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Amazon Freight: SP, LTL, or FTL?

The right shipping choices are pivotal to your operational efficiency, cost-effectiveness, and overall success when venturing into Amazon selling.

Amazon Freight presents three primary inbound shipping modes: Small Parcel (SP), Less Than Truckload (LTL), and Full Truckload (FTL). But which one suits your business needs the best depends on several factors.

In turn, your choice of shipping method influences several facets of your business from the ground up. Keep reading to uncover the nuances of each shipping option so you can determine the right option for your business.

Read: What is Amazon Freight and Why to Use It

The rise of eCommerce and its shipping demands

The digital age has reshaped the way people shop. With just a few clicks, consumers can have products from around the globe delivered to their doorsteps.

But behind the scenes of this shopping revolution is a complex network of logistics that makes it all possible. The ever-increasing prominence of online shopping has also brought the heightened demand for efficient shipping systems.

From boutique startups to established giants, the eCommerce industry spans many products, services, and consumer needs. In 2021, over 2.14 billion people worldwide purchased goods and services online.

Online platforms allow businesses to extend their reach far beyond local or national confines, with shipping evolving from local deliveries to complex international logistics. Additionally, different products have unique shipping requirements, which adds layers of complexity to the process.

Consumer expectations

Giants like Amazon have revolutionized consumer expectations. Thanks to rapid delivery promises like Amazon Prime’s one-day or two-day shipping, the benchmarks for online shopping convenience have become more stringent.

Consumers are now accustomed to instant gratification, be it streaming a movie or downloading an eBook instantly. That desire for immediacy extends to their shopping habits, with many willing to pay a premium for faster delivery — and that’s the start of their expectations. They also demand transparency. The ability to track their orders in real time, with accurate estimations on delivery dates, has become standard.

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Understanding the different Amazon Freight shipping modes

Each shipping mode, be it SP, LTL, or FTL, serves a distinct purpose and caters to various volumes and types of shipments.

1) Small parcel (SP)

For sellers who operate in niche markets with limited inventory or smaller items, SP may be the perfect solution.

The primary allure is its impressive turnaround time. Think of SP as the express service of Amazon Freight: You’re guaranteed quick receiving, sorting, and delivery times, ensuring your products reach the Amazon fulfillment centers at lightning speed.

With SP, there’s minimal room for disruptions. Each parcel receives individual tracking, which reduces the likelihood of misplacement. It’s akin to sending several express mail packages, each with its own trajectory and timeline.

2) Less than truckload (LTL)

On the surface, LTL is a logical choice for businesses that operate on a slightly larger scale but not large enough to warrant an entire truck.

LTL is inherently riskier though. With multiple sellers’ goods packed into one truck, the logistical challenges multiply. One delay can set off a chain reaction, jeopardizing the timely delivery of all products in that truck.

Imagine a carrier in charge of delivering your products is suspended due to late deliveries. This is bad news for both the carrier and you: Your inventory is stranded, waiting for bureaucratic red tape to clear or alternative shipping arrangements. It’s not just a delay — it’s a potential business setback.

Tip: Working with a large scale FBA prep facility can provide the flexibility and volume benefits of LTL with the speed and security of FTL by combining multiple customers within the same facility onto a dedicated truck. MyFBAPrep is able to do this in instances where a single customer doesn’t make sense for a full truck, but combined together they compromise multiple truckloads each week.

3) Full truckload (FTL)

FTL is for the heavy hitters — the businesses that operate on a grand scale. This option could be right if you regularly ship vast quantities of products.

FTL gives you unparalleled control over your shipment. The entire truck is dedicated to your inventory, ensuring the focus remains on delivering your items on time.

Initially, FTL might seem like a significant investment. But the cost per item shipped can be surprisingly economical for substantial shipments. It’s bulk shopping — the more you ship, the more you save.

The LTL maze and how to navigate it

LTL is often seen as the middle ground, balancing the scale between SP and FTL. But with that come compromises, and in the case of LTL, they can be challenging.

When carriers handle LTL shipments, they juggle deliveries for multiple sellers. This multitasking increases the margin for error. A delay in one delivery or a missed appointment can lead to cascading delays for all shipments on that truck.

Service providers often have to mitigate these disruptions by orchestrating either the return of goods or finding an alternative shipping method. Both scenarios are resource intensive and can also be detrimental to your business’s reputation and efficiency.

The risks associated with LTL don’t stop at potential delays or disruptions either; there are other moving pieces to deal with, such as:

  • Handling and damages: More hands touching your products increases the risk of damage. LTL shipments often involve multiple transfers, which can result in a higher rate of damaged goods.
  • Insurance complexities: Insurance claims can become complicated with multiple sellers’ goods on one truck. Determining responsibility for lost or damaged items in such scenarios can be lengthy.
  • Limited flexibility: Unlike FTL, where you can dictate specifics due to the volume and exclusivity of your shipment, LTL is limited in flexibility. For instance, there may be restrictions on when a pickup or delivery can occur.
  • Lack of customization: Need a temperature-controlled environment or specific handling instructions for fragile items? LTL can’t always accommodate specific requirements like these. The presence of multiple sellers’ goods often means a one-size-fits-all approach to shipping conditions.
  • Unpredictable costs: With LTL, costs can fluctuate based on the volume of freight in the market, available space on trucks, or seasonal changes. That unpredictability makes budgeting difficult.
  • Security concerns: Multiple stops open more opportunities for theft or misplacement. With so many products on board, it can be challenging to ensure the security of each parcel, especially if there are high-value items involved.
  • Environmental impact: Although LTL combines shipments, it’s surprisingly not always the most environmentally friendly option. With multiple stops, detours, and possible reroutes, the shipment’s carbon footprint increases.
  • Longer transit times: With their numerous stops and combined goods, LTL shipments tend to take longer than dedicated shipments, which affects your products’ speed to market.

Why FTL and SP should be your top picks

The intricacies of LTL can be daunting, while FTL and SP emerge as the shining stars in this lineup. We’ve summarized why these two modes could be the best picks for your business.

Advantages of FTL

  • Reliability: Risks diminish considerably with an entire truck dedicated to your goods. There’s a single point of focus, which ensures your products reach their destination without hitches.
  • Cost-efficiency: While the initial investment might be higher, the returns, in the long run, are promising. Think of it as a long-term investment with guaranteed dividends.
  • Flexible scheduling: With FTL, you often have more flexibility in scheduling pickups and deliveries according to your preferences, allowing better control over inventory flow.
  • Faster deliveries: Since the truck is dedicated solely to your inventory, there aren’t multiple stops to drop off other shipments. This typically results in quicker delivery times.
  • Better for fragile items: If your cargo is delicate or requires special attention, FTL provides an environment where goods aren’t shuffled between different locations, minimizing potential breakage.
  • Customization: Many carriers offer the ability to customize the conditions inside the truck, useful for products that need specific environments, like temperature control.

Advantages of SP

  • Turnaround time: Have time-sensitive products or limited edition items? With SP, you can rest assured your goods will be on the shelves in record time and prime condition.
  • Less complexity: The logistical simplicity of SP is its selling point. Each parcel tracked individually brings clarity to the process, which reduces potential bottlenecks.
  • Cost-effective for small volumes: If you’re not shipping in large quantities, SP is often more cost-effective than paying for space you won’t use in an LTL or FTL shipment.
  • Better damage control: Since parcels are individually packed and often handled with more care, there’s typically a lower chance of product damage compared to bulkier shipments.
  • Flexibility: With SP, you have the flexibility to send products as and when they’re ready rather than waiting to consolidate a larger shipment.
  • Enhanced tracking: Modern customers expect to be able to track their orders in real time. SP shipments often provide more detailed and accurate tracking updates, thus enhancing customer satisfaction.
  • Scalability: As your business grows, scaling up with SP shipments is easier. You can gradually increase the volume of your shipments without significant logistical upheavals.

Wrapping up — Choose the right Amazon Freight options for your business

eCommerce is dynamic, and with platforms like Amazon, the pace is dizzying. Your shipping choices can significantly influence your business trajectory.

While LTL blends SP’s nimbleness with FTL’s volume, it brings some noteworthy challenges. On the flip side, with their distinct advantages, FTL and SP offer a more streamlined and efficient shipping experience.

As you chart your entrepreneurial path in the Amazon marketplace, it’s essential to prioritize efficiency, speed, and reliability. After all, a timely delivered product can mean the difference between a satisfied customer and a lost sale.