ISE 754 (Fall 2026) 3.2 One-Time Truck Shipments

Overview

Michael G. Kay explains how to estimate a reasonable price for a one-time truck shipment before requesting carrier quotes, comparing truckload (TL), less-than-truckload (LTL), and package express services. He shows how to estimate TL charges using load density, truck capacity, distance, and a Bureau of Labor Statistics producer price index, then contrasts LTL regression estimates with negotiated freight-class tariffs.

Key takeaways

A 2004 TL revenue benchmark of about $2 per loaded mile can be updated for another year by multiplying it by that year’s BLS truckload PPI divided by the 2004 average of 102.7.
A typical TL trailer carries up to 25 tons by weight but has an effective usable cube of about 2,750 cubic feet, so shipment density determines which capacity limit binds.
The carrier’s loaded-mile revenue rate must cover more than the shipper’s route: deadhead travel to collect a load and after delivery contributes to the carrier’s cost.
For the Raleigh-to-Gainesville example, LTL becomes more expensive than TL beyond a break-even shipment size of about 0.8 tons, and the shipment reaches its cube limit at 6.11 tons.
For LTL, regression formulas provide a ballpark estimate, whereas a negotiated tariff is an agreed billing mechanism based on freight class and quantity, often combined with a discount.

Chapters

0:00 Truckload, LTL, and Package Express Service Models

Truckload (TL) moves a shipper’s load directly from its premises to the destination on a trailer.
LTL and package express (PX) shipments pass through carrier terminal networks, where freight is transferred between trucks rather than stored.
LTL terminals are cross-docking facilities, often recognizable as long, narrow buildings near airports.

3:39 Logistics Benchmarks and Updating the $2-per-Mile Baseline

Use a 1.2 circuity factor for distance estimates, but use actual road distance for trips under 50 miles.
A 25-ton (50,000-pound) truck payload and 2,750-cubic-foot effective capacity are practical TL benchmarks.
The 2004 TL revenue benchmark is about $2 per loaded mile; carrier costs are lower and the revenue rate accounts for profit and empty deadhead miles.
Adjust historical rates with the BLS truckload producer price index: the 2004 average is 102.7, while January 2018 is 131; the August 2026 index is 207.6.

13:05 Truckload Pricing by Density, Capacity, and Shipment Size

Compare load density with the 25-ton weight limit and 2,750-cubic-foot effective cube to determine whether a shipment weighs out or cubes out first.
Estimate a TL charge by applying the adjusted per-mile rate to the route distance, using the shipment’s maximum payload to account for capacity utilization.
In the Raleigh-to-Gainesville example, the TL/LTL break-even point is about 0.8 tons; the shipment cubes out at 6.11 tons despite the truck’s 25-ton weight limit.
For many items moving together, create one aggregate shipment and apply the same estimation method instead of calculating every item separately.

16:49 LTL Regression Estimates, Freight Classes, and Tariff Discounts

Estimate LTL charges using shipment density, quantity, distance, and the LTL producer price index, then compare the result with the TL estimate.
LTL is generally suited to smaller shipments; its charge rises with shipment size, while a TL charge applies to the truck and stays flat until capacity requires another truck.
U.S. LTL freight classes depend primarily on density but can also reflect handling characteristics such as fragility; a class can provide an expected density for estimating.
A negotiated tariff maps freight class and shipment quantity to an invoice charge; recurring shippers commonly negotiate the classification and a discount rather than each shipment individually.

Summary, takeaways, and chapters were generated by AI from the video's transcript and may contain errors. The video belongs to its creator, Michael G. Kay.