What is Residential Freight Delivery & How it Works? | Citizenshipper

The transportation industry sometimes seems to have a knack for needlessly complicating things. We come up with terms that confuse the customers, then cling onto them thinking it makes us sound official and serious. One such term is residential freight delivery. You may have seen it abbreviated as RFD on shipping sites, and wondered what that’s supposed to mean.

And what is residential freight delivery? Put simply, it’s the process of delivering shipments to people’s home addresses (as opposed to commercial locations). That’s all there is to it! It’s when transporters bring the stuff that you ordered to your doorstep!

Is it really that simple?

Well… all right, so there may be a little more to it. We’ll try to outline this in layman’s terms, so bear with us.

In transportation, there is something known as an LTL shipment. This stands for “less-than-truckload”, which is pretty self-explanatory. When your shipment is bigger than a parcel (which can be simply mailed) but smaller than a full truckload (which costs a whole lot), it’s an LTL shipment. It’s somewhere in between!

So you hire a transport company, and they give you a quote. They tell you how much it’ll cost to get the shipment from point A to point B. And that’s where things get interesting.

The transport company would love to deliver your LTL to a commercial address. This could be a loading dock or a place of business, as long as it’s in a high-density urban area. Because that means they could deliver your shipment along with many others, spending less time and resources.

But that’s not always convenient for you, the customer. People prefer having items shipped to their home address — a residential location, not a commercial one. So the transport company does that instead… then charges you for the convenience. Big shipping businesses usually tack on a “residential fee” for this type of delivery simply because it would have been easier for them to ship to a commercial address.

So, what’s the cost of residential freight delivery?

Now, this can be tricky to estimate. The price differential between commercial and residential shipping is known as the last-mile surcharge. In 2023, last-mile shipping makes up 53% of all total shipping costs worldwide.

Statistic: Share of last-mile delivery costs out of total shipping costs. Source: Statista

In other words, the transporter may be charging you double simply to deliver to your doorstep and not to some warehouse downtown!

If it sounds unfair that you’re paying to make up the difference in the company’s savings… you’re not wrong. Fortunately, there are several ways of dodging the last-mile surcharge. For example, choose a transporter for whom there’s little difference between commercial and residential delivery.

Residential freight delivery as a matter of course

Smaller, independent transporters don’t really see the residential/commercial split as described above. Dealing with far fewer deliveries than the giant shipping corps, they’re not incentivized to ship to commercial addresses. Instead, door-to-door deliveries are their default!

When you book an independent transporter online, they never charge you extra for residential delivery. Whether you’re moving cargo or living animals, they’ll deliver to your address, no questions asked.

For tips on choosing the right transporter, click here. For additional advice or assistance, you can always contact us directly.