Defining Density and How It Impacts LTL Freight

Today, businesses are often faced with the choice between implementing a Full-Service transportation management system (TMS) or using standard freight brokerage services. Each option comes with its own set of pros and cons, catering to the different needs and preferences of each company, like the complexity of operations, shipping volume, customer expectations, inventory management, and more. Let’s take a look at each solution.

The density of a shipment is an important component of shipping Less-than-Truckload (LTL) freight. Not only are there specific density-based pricing programs available with various carriers, but it’s also a main driver in receiving lower (or higher) customer-specific pricing (CSP) with a carrier. Carriers want to maximize the space used on their trucks, and a higher-density product better utilizes the cube of the trailer and is more cost effective for a carrier to move, resulting in more favorable pricing for the customer.

The Red Sea crisis has garnered significant attention in recent months as a result of the challenges it has placed on the global supply chain. The Red Sea, which provides access to the southern entrance to the Suez Canal, is one of the most important and densely packed shipping channels in the world. Roughly 19,000 vessels travel between the Indian Ocean and Mediterranean Sea each year and the Suez Canal reduces shipping distance between Asia and Europe by nearly half. About 12% of global trade, opens new tab passes through the Red Sea, including 30% of global container traffic and $1 trillion worth of goods each year, reported by Reuters.