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Hub and Spoke vs LTL Shipping

Hub and Spoke vs. LTL Trucking

Actually, both systems may often work together. For instance, small shipments don’t fill a trailer unless combined with other small loads. Hub and spoke freight trucking takes multiple small shipments to a location, often a city (called the hub) to be delivered to the spokes (individual destinations within a reasonable distance from the hub). This works well when multiple drops are located within the hub city.

Combining the Two

Hub and spoke strategy may sometimes be combined with LTL trucking when delivery destinations are farther from the hub and spokes. LTL is less than truckload and is used for deliveries farther afield from the hub. Both strategies work because smaller shippers can find trucks at reasonable rates. Both segments are popular with carriers and shippers. Receivers also find both systems simple and quick, facilitating inventory control for receivers and taking advantage of reasonable shipping rates. Definitely a win-win.

Defining LTL Trucking

Less than truckload (LTL) refers to carriers hauling multiple shipments to different locales, often over long distances, even reaching into several different states. For example, a single trip hauling fresh produce with multiple deliveries over many miles between. LTL shipments are often loaded on pallets and placed in the trailer in reverse order to simplify unloading in the right order of deliveries. Truck drivers like it because they can call the receiver to provide a delivery time and are in and unloaded and back on the road quickly.

Oftentimes, the road home may look similar to the delivery load. A number of pickups may be involved in the drive back to the home terminal when you’re an LTL driver. But the reality is that pickups are usually loaded quickly. Shippers want their product on the truck and rolling.

Optimization Equals Profit

For carriers, LTL trucking is all about filling trailers to optimize payloads and turn a profit. But LTL can be complicated. Multiple shippers and as many receivers make for intricate scheduling for pickups and deliveries.

It’s all hands on deck when putting together a LTL trailer load. Even the sales team is involved.  Back-office personnel are on hand to track all transactions to make sure the loading and billing are accurate. With LTL shipments and numerous shipments, the trailer is full but the cost of multiple shipments being cost effective results in a higher bottom line for the carrier.

Paid by Mile Drivers Like LTL

Hub and spokes work well when your truck is close to a central hub and distances to spokes are limited. But it’s clear that LTL will pay better. Any paid-by-mile driver will always prefer LTL over hub and spoke. Money talks for shippers, sales, and truck drivers.

LTL proves to bring speedy deliveries of inventory and enables receivers to provide timely delivery of awaited sales, making everyone happy.

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