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What is freight consolidation?

Consolidation is the process where a carrier or a shipping company combines several smaller shipments into one full container.

Ideally, consolidation favors both the carrier and the shipper. In the case of the carrier, it helps to reduce the cost of shipment and to make delivery of goods quicker. And for the shipper with smaller shipment, he would not need to pay for a full container shipment.

 

In this post, we’re going to cover seven of the biggest advantages freight consolidation can offer, but first, let’s go over what exactly freight consolidation is.

 

Freight consolidation is a shipping service that can lower the total shipping cost as well as increase security. Freight consolidation is just one of the many names given to the service, including consolidation service, assembly service, and cargo consolidation, but no matter what a provider chooses to call it, the concept remains the same.

Freight consolidation is a process in which several small shipments that are all being sent to the same location will be bundled, or consolidated on a single truck/container , and then shipped together to their destination. The process is not only beneficial to the shipper, but also the customer or retailer to whom the products are being sent.

Because of the consolidation and shipping multiple products all at the same time rather than sending multiple smaller shipments separately, shippers are able to pay bulk rates. This makes freight consolidation ideal for companies who generally send a few pallets of product at a time, or those who have a high frequency of smaller shipments. Instead of sending them all separately, the shipments will be consolidated and shipped in one container.

While the items in the shipment most often come from a single supplier, other times the cargo can come from multiple locations. This helps ensure the container  will be filled and helps to keep costs down.

During the freight consolidation process, a company’s products will be picked up and brought to a consolidation warehouse that is centrally located to each shipment’s final delivery. Products are then typically unloaded and organized, and sent to final delivery.

There are many benefits to using freight consolidation, including simply reducing headaches through the shipping process, but it all starts with and revolves around cost savings.

Advantages Of Freight Consolidation/Significant Cost Advantages

Not only are there numerous advantages to freight consolidation in general, but there are actually multiple ways in which it can save you money.  The best news is that anyone that is using less-than container shipping can benefit from freight consolidation. The process will save your business money on the shipping end, thus making it more profitable, because the logistics are now more efficient.

These savings occur because you will share the cost of shipping because you will typically combine your freight with that of other companies on the same container . No longer will you pay for empty container  space that you don’t use because you aren’t shipping enough product to fill the container. You will only pay for the space your cargo takes up and nothing more.

By optimizing how you use space in the container in partnerships with other companies who ship to the same country , your overall cost of shipping will be lowered. You’ll also save by getting bulk rates for your shipment should you be able to fill the entire truck yourself with multiple shipments of your own.

And your customers can save too! By combining orders from separate supplies and/or locations and sending them to a consolidation warehouse, they can then have the products shipped together at any time. This allows for more frequent, smaller purchase orders, which means more cash will be flowing into your business, while the retailer we work with saves on your  end for shipping.

If you receive shipments, you can also reduce how much you’re spending on freight for your inbound inventory. The all-around savings leads to a better relationship with you and your customers.

By using freight consolidation, you can also avoid the heavy costs that come along with port storage.

The savings can be significant enough to make a big difference in your company’s bottom line, and help to boost your profit margin. This can be a real difference-maker for mid-sized and smaller businesses who have their profits cut into greatly by shipping costs.