Insights

Parcel vs. Freight: The Differences and the Best Shipping Options for You

 

Parcel Shipping is ideal for lightweight shipments under 150 pounds, offering simpler handling.

Freight Shipping is suited for heavier, bulkier items requiring more complex logistics. It includes Less-Than-Truckload (LTL) and Full Truckload (FTL) options.

Cost Factors: Parcel shipping costs depend on weight, dimensions, and distance. Freight shipping costs are influenced by weight, density, distance, and freight class.

When to Use Parcel Shipping 

Parcel shipping is ideal for:

  • Items under 150 pounds with dimensions under 108 inches

  • Small to medium businesses shipping short distances in lower quantity

  • Precise, optimized delivery 

When to Use Freight Shipping

Freight shipping is better for:

  • Items over 150 pounds or with dimensions over 108 inches.

  • Larger shipments requiring truckloads and/or palletization, high in quantity 

  • Long-haul shipping with various modes

Navigating Gray Areas Between Parcel vs Freight Shipping

There are instances where the choice between parcel and freight isn’t clear-cut, such as packages near the 150-pound limit or multiple small parcels going to the same destination. A hybrid approach can often provide the best of both worlds.

Understanding Parcel vs Freight

Illustration comparing parcel and freight shipping

Whether you choose parcel or freight shipping, the principle is the same. When we’re talking about shipping, we’re talking about how your goods will travel (plane, train, automobile? All of the above?) and who will be handling them. 

Key factors in your shipping choice:

  • Weight

  • Size & Dimensions

  • Handling procedures, requirements, policies

  • Mode of transport

  • Complexity of travel logistics, Distance, Shipping Zones 

  • Quantity 

At the most basic level, Parcel shipping is designed for smaller, lighter shipments with simpler handling procedures. It’s commonly used by consumers and retailers for items under 150 pounds. Freight shipping, on the other hand, handles larger, heavier consignments and involves more complex logistics.

Let’s break that down more.

What is Parcel Shipping?

Illustration of small parcel shipping advantages

Parcel shipping is a shipping method that involves transporting only single or small quantities of packages at a time, often either by ground or air transport. 

Parcel shipping is the go-to method for lighter shipments, typically weighing less than 150 lbs. These shipments fit into small to medium-sized boxes and are often associated with consumer and retailer operations. Carrier or sub-contracted drivers deliver the goods.

Parcel Shipping Cost Structure

Parcel shipping costs depend largely on package weight, dimensions, and shipping zones. 

Cost considerations include:

  • Delivery speed. Faster delivery services, such as expedited air shipping, cost more. 

  • Shipping zone. Shipping zones are determined by the distance the package travels from its origin to its destination. Carriers consider this in their rates.

  • Package weight and dimensions. The more heavy and larger the packages, chances are the higher the rate, as well as possible handling fees. 

Businesses can negotiate rates with carriers directly, although many use third-party logistics partners to obtain competitive prices because of the access to insider relationships and business intelligence. Businesses can also leverage multi-carrier shipping software to compare rates across carriers and select the most cost-effective shipping option for their parcels.

Advantages of Parcel Shipping

Delivery flexibility.

Parcel delivery drivers have the flexibility to expedite delivery and carry additional parcels, optimizing the shipping process for small, time-sensitive shipments.

Delivery precision. 

Small trips and light packages mean more accuracy in the last mile. Parcel shipments also have fewer checkpoints, allowing for more streamlined and efficient delivery paths. 

Smaller, multiple trips.

Small or medium businesses that work in smaller quantities with lighter items can ship cost effectively according to their personal demand. For small packages that don’t require the full scale of LTL freight services, businesses can consider parcel shipping as a cost-saving alternative

Quicker transit times. 

The methods used in Parcel shipping (cars, air), are often faster than those in freight. For example, Ground shipping provided by parcel carriers can be an efficient and cost-saving method for close-range deliveries that require next-day service.

Negotiable, competitive tiered shipping rates.

Tiered rates can offer advantages to small parcel shipments. This cost-effective edge can be further amplified by the possibility of lower or even eliminated surcharges, making parcel shipping an attractive option for businesses keen on optimizing their logistics costs.

Different service levels ranging from express to standard delivery options, cater to various urgency needs and budget constraints.

What is Freight Shipping?

Illustration of shipping cost factors

Freight shipping is a shipping method that involves transporting truckloads or large quantities of goods at once, using various transportation methods such as trucks, cargo planes, ships, and trains. Shipments are handled by a freight driver.

Freight shipping offers two main options:

  1. Less than Truckload (LTL) Freight Shipment: For shipments typically between 150 and 15,000 lbs 

  2. Full Truckload (FTL) Freight Shipment: For larger, single consignments/truckloads. 

Freight Shipping Cost Structure

Freight costs are typically based on weight, density, distance, and freight class.

Freight shipping cost considerations:

  • Chosen Freight method. LTL and FTL shipments will vary in cost

  • Rate fluctuations. Rates can fluctuate during peak seasons or high-demand periods.

  • Weight and density. 

  • Distance. Longer distances will cost more in freight shipping, particularly depending on the mode needed (ship, train, plane) and the speed desired.

 The chosen method—LTL or FTL—also affects costs. LTL is cost-effective for shipments that don’t fill a truck, while FTL is better for larger loads. Rates can fluctuate during peak seasons or high-demand periods.

Advantages of Freight Shipping

Ideal for Heavy & Bulk Shipping.

Freight shipping handles heavy packages and bulk quantities efficiently. Packages that weigh into the hundreds of pounds are not suitable for parcel shipping due to weight limits, making freight the go-to.

Additionally, freight shipping can offer palletization for goods that need to be transported as such.

Less Damage.

Large, awkward, and heavy goods are less likely to be damaged by freight shipping, as they are handled by freight professionals with the proper knowledge and equipment.

More Security.

As opposed to parcel shipping, where a package may pass hands several times. Freight shipping will have significantly fewer handling checkpoints during transit–mitigating risks of tampering and theft.

LTL Benefits 

LTL is particularly beneficial and cost-effective for small to medium businesses, as it allows them to pay only for the space they occupy as opposed to a whole truck. This is ideal for shipping goods that are too heavy for parcel carriers but far too small to justify an entire truckload. 

To accommodate specific shipment needs, LTL carriers may extend services beyond standard pickup and delivery. These services incur accessorial charges and include residential delivery or liftgate service.

Strategies for Maximizing Efficiency

Illustration of combining parcel and freight strategies

Combining Parcel and Freight Strategies

Combining parcel and freight shipping can enhance efficiency. 

Adopting a hybrid strategy that combines parcel and freight shipping can be advantageous in certain situations. 

For instance, eCommerce sellers can enhance customer satisfaction by combining quick, reliable small parcel deliveries with larger freight consignments for high-volume shipments to repeat customers.

Businesses can improve cost-effectiveness by:

Discover the Best Shipping Approach for You

With parcel shipping catering to lighter, smaller shipments and freight shipping handling heavier, larger consignments, understanding the key differences between these two forms of shipping is crucial for businesses looking to optimize their logistics operations.

By evaluating their unique shipping needs and leveraging the strengths of both parcel and freight shipping, businesses can significantly enhance their logistics efficiency, reduce costs, and improve customer satisfaction. 

 

 

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Author: Brad McBride

Brad McBride, CEO and Founder of Zero Down Supply Chain Solutions is a dynamic leader with over 30 years of experience in the supply chain sector. His journey began at Consolidated Freightways in 1988, where he mastered freight logistics and pricing. His career led him to Eagle Global Logistics, diving into international freight forwarding and leading high-volume shipping projects.

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