The last few years of increasing fuel costs, supply shortages, and supply chain constraints have shown us how important maintaining a steady stream of products and materials can be.
In response, many shippers have opted to consolidate their freight and shipments, taking up less space in a ship, plane, truck, or last-mile vehicle. This practice is known as freight consolidation and ensures multiple small shipments from one or more shippers go to the same destination–a distribution center–where individual shipments are subdivided and sent off to fulfillment centers or retailers. The various shippers split the shipment costs.
Key Freight Consolidation Factors
Freight consolidation can be a make-or-break planning exercise in efficiency and potential cost savings. Why and when does freight consolidation make sense? It can significantly affect customer satisfaction, efficiency, and shipping costs. And freight consolidation is beneficial for companies that do a large amount of parcel shipping, want to avoid delays, and need a steady supply chain.
Freight consolidation is an excellent way to achieve cost savings. Shippers that hire a less-than-a-truckload (LTL) carrier alone must pay full price, even if the rest of the space in the truck is unused. But consolidating multiple shipments into one LTL load means the carrier gets the most out of their vehicle, and shippers can split the bill the same way carpoolers split the cost of driving to work.
In addition, consolidating smaller shipments has been shown to ensure a steady and reliable stream of products/materials, which helps your business operate efficiently. Without delayed deliveries, production and shipping deadlines are easier to meet, shelves are easier to keep stocked, and orders are easier to fill. And your customers will be pleased with your performance in providing the goods and services you promise them.
You may also be glad that freight consolidation reduces your carbon footprint since you share space with others. Fewer trucks generate fewer emissions–a truly marketable benefit for shippers who want to tout a greener supply chain to consumers.
On the flip side, freight consolidation creates complex scheduling challenges requiring coordination with all participants’ schedules. And handling consolidated shipments in-house can make the job more challenging for your logistics manager. Furthermore, shipments sometimes have short lead times. If the most efficient way to ship your goods is to put them in with a consolidated shipment that’s going out the next day (or the same day!), that doesn’t leave much time to prepare your goods for transportation. Your staff may need to be ready to work quickly on short notice to get your goods together to meet the delivery deadline.
Lastly, consolidated shipping may require more handling than other methods. Proper packaging and palletization will often help avoid damage.
Are Your Logistics Folks Up to the Freight Consolidation Task?
If you’re running a smaller company, you may not have the bandwidth or staffing for freight consolidation. Or you may want to focus on your primary business goals instead. Some companies outsource freight consolidation to a reputable third-party logistics company, which saves hiring in-house logistics staff, managing your warehouse(s), and possibly even having to operate and maintain your shipping fleet. Finally, outsourcing logistics will ensure you don’t violate shipping regulations or laws.
Nexterus is a full-service logistics company providing customizable shipping solutions, including less-than-a-truckload (LTL) shipping, full truckload shipping (FTL/TL), ocean freight, air shipping, local and international shipping, warehousing, and more. We’ve been handling logistics since 1946 and have the expertise and network of industry connections to show for it. We can help you consolidate your freight to save costs, improve efficiencies, and help reduce greenhouse gases. Submit a form today to find out how Nexterus can help you with your logistics needs!
