How LTL/Groupage Freight is Priced
Less-Than-Truckload (LTL) or groupage freight pricing can seem complex, but it fundamentally relies on three primary methods. Understanding which applies to your shipment helps you predict costs and optimize logistics decisions.
Three Pricing Methods Explained
Per-Pallet Pricing is the most straightforward approach. This method works best for shipments with clearly palletized goods and consistent dimensions. This approach offers predictability and simplicity, making it ideal for regular shipments with standard packaging.
Per-LDM (Loading Meter) Pricing charges based on linear loading space occupied in the truck. One LDM equals one meter of truck bed width (typically 2.4 meters wide). This method suits shipments with irregular shapes or varying heights. A shipment occupying 2 LDMs costs roughly double that of 1 LDM. LDM pricing benefits shippers with lightweight but bulky goods, as you're not penalized for low weight relative to volume.
Weight-Based Pricing applies a cost per kilogram or per 100 kg unit. Heavy, compact shipments benefit from this method since weight determines the charge rather than space. This approach typically applies when goods are dense and occupy minimal truck space. Carriers use weight-based pricing to maximize truck utilization efficiency.
When Each Method Applies
Carriers select the pricing method that generates the highest revenue for them, protecting their margins. Per-pallet pricing applies to standard, palletized goods. Per-LDM pricing suits bulky items like furniture, large appliances, or construction materials. Weight-based pricing dominates for dense cargo like machinery, metals, or chemicals. Your freight forwarder typically chooses the method, though you can sometimes negotiate.
LTL vs. FTL Economics
Choose LTL when: Your shipment is small (under 8-10 pallets), you need flexibility, or shipping costs matter more than speed. LTL works for occasional shipments without volume commitments.
Choose FTL when: You have 15+ pallets or substantial weight. FTL offers faster transit, better security, and cost-per-unit advantages. Many shippers break even on FTL around 12-14 pallets depending on route and market conditions.
The price of a specific shipment depends on the route, cargo and date – get it instantly in our price calculator.
