In Full Truckload (FTL) transport, pricing follows straightforward rules: costs are determined by distance and the hire of the entire vehicle.
In Less Than Truckload (LTL) transport, however, the cost calculation is considerably more complex. Moving smaller, non‑standard consignments often incurs a relatively high cost compared with the volume shipped. This stems from the nature of consolidation, where trailer space is shared between multiple shippers. The final rate is determined not only by actual weight but, above all, by the floor space occupied in the trailer and the stackability of the goods.
At Jasek Transport we regularly manage cargo consolidation on consolidated routes. From a supply‑chain management perspective, understanding metrics such as the Loading Metre (LDM) or chargeable weight is essential for effective transport budget optimisation.
In this article we analyse the cost structure of LTL freight in detail, explain the factors that cause rate variation and point out ways of preparing goods for shipment so you pay only for the cargo space actually utilised.
Loading Meters (LDM) and Pallet Spaces
While transport orders are often defined in units or pallets, the basic unit of measurement in LTL freight pricing is the Loading Meter (LDM). This parameter determines the cost of the service by reflecting the actual consumption of the available trailer space.
A Loading Meter is defined as one linear meter of the cargo area’s length across its full width (standardized at 2.4 meters). The valuation is based on calculating what portion of the trailer’s length the load occupies, thereby excluding that space from use for other goods.
In logistics, standardized conversion factors are used for the most popular carriers:
- EUR Pallet (120 x 80 cm) is calculated as 0.4 LDM.
- Industrial Pallet (120 x 100 cm) is calculated as 0.5 LDM.
These values result from the optimal arrangement of pallets in the trailer (three lengthwise or two crosswise, respectively).
For non-standard loads, such as machinery or long items, the physical footprint of the base becomes the key factor for pricing. A critical element here is the width of the load. If an item 2.5 meters long has a width that prevents another shipment from being safely placed next to it (e.g., it exceeds half the trailer’s width or has an irregular shape), the full length of the occupied space is used for the cost calculation. Precise dimensioning is essential to correctly estimate floor occupancy and avoid surcharges resulting from blocking pallet spaces.
Actual Weight vs. Chargeable Weight – Why Do You Pay for Volume?
The pricing mechanism for high-volume, low-mass loads is based on logistics standards aimed at balancing operational transport costs. In road transport, technical limitations are defined by two parameters: maximum payload (tonnage) and available trailer volume (cubic capacity). The fixed costs of executing an order remain similar whether heavy goods (e.g., steel) or light, bulky goods (e.g., insulation materials) are transported. Billing light loads solely on their actual weight would lead to unprofitability because the vehicle’s tonnage potential would be underutilized while its cargo space is fully blocked.
Consequently, freight calculations use the concept of chargeable (taxable) weight. The pricing procedure involves comparing the actual weight of the goods with the weight calculated based on the occupied area and using the higher of the two values for billing.
The standard market conversion factor assumes that 1 Loading Meter (LDM) corresponds to 1850 kg of calculated weight.
This mechanism is illustrated by two scenarios:
- Variant A (Heavy Goods). The load occupies 0.4 LDM and weighs 1000 kg. The actual weight (1000 kg) is higher than the calculated weight ($0.4 \times 1850\text{ kg} = 740\text{ kg}$). The actual weight is used for invoicing.
- Variant B (Light Goods). The load occupies 0.4 LDM but weighs only 100 kg. The actual weight is lower than the calculated weight (740 kg). The calculated weight becomes the basis for invoicing.
This model reflects the opportunity cost of reserving cargo space that could otherwise be used to transport goods of standard weight. The fee, therefore, covers the vehicle’s transport potential that has been effectively blocked.
Stackability – How to Save Up to 50% on Freight?
A major cost factor in LTL transport is the unused vertical space of the trailer. For loads marked as non-stackable, the cost calculation for a given pallet space accounts for the reservation of the vehicle’s full height. This is because it is impossible to place another load on top of that pallet, meaning the cost of the occupied floor area must be fully covered by a single batch of goods.
The ability to stack pallets allows for a twofold increase in floor utilization efficiency. In this setup, two load units are transported vertically in a single pallet space (e.g., 0.4 LDM for a EUR pallet).
This translates into a significant reduction in unit freight costs, sometimes reaching up to 50%. This solution is primarily used for transporting goods in durable secondary packaging, crates, or construction materials with a solid structure.
However, a declaration of stackability comes with strict technical requirements. The load must be properly prepared: it must have a flat, stable top surface and a structure capable of withstanding the pressure of another pallet. Unjustifiably classifying a fragile item as stackable poses a direct risk of damage to the contents of the bottom pallet.
For safety reasons, the standard assumption in pricing is that goods are non-stackable (unless the nature of the goods, such as metal cages, suggests otherwise). To achieve cost optimization, it is essential to clearly mark the stacking option in the RFQ (Request for Quotation) specification. This allows the dispatch department to plan the vertical placement of loads and reduce the number of invoiced loading meters.
Groupage System or Part Load?
The transport of smaller batches of goods is carried out under two distinct logistical models. Despite sharing the same goal—delivering the cargo—the operational processes and cost calculation methodologies differ significantly.
The first solution is the Network System, typical for large operators and based on a hub-and-spoke terminal structure. This process involves multiple stages: from pickup by a distribution vehicle to a local warehouse and central sorting facility, and finally to the destination branch. Pricing in this model is usually standardized and based on fixed rate tables depending on postal codes and shipment weight. It is cost-effective for single, standard pallet units (typically one to three), where fixed costs are spread over a large scale of operations.
However, lower freight costs come with an increased risk of damage due to multiple handling operations at various stages of the supply chain.
The alternative is Part Load (Direct Load), mainly carried out by carriers with their own fleets. In this model, the load is part of the loading plan for a specific vehicle that completes the route directly or with minimal warehouse operations between the sender and the receiver. Pricing here is market-driven and dynamic, depending on the number of loading meters occupied and current vehicle availability in a given region.
This model gains economic efficiency with larger batches of goods (more than three pallets) and non-standard loads not handled by courier systems. The higher freight rate in the Part Load system is compensated by minimized damage risk. Since there is no need for multiple transshipments, the goods remain on the trailer from loading until they reach their destination, guaranteeing a higher safety standard and shipment integrity.
Postal Zones and Distance – The Impact of Origin and Delivery Locations
In LTL logistics, the relationship between distance and transport cost is non-linear. Carriers rarely base pricing solely on the exact mileage between pickup and delivery points. Instead, a postal zone system is commonly used, which classifies regions based on their logistical potential and infrastructure accessibility.
A key factor influencing the rate is industrial density and the balance of cargo flows. Transport on routes connecting major logistics hubs and industrial agglomerations is characterized by relatively lower costs, even over long distances. This is due to high vehicle availability and the possibility of effective cargo consolidation, which minimizes empty runs and optimizes unit costs.
Different dynamics apply to peripheral regions far from main transport corridors (so-called surcharge zones). Serving locations with low industrialization involves additional dedicated mileage for single orders and the risk of lacking a backhaul load. Consequently, executing transport over a short distance in an area with low logistical density may generate higher operational costs than transport over a much longer route between key distribution centers. Therefore, the location of a warehouse relative to highway junctions is a significant variable in the transport offer calculation.
Basic Price Add-ons: Tail Lift, Notification, ADR, and Urban Zones
A basic price offer in road transport usually assumes an ideal scenario: the vehicle picks up the goods from a standard loading ramp and delivers during the receiver’s warehouse working hours. Any deviation from this model generates additional operational or time costs for the carrier, which must be reflected in the invoice as surcharges on the base freight.
One of the most common add-ons is delivery via a tail lift (tailgate). It is important to realize that standard curtain-side trailers used in international transport are not equipped with lifts. To deliver to a shop or a small company that does not have a forklift or a ramp, we must dispatch specialized equipment (usually a “solo” truck). The tail lift surcharge stems from several factors: the mechanism itself is heavy (limiting the truck’s payload), it requires regular inspections, and the unloading process takes significantly longer, requiring the driver to physically work with a pallet jack. This service changes the nature of transport from simple haulage to a courier-style delivery.
Another element affecting the price is requirements regarding time and communication, namely delivery notification (advice) and time-definite deliveries (FIX). While a simple driver call an hour before arrival is often standard, a requirement for delivery in a strictly defined time window (e.g., warehouse entry exactly at 10:00 AM) disrupts route planning flexibility. Such a restriction means the vehicle cannot perform other tasks in the area but must wait for the designated time. The blockage of the driver’s working time is a resource that must be priced.
Legal and infrastructural restrictions also constitute an important group of costs. The transport of dangerous goods (ADR) requires hiring a driver with the appropriate certifications, equipping the vehicle with protective and firefighting gear, and planning routes that avoid certain tunnels or roads. Even if the ADR goods only occupy one pallet, they impose safety rigors on the entire transport. Meanwhile, deliveries to city centers (urban zones) often require paid entry permits (e.g., for vehicles over 18 tons) or force the transshipment of goods onto a smaller delivery van, which generates an additional logistical operation and raises the total service cost.
Want to Know the Exact Transport Cost for Your Cargo?
Instead of estimating, contact us directly. At Jasek Transport, we will quote your order based on the real capabilities of our fleet, advising you on how to pack your goods to ensure transport is both safe and cost-effective. Send an inquiry, and our forwarders will get back to you with a specific proposal.
Frequently Asked Questions about LTL Transport Costs
Why does transporting a single pallet seem relatively expensive compared to larger batches?
There is a strong economy of scale in logistics. Transport costs consist not only of fuel consumed on the route but also the fixed costs of every operation, such as traveling to the loading site, time spent docking at the ramp, handling documentation, and the dispatcher’s work. These activities take almost as much time for one pallet as for ten. Therefore, for single-unit shipments, the fixed cost “weights down” the unit price much more than for a larger order. In direct transport (Part Load), you also pay for a large, 40-ton set to deviate from its main route specifically for your load.
What happens to the price if the goods overhang the pallet?
This is one of the most common reasons for price adjustments. If the goods are wider or longer than the wooden base (the pallet), the actual external dimensions of the load are always used for pricing. The carrier does not sell “pallet space,” but floor space on the trailer. If overhanging elements prevent another pallet from being pushed flush against it, empty space is created that cannot be used. In such a situation, the load is treated as non-standard, and the number of Loading Meters (LDM) is calculated based on its actual footprint, which increases the freight cost.
Why is a price offer valid for only a short time (e.g., 1–2 days)?
The transport market is extremely dynamic and operates in real-time. LTL pricing in the Part Load model is based on the current availability of free space on specific trucks located in a given region. The situation changes from hour to hour—a truck that had 3 meters of free floor in the morning may be fully loaded with another customer’s goods by the afternoon. Price guarantees are usually short because the carrier cannot block resources indefinitely without a confirmed order.
Can I lower the price by declaring the goods are stackable?
Yes, this is one of the most effective ways to optimize costs. If your goods are packed on sturdy pallets, have a flat top surface, and are strong enough to have another pallet placed on them, be sure to report this during the quote. This allows the carrier to use the same section of the trailer floor twice. As a result, you occupy fewer Loading Meters (LDM), which directly translates into a lower freight rate. However, remember not to declare stackability if it is not true, as this risks damaging the goods.
