Compare the TL and LTL segment of motor carriers in terms of

Compare the TL and LTL segment of motor carriers in terms of infraestructure.

Solution

There are two types of motor carriers these are Truckload (TL) and Less than truckload (LTL) carriers. As the names imply TL carriers take one unit of shipment from source to destination whereas LTL carriers are forced to consolidate. Infrastructure therefore, requires loading terminals and specific equipment at several destinations for LTL whereas TL does not require much investment in infrastructure of any kind. It is due to these differences that TL is by far one of the most common motor carrier arrangements in the US with its low barriers to entry. Cost Structures of TL and LTL are largely different in that Labor for Intercity Hauling is computed on distance as opposed to in city hauls which are computed on time. TL tends to be Intercity and LTL tends to be within the same city. Fuel likely is consumed at a higher rate with stop and go traffic and because of this LTL costs for fuel will be higher as well. Market Structure shows us that with low barriers to entry TL is best described as monopolistic competition and LTL appears to be largely oligopolistic. Operating characteristics are similar. Both TL and LTL can boast advantages over other modes of transportation in smoothness of ride, accessibility, and efficiency under 800 miles.