Less-Than-Truckload Motor Carriers: A Story of Diversity and Change

Beginning in 1998, the University of Michigan Trucking Industry Program (UMTIP) undertook a series of case studies of less-than-truckload (LTL) motor carriers. One reason is that LTL motor carriers are facing continuing changes in business conditions and in the competitive landscape. It is easiest to understand the specific case of LTL firms by first considering the two shipment-size extremes, parcel service, and full-truckload service. The basis of LTL operations, the combining of many medium-sized shipments from multiple customers into larger loads for long-haul movement, creates modest barrier to entry in this trucking industry segment. Because different LTL operations represent cost trade-offs for firms and because carriers serve different markets, measuring productivity is difficult and can be risky. Many firms had a variety of material handling equipment on freight docks, due to the diversity of freight that moves via LTL carriers including: fork lifts, pallet jacks, four-wheel carts, Johnson bars, rollers, two-wheel hand carts, drum dollies, and other similar equipment.