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Which Is Cheaper, SPD or LTL?

Written by Joe Jordan | Jun 12, 2023 1:52:25 PM

Small Parcel Delivery or Less-Than-Truckload (LTL): Which shipping service offers the best bang for your buck? And, more importantly, which one suits your specific needs? In this article, we'll answer these questions by exploring the differences between these two shipping methods and comparing their respective costs.

What Is the Difference Between SPD and LTL Shipping?

Small Parcel Delivery (SPD) and Less Than Truckload (LTL) are two widely used package delivery services most major carriers offer. While they may use the same transportation networks, they differ in other areas, especially cost and logistics. Let's begin by detailing what exactly SPD is.

What is Small Parcel Delivery (SPD)?

Small parcel delivery is the transportation of a small package (typically 70 lbs and below) from a source address to a destination address. It involves the following steps:

  • Preparing the package - The sender packs their items securely in the appropriate packaging, including suitable protection like padding or packing peanuts. 
  • Weighing and measuring - The sender then weighs the package on a scale, recording the reading as 'actual weight.' They also measure and record the package's height, width, and length. These dimensions are used to calculate the 'dimensional weight' of the package. 
  • Finding a shipping carrier/service - Using the actual and dimensional weights, the sender can check through different carriers' rate directories to see how much it will cost to send the shipment. They can then pick the option that is within their budget and is most suited to the shipment. 
  • Pick-up/drop-off of the package - Once the shipper has chosen a service, they contact the carrier to organize pick up or drop off of the package.
  • Transportation and tracking - The carrier sorts all the packages and puts them into outbound truckloads based on their final destination. While in transit, your package is scanned, and its status is updated in your portal. Using your tracking number, you can view the shipment progress. 
  • Final sorting and delivery - Once the package reaches the destination hub or local facility, it undergoes further sorting and is prepared for the final delivery. The carrier assigns a local delivery driver responsibility for delivering the package to the recipient's address. 

What Is Less-Than-Truckload (LTL)?

Less-Than-Truckload shipping is a freight shipping service whereby shipments from multiple senders are placed onto the same truck and sent out for delivery. The main difference between LTL and SPD is that LTL is for bulky shipments, usually weighing at least 150 pounds. The shipment can be a single carton or multiple boxes combined on a pallet. 

Another freight-shipping method similar to LTL is FTL shipping or Full Truckload. With FTL, the whole truck transports a single shipper's goods.

How LTL Shipping Works

  • Shipment Inquiry and Quote - The shipper initiates the LTL shipping process by requesting quotes from various carriers to find the most cost-effective option. Carriers will generate estimates based on size, weight, pick-up location, destination, and additional services.
  • Carrier Selection - Based on the received quotes, the shipper selects a carrier that offers the service level, delivery time, and rates that best suit their requirements.
  • Freight Class Determination - The shipper then uses the carrier's guidelines to determine the freight class of their shipment. Freight class is determined by factors such as density, stowability, and ease of handling. The class determines the rate you pay and how your shipment is handled.
  • Shipment Pick-up - The carrier arranges for the pick-up of the shipment from the shipper's location.
  • Shipment consolidation - Once the carrier collects shipments from various shippers, they are transported to a local terminal, sorted, and consolidated onto one truck, maximizing space utilization and cost efficiency.
  • Transit and route Optimization - The loaded truck departs from the origin zone and starts its journey towards the destination. The carrier optimizes the route, making multiple stops along the way to drop off and pick up additional shipments. LTL also utilizes a technique known as zone-skipping, which allows quicker delivery by allowing the truck to skip zones on its way to the final destination.
  • Tracking and Visibility - The shipper and recipient can track the shipment's progress using the assigned tracking number throughout the transit.
  • Final delivery - Once the truck arrives at the destination sorting facility, the remaining shipments are sent out for final delivery. 

Differences between SPD and LTL

Criteria

Small Parcel Delivery

LTL Shipping

Application

Carriers transport individual packages or small shipments.

Multiple smaller shipments from different shippers consolidated onto one truck for transportation.

Package Size

Typically limited to smaller dimensions and weight, suitable for individual handling.

Can accommodate larger and heavier shipments that exceed the capacity of small parcel carriers. (Usually starting at 150 pounds up to 15,000 pounds)

Delivery Speed

Offers various delivery speed options, including expedited and next-day services. It can include same-day or time-specific delivery.

Transit times are longer than small parcel delivery due to multiple stops for consolidation and delivery.

Pricing Structure

Pricing is based on factors like weight, dimensions, distance, delivery speed, and additional services (e.g., signature confirmation).

Apart from weight and shipping distance, prices are based on a unique factor known as freight class.

Flexibility

SPD is suitable for individual consumers and businesses with small-scale shipping needs. Example scenarios include online shopping and e-commerce.

LTL is best for large shipments but not big enough to fill a full truckload.

Logistics

Relies on preplanned routes and a time-tested network of distribution centers and local carriers for efficient delivery. 

Requires more planning since goods are bulky and more time-consuming to receive, process,  load, and unload. Also requires strategic route planning to maximize efficiency and minimize transit time.

 

SPD Costs Vs. LTL Costs

UPS SPD Cost Vs. LTL Rates

UPS, one of the biggest and most ubiquitous courier companies in the world, has multiple small parcel delivery services, from standard ground shipping to same-day delivery services. The cost of using these services depends on various factors, including delivery speed, shipping distance, and type of package, among other factors. Below is a table with rates based on the weight range of a package and UPS service level. 

UPS Small Parcel Delivery Rates

 

UPS Service
   

Weight

UPS Next Day Air Early

UPS Next Day Air

UPS Next Day Air Saver

UPS 2nd Day Air A.M.

UPS 2nd Day Air

UPS 3-Day Select

UPS Ground

1–10 pounds

$65.00–$241.38

$35.00–$220.81

$31.71–$166.88

$23.64–$125.26

$21.64–$122.21

$13.66–$81.74

$10.10–$112.33

11–20 pounds

$87.74–$336.20

$57.74–$334.89

$51.04–$244.25

$34.07–$204.68

$30.87–$185.36 

$24.10–$131.10 

$14.10–$166.06

21–30 pounds

$104.81–$407.52

$74.81–$401.18

$68.28–$323.01

$52.04–$280.59

$46.53–$259.15

$33.51–$180.11 

$16.69–$219.32

31–40 pounds

$122.69–$489.82

$92.69–$473.74

$85.35–$391.28

$68.58–$368.28 

$58.69–$335.80

$44.84–$226.57

$20.19–$265.35

41–50 pounds

$145.49–$572.75

$115.49–$553.61

$104.26–$468.37

$85.90–$435.70

$76.65–$370.88

$54.94–$269.82

$23.03–$316.11

51–60 pounds

$173.79–$698.48

$143.79–$681.86

$123.26–$571.10

$104.82–$511.04

$86.54–$440.32

$65.10–$315.87

$24.79–$366.36

61–70 pounds

$200.53–$782.36

$170.53–$768.24

$144.21–$656.79

$116.75–$597.70

$101.07–$495.98

$73.06–$374.64

$26.03–$422.73

 

Unlike small parcel delivery services, UPS does not have a rate sheet for LTL services. Instead, they have a freight shipping cost calculator which gives you an estimate based on the details of your shipment, including freight class, date of shipping, weight, and more. 

However, to give you an idea of UPS LTL costs, we will look at the rates of sending a 150 lb LTL shipment from Trenton, NJ, to increasingly further cities up to Sacramento on the West Coast. This should give you a rough idea of UPS LTL rates.  

Example: UPS Rates for sending a 150 lb package via LTL 

Source

Destination

Cost

Trenton, NJ

Harrisburg, PA

$215.82

Trenton, NJ

Columbus, OH

$215.82

Trenton, NJ

Indianapolis, IN

$215.82

Trenton, NJ

Springfield, IL

$226.19

Trenton, NJ

Jefferson City, MO

$257.23

Trenton, NJ

Topeka, KS

$362.37

Trenton, NJ

Denver, CO

$360.00

Trenton, NJ

Salt Lake City, UT

$429.91

Trenton, NJ

Carson City, NV

$507.34

Trenton, NJ

Sacramento, CA

$516.24

 

To get a custom estimate based on the unique details of your shipment, go to the UPS Freight Cost and Time Calculator. 

FedEx SPD Rates Vs. LTL Rates

FedEx Small Parcel Delivery Rates

 

FedEx Service

Weight

FedEx First Overnight

FedEx Priority Overnight

FedEx Standard Overnight

FedEx 2Day A.M.

FedEx 2Day

FedEx Express Saver

FedEx Ground and FedEx Home Delivery

1–10 pounds

$68.04–$199.53

$37.04–$168.53

$33.87–$165.22

$25.37–$127.21

$22.59–$106.40

$21.03–$91.63

$10.10–$22.40

11–20 pounds

$93.53–$280.16

$62.53–$ 249.16

$55.08–$241.82

$36.28–$ 206.09

$33.06–$176.30

$32.41–$149.10

$14.17–$36.17

21–30 pounds

$109.85–$367.87

$78.85–$ 336.87

$73.68–$319.81

$57.43–$276.22

$49.83–$243.54

$45.48–$205.05

$16.80–$51.83

31–40 pounds

$128.73–$435.45

$97.73–$404.45

$92.11–$387.40

$74.31–$ 362.84

$63.05–$312.64

$61.81–$ 259.57

$20.29–$63.95

41–50 pounds

$149.28–$510.78

$118.28–$479.78

$112.52–$462.75

$94.83–$ 438.26

$82.33–$359.69

$79.96–$308.02

$23.15–$74.72

51–60 pounds

$185.48–$613.46

$154.48–$582.46

$133.04–$565.44

$114.67–$522.93

$93.47–$424.98

$91.63–$373.06

$24.85–$81.11

61–70 pounds

$214.21–$698.31

$183.21–$667.31

$151.33–$650.28

$133.01–$602.70

$108.74–$479.00

$104.68–$436.39

$26.09–$85.57

 

To ensure a cohesive rate comparison, we have used the same example of shipping a 150 lb package from the east coast (Trenton, NJ) to further away cities. Below are the FedEx rates.

Example: FedEx Rates for sending a 150 lb package via LTL 

Source

Destination

Cost

Trenton, NJ

Harrisburg, PA

$361.68

Trenton, NJ

Columbus, OH

$435.24

Trenton, NJ

Indianapolis, IN

$462.83

Trenton, NJ

Springfield, IL

$460.09

Trenton, NJ

Jefferson City, MO

$470.36

Trenton, NJ

Topeka, KS

$514.71

Trenton, NJ

Denver, CO

$606.19

Trenton, NJ

Salt Lake City, UT

$632.77

Trenton, NJ

Carson City, NV

$680.15

Trenton, NJ

Sacramento, CA

$781.85

 

Take a look at the FedEx freight pricing document for full details on rates, pick-up and delivery costs, and surcharges.

Using the example we shared above, you can compare the UPS rates and FedEx to understand which of the two carriers offers cheaper LTL services. 

However, note that the FedEx rates above are average rates calculated from multiple estimates that FedEx provides. For example, for shipping the 150 lb package from Trenton to Topeka, FedEx gives the following rates: $564.56, $601.41, $415.86, $437.96, $623.52, and $437.96. We then took the average of these rates to get $514.71.

On the other hand, UPS gives a single estimate. This means the FedEx LTL rate you pay could be significantly higher or lower than what is listed in the table. 

How ShipSigma Can Help

ShipSigma is an industry leader in small parcel shipping, saving our customers 25.2% on average on their parcel shipping costs in less than 4 hours of their time. Let us analyze your carrier contracts to find and execute prime cost-saving opportunities. 

Get in touch with us to start saving.
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