Freight consolidation is a method of shipping that is ideal for small retail suppliers. This type of transportation increases time and money by blending limited loads for low-cost, efficient shipping. Freight from different sources with a common destination reaches a transit point and then moves on to the expected distribution center or retailer.
Freight consolidation is all about the operation of integrating several parcels or incomplete pallets jointly into a single container going to a shared route point before reaching their ultimate destination. Businesses can then utilize a smaller number of loads and get shipments to their destinations with increased efficiency and lower prices.
Freight consolidation is the process of taking many dispersed shipments and combining them into a single freight container. In this way, more than one supplier can supply these collective shipments. Also, they can travel by flight, waterway, or land route together.
No matter which type of freight the supplier uses, consolidated shipments move in the same direction to a defined waypoint. This destination is where the transportation company divides the combined load and ships it to its final destination, such as a retailer or distribution center.
Small businesses using this logistics approach can make better freight decisions and avoid spending a higher amount for partial loads. Suppliers can also circumvent long queues waiting to get a fully loaded shipping container ready. Freight consolidation can occur no matter how many packages are in a shipment.
Freight consolidation has the following advantages:
However, there are some drawbacks of freight consolidation to consider:
Consolidating shipments occur in two formats: off-shore freight consolidation and on-site freight consolidation.
Off-shore freight consolidation involves putting together often uncategorized shipments in large quantities bound for different sites. Consolidators classify and aggregate these shipments with others going to the same destination.
Off-shore consolidation is best for suppliers with less knowledge of the kinds of orders they expect to receive. This type of consolidation increases flexibility with deadlines and lead times.
However, additional expenditure and management of the shipment are necessary to ensure the freight arrives at the consolidator’s facility.
On-site freight consolidation involves putting together shipments at the items’ origin, such as the factory or source, instead of the warehouse. This method decreases the number of shipping points an order must go through, thus reducing the cost and increasing its efficiency.
On-site consolidation is best for consumables and items with expiration dates, as the product moves faster. This method is also best for suppliers with visibility into their supply chain, as they can see when consolidation must occur.
However, this system may require more staging space inside the facility and an increased workforce at the point of production.
Even though freight consolidation may not be the right option for every company, it has excellent benefits. Freight consolidation is beneficial to smaller suppliers or suppliers with smaller shipments to make the process cheaper and more efficient.
Most businesses rely on freight consolidation to regulate their shipping process, quicken the product’s delivery to customers, and support the establishment and maintenance of customer relationships.
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