Table of Contents
Abstract
Fragmented freight systems typically arise by means of accumulation rather than intentional design. When there is an immediate concern, there is an opportunity to find a carrier who can offer a solution, whether it be a rate to move freight in a new lane or how to move a specific shipment type. The cumulative result is a fragmentation of freight operations in which full truck loads, less-than-truck loads, and multi-modal freight movements are isolated from one another across separate logistics services. The realities of doing business may result in each individual mode working reasonably well on its own; the overall system then becomes fragile.
In this white paper, we examine why fragmented freight does not work well at scale, and how unifying FTL, LTL, and multi-modal execution can create operational stability. At InstiCo Logistics, we focus on meticulous details that are overlooked by many, such as the mechanics of planning, execution, visibility, and accountability through connected freight channels supported with disciplined logistics planning services.
Where Fragmented Freight Begins to Break Down
When freight is being planned, executed, and measured, it can end up being fractured if the freight modes are done independently and without regard to how they interact with one another. The use of different contracts, systems, and personnel creates the handoffs between FTL services and other mode-specific providers.
Some typical signs of fragmentation include:
Lack of shipment visibility across freight modes
Inadequate appointment scheduling & cutoff management
Uncertainty as to who owns the freight before & after is shifted from one mode to another
Unique mode-specific KPIs, therefore, do not reflect the costs and/or performance downstream from their location.
These differences and the fact that there is no one company within the multimodal transportation chain of movement (drayage to transload to FTL line-haul to LTL delivery) that is responsible for the entire process from the origin to the destination open up additional risks for delays to occur. It decreases the amount of time available to recover once a corporation’s freight has passed through each link within the supply chain.
What Actually Fails Inside Fragmented Operations
Fragmented operations do not experience dramatic or catastrophic failure as a result of one thing going wrong. Instead, it is exemplified by one or two opportunities to miss that tend to compound.
In full truckload shipping, fragmentation is present as missed appointments, unmanaged dwell times, and detention dispute issues. In less-than-truckload (LTL) shipments, fragmentation is present as reweighing shipments/reclassifications, terminal delay issues, and claims disputes related to a lack of understanding of LTL freight meaning at the receiving locations. Within multi-modal shipments, fragmentation generates failures at port cut-off locations, container availability points, and mode transition points.
Each mode of shipment generates its own set of data at different points in time and applies different escalation timing guidelines. If these are not closely aligned, the ability to react to missed escalation timeframes is delayed substantially because the signals have arrived after decisions were supposed to have been made, particularly when LTL services and truckload operations are managed separately.
How Missed Connections Turn Into Cost
Each mode shows its own performance but does not present the overall landed impact across FTL shipping and last-mile delivery.
When a dray move is late, the transload window moves too. Therefore, transloading gets compressed from the late dray move, impacting the departure of the full truckload shipment. The full truckload shipment arrives late, which consequently results in an expedited less-than-truckload shipment or missed retail delivery. Although the detention, storage, accessorials, and penalties show up on the invoice, the reason for the original issue is rarely included.
The same issue is compounded by fragmented billing. Costs are compared from one line item to the next instead of being compared from event to event. There is no way to optimize your rate while also absorbing avoidable operational costs across the logistics and services arrangements when there is no integrated view.
What Integration Really Means in Practice
Integrated freight does not mean utilizing one mode to ship. Integrated freight means having the ability to execute multiple modes under one execution model and not discussing LTL vs FTL on a shipment-by-shipment basis.
To integrate shipments requires:
- Shared planning assumptions for full truck load, less than truck load, and multi-modal.
- A common set of shipment milestones and timekeeping for all modes of shipments.
- Clear line of responsibility for each handoff.
- A common set of escalation and recoveries.
Whenever a shipment’s mode changes, ownership of the shipment does not cease. Ownership of the shipment is transferred intentionally, with a clearly defined trigger and response timeframe between the multimodal freight services.
How Integrated Execution Reduces Failure
Execution of integrations improves results because of the shorter time between signals and action.
Delays affect all miles for all delivery windows. A single port delay will create a cascading effect on all downstream scheduling. Consideration of true arrival probabilities creates more accurate dock plans through coordinated appointment management. Unified exception handling starts recovery before recovery options are unavailable for FTL shipping.
A high-level operating loop would look like:
- Conduct shipments across all modes using common sets of constraints
- Execute shipment using coordinated dispatch and appointment logic
- Determine when deviations occur by common event definitions
- Recover through predefined actions
- Learn from the problem by correcting the structure of any learning.
All steps support the next.
Designing the Right Mix of FTL, LTL, and Multimodal
Integration doesn’t remove trade-offs; it makes trade-offs explicit.
Effective networks are used to segment freight by:
Size and density of the shipment
Precision of the time of delivery
Volatility of demand
Constraints of the receiving location
FTL, LTL, and Multimodal freight services have their respective best uses. FTL is a preferred option for predictable volume/delivery windows. LTL is the preferred option for fragmented volume/delivery windows. Multi-modal typically provides an opportunity for cost/capacity balancing, but is dependent on the time frame of delivery. An example of multi-modal would be a truck load with port and rail movement.
There are rules for determining when the freight is to shift from mode to mode and how buffers will be utilized. Time buffers are used to protect appointments. Inventory buffers are used to protect the service level. Capacity buffers are used to protect time periods from an increase in volume. Integration allows intentional placement of buffers as opposed to reactively placing buffers.
How Standardization Enables Flexibility
It’s odd, but practically speaking, standardization is needed for integration.
Some successful companies create a standard approach to:
Packaging/labeling
Documentation
Appointment requests
Exceptions
Standardized input gives you a flexible way to do routing/modes of transport. Without standard inputs, every shipment is treated as though it were special, and the integration falls apart due to complexity.
How InstiCo Logistics Supports Integrated FTL, LTL, and Multimodal Execution
InstiCo Logistics offers premier logistics services such as FTL, LTL, and multimodal transportation networks. Our role is planning, coordinating, and executing shipments from beginning to end with the same level of consistency, accountability, and operational control across all of the connected freight flows.
InstiCo Logistics assists organizations by:
- Coordinating/executing FTL, LTL services, and multimodal shipments under one execution model
- Providing unified visibility and milestone tracking across modes
- Proactively managing exceptions to minimize disruptions to downstream operations
- Using standardized processes for reducing delays, handoff errors, and hidden costs
By integrating freight execution together (rather than treating each mode in isolation), we enable companies to move freight reliably with very few operational surprises.
Key Takeaways
Fragmented freight systems typically do not work because there is no single owner of the system from end to end. Each mode executes its individual processes, but when viewed from the perspective of brands and shippers, the entire flow of freight deteriorates due to unmanaged transitions and delayed decision-making.
By restoring control to FTL services, LTL services & multimodal transportation through an integrated transportation execution function aligning planning, visibility, and accountability throughout the life cycle of the shipment, organizations are able to avoid more exceptions, recover faster from exceptions, and incur costs that result from planned design rather than operational accidents.
Ready to streamline your transportation network? Contact us.
Key Terms and Acronyms (Glossary)
- FTL (Full Truckload): A shipping method where a single shipment occupies an entire truck, typically used for high-volume or time-sensitive freight.
- LTL (Less-Than-Truckload): A shipping method where multiple shipments share trailer space, commonly used for smaller or fragmented volumes, which defines the practical LTL freight meaning in day-to-day operations.
- Multimodal Transportation: The movement of freight using more than one mode of transport, such as truck, rail, or port drayage, under a coordinated execution plan.
- Freight Fragmentation: The condition where FTL, LTL, and multimodal shipments are planned and managed independently, resulting in handoff gaps and reduced operational control.
- Integrated Freight Execution: A unified operating model where multiple freight modes are planned, tracked, and managed under shared processes and accountability.
