The primary difference between these two shipping options is the size and weight of packages allowed. Most parcel shipments are packed in small boxes with goods that weigh less than 150 pounds. They are easy to lift, transport, and deliver without any additional assistance required. 

 

Parcel shipping can be more convenient because you can schedule pickups or visit a local drop-off location to ship your items out when it is most convenient for you. Another plus associated with choosing parcel shipping is how economical it can be. If you are shipping out smaller and lightweight packages, it will cost much less to ship them using parcel shipping compared to LTL freight. 

 

While the smaller size and weight can help transport the items easier, it also leaves more room for damage, destruction, loss, and theft as there are more checkpoints involved with parcel shipments.


Having more checkpoints can be beneficial for buyers and sellers because it allows buyers to keep track of where their shipments are located at all times. However, the constant moving and handling of the packages can make it easier for them to become damaged, lost, or stolen. That is one of the main reasons why you need parcel shipping insurance.

 

Parcel shipments getting delivered

 

The Key Differences Between LTL and Parcel Shipping

How does LTL compare to parcel shipping? Here are a few of the main differences between the two:

 

Tracking and Checkpoints

LTL shipments do not require as many checkpoints as parcel packages. That can be a good thing as less handling allows for higher safety and security with a low risk of loss or damage. 

 

Fewer checkpoints also mean LTL shipments are allowed to zone skip. That means the shipments can bypass the carrier zones for parcels, allowing the shipper to avoid charges due to crossing more than one zone per trip. Overall, the fewer checkpoints a package has to endure; the safer and less expensive the process will be. 

 

Parcel packages must go through several checkpoints before reaching their final destination. While this puts these packages at a higher risk for loss or damage, it also offers the advantage of tracking updates, speed of delivery and providing peace of mind. 

 

Package shipment checkpoint

 

Loss Prevention and Risk of Damage

With parcel shipments, there is a higher chance of a package becoming lost or damaged. The risk is not as high with LTL shipments. That is because most LTL shipments are secured on pallets and placed inside a space specifically designed to prevent any damage from occurring to these larger packages. 

 

Parcel shipments are generally much smaller in size and weight. That allows them to be packed in higher volume, which can be helpful. However, it also leads to a higher risk of damage and destruction. For that reason, it is highly recommended that all parcel shipments of value are backed with reliable shipping insurance coverage. Similarly, LTL Shipments of value must also be insured. In the U.S., LTL Carriers will include limited liability coverage for their own negligence in delivery; however, each carrier provides different limits of liability tied to the weight and commodity being shipped.

 

Depending on the particular commodity and weight, shippers of LTL may need to obtain additional coverage to cover the discrepancy. Further, when having 3rd party insurance, the scope of coverage can be broader, and instead of filing a claim with the freight carrier (which can be a tedious and difficult process), a professional insurance carrier and an adjuster will adjust the claim on your behalf and then deal with the carrier directly, removing the parties involved from the process.

 

Difference in Cost 

Finally, the cost of LTL shipping versus parcel shipping is another crucial difference to consider. Because parcels can be shipped at higher volumes, the cost of shipping is much less overall. LTL packages often take up a lot of space, and that results in a much higher shipping cost. 

 

However, the difference in cost is not always a benefit for those choosing parcel shipping. That is because parcel carriers will charge extra for delivering on a Saturday or correcting errors. At the same time, LTL carriers will charge extra if the delivery location does not have a loading dock.

 

Small packages getting sent out

 

Shipping Insurance Options for LTL and Parcel Shipping

Now that you know more about the factors involved in small parcel vs. freight shipping, it is time to learn why you need multiple shipping insurance options for parcel and LTL shipments. 

 

Even the top Shipping Companies Make Mistakes

Although the three major companies, USPS, UPS, FedEx have a high success rate, it is still possible to experience delays, damage, loss, and other issues no matter which of these carriers you choose. Therefore to guarantee the protection of your shipment, it is best to look for alternate shipping insurance options.  

 

When you decide to buy shipping insurance from Cabrella, you get the added benefit of increased coverage amounts up to $150,000 per parcel, advanced integration using their shipping app, and access to critical risk management data and a carrier agnostic fully paperless online claims system.

 

Warehouse worker tracking a shipment

 

Shipping Insurance Takes the Risk out of Shipping Expensive Items

Shipping an expensive or irreplaceable item can be unnerving for both the shipper and the recipient until the item arrives safely at its destination. But with the correct shipping insurance coverage, you can ship any item with peace of mind. Shipping insurance included with USPS, for instance, is a set amount, usually around $100 for most shipments when shipping USPS Priority Express Mail and $50 for USPS Priority Mail. If the item you are shipping is damaged and worth more than that amount, you will have to pay the difference out of your pocket. You can also purchase additional insurance from the carrier directly; however, there are several drawbacks including limitations on coverage and commodity, adjustment based on the cost compared to replacement cost, premium expense, and claims process.

 

However, there are high-value shipping insurance options available that allow you to insure an item worth any amount to ensure the buyer is reimbursed fairly. 

 

With the correct type of shipping insurance, you can be assured that the buyer will receive the product they purchased intact or receive fair compensation if there are any issues with the shipment. 

 

Contact Cabrella for Details on our innovative Shipping Software

At Cabrella, we can assist you with coverage for both parcel and LTL shipments as well as FTL, Ocean Marine, and Air Freight. Our innovative shipping insurance software can help you secure the best coverage at competitive rates and print out your shipping labels within minutes. 

 

With our intuitive user interface and supportive customer service team, you can shop rates between carriers, compare your options, and get help with your essential questions instantly. This software can help you file claims easily without issues in a fully paperless environment, and you can also customize a shipping insurance plan that compliments the needs of your specific business. 


To see what the Cabrella shipping insurance software program can do for you, contact us today for more details. We look forward to assisting you and answering any questions you may have.

Tags: LTL shipping, Parcel shipping

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