Freight shipping allows warehouses to move large orders by consolidating them into truckloads, container shipments, or air cargo.
Studies show 88% of consumers are willing to pay for same-day delivery while 44% of customers are only willing to wait for two days. To meet these demands, 3PLs, or third-party logistics providers, use freight shipping strategies. Done correctly, freight shipping can reduce per-unit costs and ensure on-time deliveries.
In this article, we’ll discuss everything you need to know about freight shipping.
What Does Freight Shipping Mean?
Freight shipping is the process of transporting large shipments that exceed standard parcel size or weight limits. It involves moving goods via trucks, trailers, airplanes, ships, or trains—essentially any shipment too big for regular parcel services like UPS or FedEx.
For example, when a 3PL needs to ship a client’s full truckload of products from their warehouse to a retail distribution center, they use freight shipping services rather than individual parcel shipments. The 3PL determines the right container or trailer size and selects the most cost-effective transportation mode—whether by truck, rail, ocean, or air freight—to get the goods to their destination.
Once they arrive, logistics companies like UPS or DHL unload the shipments and handle final-mile delivery to ensure each package reaches the right store.
How Does Freight Shipping Work?
Here’s a step-by-step breakdown of how freight shipping works:
- Planning and Preparation: The 3PL receives orders from multiple clients and consolidates them into larger shipments to cut transportation costs.
- Choosing Best Freight Mode: The warehouse chooses the best freight mode, including truck, rail, air, or ocean freight, based on distance, cost, and urgency.
- Booking and Scheduling: The 3PL negotiates rates with freight carriers and selects the best one based on pricing, speed, and reliability. Once agreed, they book the shipment and schedule pickup and delivery dates.
- Documentation and Compliance: They prepare key documents like bills of lading, invoices, and permits to clear customs and meet legal requirements.
- Moving the Freight: The carrier picks up the goods and transports them to the next stop—whether it’s a port, distribution hub, or another warehouse.
- Clear Customs (If Needed): For international shipments, the 3PL submits documents and pays duties or taxes to get approval for entry.
- Deliver the Goods: Once the freight reaches its final destination, the recipient confirms the delivery.
Types of Freight Shipping
The following are the freight shipping modes you should know:
Less Than Truckload (LTL)
LTL shipping consolidates multiple small shipments into a single truckload. It’s a cost-effective option but may have longer transit times due to multiple stops.
Best for: 3PLs, e-commerce, retail, and manufacturers with small products.
Full Truckload (FTL)
FTL shipping is used when a shipment fills a whole truck. Goods move directly from a 3PL warehouse to the destination without multiple stops or transfers. FTL might provide better pricing per unit when the full truck is utilized.
In 2023, the total market value of FTL accounted for $408.7 billion, more than LTL shipping (~$64 billion), likely because it’s used for larger, bulkier shipments that don’t need to share truck space.
Best for: Large manufacturers and industries with bulky shipments and long-distance transportation.
Ocean Freight
A surprising 90% of global trade is shipped by sea. In ocean freight, goods are transported via a cargo ship across large bodies of water. These ships carry large quantities of bulk products, such as consumer goods, industrial machinery, and raw materials.
Best for: Import/export industries, e-commerce, and 3PLs that don’t require immediate delivery.
Air Freight
Air freight is the fastest shipping method to deliver goods quickly across countries. But it’s more costly, making it suitable only for goods where speed is critical.
Best for: E-commerce, 3PLs, retailers, and other businesses that have high-value or time-sensitive goods.
Rail Freight
Rail freight is used for long-distance transportation of bulk goods, often combined with truck shipping for final delivery. It is responsible for moving about 40% of all freight in the U.S. by tonnage. It has a lower carbon footprint and is cost-effective for large shipments over land. But requires a rail infrastructure and is slower than air or road transport.
Best for: Long-distance bulk shipping, such as raw materials and heavy goods, across large land areas.
Intermodal Freight
Intermodal combines multiple modes of transport, such as rail, truck, ship, or air, to move goods from one point to another. The cargo is usually packed into intermodal containers for easy transfer between different transport modes without unloading the goods.
It mainly uses the strengths of each mode, e.g., rail for long-distance travel and trucks for last-mile delivery to optimize costs and delivery times.
Best for: Global trade, manufacturing, and e-commerce 3PLs with high-volume shipments.
Private or Dedicated
Private or Dedicated Freight is when companies use their own or exclusively contract vehicles (trucks or trailers) to deliver goods to customers, rather than relying on third-party carriers.
In 2023, private or dedicated freight accounted for $459 billion. It’s a preferred option because it offers businesses more control over delivery schedules, routes, and service levels, but it tends to be more expensive, as companies must purchase or lease trucks or sign contracts with dedicated service providers.
Best for: Businesses that require consistent, high-frequency shipments.
Expedited
In expedited freight, shipments are prioritized over standard ones, ensuring faster transit times and minimal delays.
Best for: e-commerce, pharmaceutical, and spare parts automotive businesses.
Benefits of Freight Shipping
Here are some benefits of freight shipping:
Cost Saving
Freight shipping, especially for bulk or large shipments, is often more affordable than parcel shipping. You can consolidate shipments into larger loads to reduce cost per unit, leading to significant savings over time.
Scalability
Freight shipping allows you to handle large order volumes and diverse inventories, and meet client’s high shipping demands. You can scale your operations and support clients with logistics needs.
Global Reach
Fright shipping allows you to offer international shipping solutions and connect your clients with global markets. Whether through air, sea, or rail freight, you can manage cross-border shipments, expanding their service offerings to clients in different regions.
Flexibility in Shipping Options
Many e-commerce businesses prefer 3PLs that offer different shipping options to help them grow. Freight shipping gives you the flexibility to transport goods by truck, rail, ocean, or air, allowing you to pick the most cost-effective option for each shipment.
Improved Delivery Speed (With Expedited Services)
You can use expedited freight shipping services to meet tight deadlines. For time-sensitive deliveries, air freight or dedicated truck services help ensure faster deliveries, improving customer satisfaction for clients.
Better Control and Tracking
With advanced warehouse management systems, you can gain real-time tracking and visibility over shipments. This gives you more control over delivery timelines and ensures accurate reporting.
For example, Da Vinci’s WMS can provide real-time inventory status through barcode scanning, forecast demands based on warehouse data and order history, and redirect incoming shipments directly to outbound trucks (cross-docking) without storing them.
Environmental Benefits
According to the United States Environmental Protection Agency, intermodal transport can reduce greenhouse gas (GHG) emissions by up to 65% compared to truck-only transport for shipments over 1,000 miles. Freight shipping allows you to help your clients meet environmental compliance laws, giving you a competitive advantage.
Optimized Supply Chain
Freight shipping helps you improve your clients’ supply chains by automating the flow of goods, reducing lead times, and improving inventory management.
You can optimize supply chains using advanced WMS features to:
- Track real-time inventory levels
- Improve storage space through warehouse slotting (organizing inventory) and putaway processes (how goods are unloaded and stored) for accuracy.
- Optimize order fulfillment processes by improving picking accuracy and smart packaging solutions.
- Coordinate transportation schedules by analyzing demand patterns and data analytics.
3 Key Challenges of Freight Shipping (And How to Overcome Them)
The University of Kansas business analysts Amin Abbasi-Pooya and Micheal Lash divide freight management problems into three categories: order management, vehicle routing, and vehicle packing.
Order Management
Order management includes tracking inventory levels, processing orders in real-time, and coordinating between suppliers, warehouses, and customers.
In freight shipping, poor order management can lead to stockouts, delays, and mismatches between available inventory and customer demand, increasing the likelihood of shipping errors.
Here’s how you can overcome this challenge:
- Use cloud-based WMS like Da Vinci to track inventory levels in real time and optimize storage utilization.
- You can send incoming shipments directly to outbound trucks (cross-docking) to reduce the order fulfillment process.
- Apply suitable order-picking methods like pick by priority or item batches for better accuracy.
Vehicle Packing
Vehicle packing involves loading freight into vehicles in a way that maximizes available space while ensuring the safety of the goods.
You need to pack shipments more smartly so freight moves with the least number of trips and damage risks.
Here’s how you can overcome packaging challenges:
- Use smart packing technologies like Da Vinci’s WMS that provide algorithm-optimized packing solutions based on an item’s size, dimensions, and weight.
- Train your employees on smart packaging.
- Use packing materials like pallets, stretch film, and edge protectors to secure and stabilize loads, especially when multiple items are stacked on top of each other.
Vehicle Routing
Vehicle routing determines how freight moves across trucks, trains, ships, and air transport.
3PLs often struggle with planning routes that reduce fuel costs, avoid delays, and keep shipments moving. Traffic, weather, and port congestion can throw off schedules, while cross-border shipments may get stuck due to customs regulations and compliance.
How to overcome this:
- Advanced routing algorithms, real-time tracking, and predictive models can help you make data-driven decisions on the best routes to prevent delays or extra costs.
Optimize Freight Shipping with WMS
“Freight transport efficiency has become a critical factor in e-commerce and manufacturing. Companies are focusing on optimizing supply chain routes, reducing lead times, and leveraging smart warehouse management systems to improve overall logistics performance,” says Markus Hesse, professor of Urban Studies at the Free University of Berlin, in Germany
But managing freight shipping requires more than just transportation. You need smarter solutions for real-time inventory tracking, accurate order fulfillment, and loading optimization to meet growing customer demands.
Da Vinci’s warehouse management system (WMS) can help 3PLs solve these issues by automating workflows:
- Advanced Wave Picking Methods: Our WMS uses wave-picking strategies to group orders, minimizing travel time within the warehouse and boosting picker accuracy.
- Directed Putaway: The WMS automates inventory management by optimizing incoming inventory in optimal storage locations to save space and easy retrieval.
- Cartonization: Our WMS features an intelligent auto-packing system that determines the best way to pack items, reducing space usage and shipping costs.
- Cart-Picking: It uses smart algorithms to group and assign multiple orders that workers can pick in one go.
- Cross Docking: The WMS matches incoming shipments to outbound transportation for faster delivery.
Learn more on how you can optimize your 3PL warehouse operations with Da Vinci’s WMS. Contact our experts for a free demo today.
FAQs
How much does freight shipping cost?
Freight shipping costs depend on factors like shipment weight, dimensions, origin, destination, and chosen transport mode (air, sea, or land).
What are over-the-road (OTR) freight shipping rates?
Over-the-road (OTR) freight shipping rates are the cost of transporting goods by truck over long distances, usually across states or regions. These rates vary based on factors like fuel prices, truck availability, shipment weight, and delivery speed.
What factors affect freight shipping rates?
Freight rates depend on distance, shipment weight and volume, freight classification, transport mode, fuel costs, delivery speed, and customs duties for international shipments. Longer routes, heavier loads, expedited services, and specialized handling increase costs, while ocean or rail transport is more budget-friendly for long hauls.
What is flat-rate freight shipping?
Flat-rate freight shipping is a pricing model where shippers pay a fixed rate based on package size, regardless of weight (up to a specified limit) or shipping distance.
How long does freight shipping take?
Freight shipping transit times vary based on several factors, including the mode of transportation, distance, and specific routes. Air freight takes the shortest transit times (1-7 days) while ocean freight has the longest transit times (30-60 days).