If you’re a company who ships product, you need to educate yourself on the many shipping options out there to make sure you aren’t spending too much to move your inventory. One of these options is freight consolidation, and it might just be a superior alternative to your current methods.
Freight consolidation can potentially save you a ton on shipping, and has numerous other benefits that you may want to take advantage of. But you don’t have to do all of the homework yourself, in true consolidation form, we’re going to share the load with you!
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.
What Is Freight Consolidation?
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, 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 truck 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. A company like Flock Freight actually skips this step, and will carry the consolidated freight directly to the final destination, rather than adding a stop at the warehouse for additional organization.
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.
7 Advantages Of Freight Consolidation
1. 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. Perhaps the best news is that anyone that is using less than truckload (LTL) 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 occurs because you will share the cost of shipping because you will typically combine your freight with that of other companies on the same truck. No longer will you pay for empty truck 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 truck in partnerships with other companies who ship to the same region, 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 you work with saves on their 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 storage sites, inventory management facilities, and having your own fleet of vehicles. Freight consolidation providers can often provide these for you, should they be necessary., in order to manage your consolidation until it is sent to the final delivery. You won’t have to store your shipment on your own — you can send it to the facility where it will be shipped to retailers from, which helps streamline the process should more inventory be needed.
And taking things a step further, having fewer trucks on the road also means you will be spending less on fuel, as well as spending less per-mile on the shipment, since it will be one truck, rather than multiples.
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.
2. Safety Advantages
Things happen in shipping, it’s just a reality of doing business in which you ship products, but using freight consolidation can actually greatly reduce the risk involved. When you have systems in place and use an experienced shipper to handle your freight, your products will be in safer hands. And not only that — it will be in those hands less often, as there are fewer transfers involved in the shipment, meaning it won’t be handled as much as it would in other shipping methods.
Having your freight consolidated means that it will be on fewer trucks, making the odds smaller that one will be involved in an accident. This, in addition to the quality handling of an experienced provider, can give you peace of mind that your consolidated freight will safely reach its destination time after time.
And it actually goes beyond safety too, freight consolidation comes with added reliability as well. Because your product is handled less, there is a lower risk that something will go missing, or be sent to the wrong delivery point. There also is less of a chance that something will interrupt your delivery and cause it to be late. This all adds up to happy customers on the other end of your shipment.
3. Improve Customer Satisfaction
Obviously, having satisfied customers is a great benefit in itself. They may love your products, but you can harm your relationships with customers if you can’t consistently get shipments to retailers on time or keep up with their demand.
Using freight consolidation helps you to get your product to customers quickly and efficiently. This is especially true if you send inventory in advance to the consolidation facility. When an order comes in, your partner will send the product directly from the center, rather than having to come pick up more from your company. This allows you to stay ahead of demand, and be on top of your customer’s needs.
4. Manage The Entire Shipping Process
Using freight consolidation also gives you more control over your due dates and production schedules. You will also be able to manage the entire distribution chain either on your own, or through a logistics partner. Having more control over your shipment will notify you sooner, so things aren’t sent to the wrong destination.
If your shipping partner discovers issues with your shipment, it will then fall to your provider to remedy the problem. This takes control of delivering your product out of your hands, and makes the process less efficient. By consolidating your shipment, you will implement quality control measures at a warehouse close to your retailers that will help reduce the chances your orders lose time or quality.
5. Increased Consistency
Once you learn the ordering patterns of your customers, you can build them into your consolidation plan. This allows you to have inventory readily available for your customers and not be scrambling to fill orders. Having a consistent shipping schedule will also help you to better take advantage of the savings that freight consolidation provides, as it will help ensure you can fill up the space you require.
When you increase the consistency of your supply chain, you will lessen the odds that you have a late shipment, missing product, or a shipment sent to the wrong retailer. It will streamline your overall shipping process, keeping your customers satisfied.
6. Improve Your Customer & Carrier Relationships
By shipping smarter and more efficiently, you will be able to build relationships with other companies, customers, and your carriers.
First, you can establish relationships with other businesses who rely upon LTL shipping. Once you learn that another company sends a similar product, or a similarly-sized load on the same schedule to a shared retailer, you can establish a shipping partnership that will help reduce the costs for both of you and build smarter loads.
As for your customers, they’ll appreciate that you’ve gotten together to come up with a more efficient shipping system to send them products, since they work with both companies. They’ll also appreciate the savings that freight consolidation provides.
Working with the right carriers will make it all happen for you. You need a company you can rely upon to manage your orders and make sure products get to where they are supposed to be, on time. Your products may have special needs that your carrier will have to provide for, and not having a relationship in place will not give you any reassurance that things are going to turn out fine. Consistent relationships with your carrier can also lead to better pricing in the future.
7. Improved Flexibility & Time Management
Using freight consolidation will also improve the flexibility of your shipping needs and make your orders more timely. Freight consolidation often offers faster transit times, as well as reducing wait times for transporting small loads.
Having your freight stored at a consolidation facility will have your products ready to go when they are needed for shipment. This improves your timeline and inventory flexibility, which your customers will appreciate should their needs change. Changes in orders can throw things into a real mess with other shipping options, but having your freight consolidated will not hinder your ability to get your products to your customers on a short turnaround.
While freight consolidation might not be the best choice for every business, it has major advantages should it fit your company’s needs. Freight consolidation should help most businesses in some way, and can be utilized for smaller shipments to make the process cheaper and more efficient, as well as touching on each of the other benefits listing above.
Many businesses depend upon freight consolidation to help streamline their shipping process, get product to customers faster, and help to build and maintain relationships.