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LTL consolidation is a shipping method that, like pool distribution, can save your company a ton of money on your shipping costs … if it makes sense for your business to use. But how do you know if LTL consolidation will work for your company or not?
We’re going to break down LTL consolidation and the situations in which it would be beneficial for a company to use it, as well as some instances where it may not make the most sense. But before we can get into what exactly LTL consolidation is, let’s quickly go over what it’s not — pool distribution.
LTL consolidation vs pool distribution
While LTL consolidation and pool distribution definitely belong to the same family of shipping methods, they are actually almost opposites, in a sense.
Pool distribution involves distributing multiple shipments to several destinations within the same geographic region. Most pool distribution shipments will fall within a weight range of 150 to 10,000 pounds. Companies will most often use pool distribution when they have a high frequency of regular shipments in these LTL quantities.
Using pool distribution makes the shipping process more efficient in these instances, and is often a faster and much more cost-effective shipping method.
In pool distribution, shipments are loaded onto consolidated trailers and sent directly to regional terminals, rather than going straight to the final delivery location. At these terminals, the cargo is offloaded, sorted, scanned, and reloaded onto local delivery trucks to reach each shipment’s final destination.
LTL consolidation is essentially the reverse of pool distribution. In this process, individual shipments are gathered from various shippers and then consolidated at regional hubs. These consolidated loads are then sent to their final delivery locations. Like pool distribution, this can offer significant savings and faster shipping.
Using consolidated shipping allows the shippers involved to take advantage of lower shipping rates, because they are sharing the truck with multiple shippers in one full container. Since the entire shipment is being sent to the same destination, it reduces cost and time through the shipping lane and optimizes the company’s logistics.
What is LTL consolidation?
To break things down a bit further for you, LTL consolidation is the process that occurs at the beginning of a shipping lane. Shipments from multiple vendors are consolidated onto a single truckload and brought to a regional distribution center or terminal, where the shipment will be put onto separate local delivery trucks to be brought to their endpoint.
When LTL consolidation is not paired with pool distribution, it means that the shipments are heading to the same location. There is no need for the pool to be distributed at the end of the lane because there is only one location.
The advantages of LTL consolidation
Being able to load a shipment onto a single truck gives companies a more efficient way to ship their products. LTL consolidation is perfect for smaller companies who have smaller shipments that they can consolidate into one shipment, rather than send several to the same location over time through traditional LTL shipping.
The shipments heading to similar locations will be combined at a consolidation facility and be sent to their final destination on a single truck. This simplifies the shipping process, and allows companies to not have to worry about any complicated classifications that sometimes come with moving consolidated freight.
More cost efficient
Naturally, being a more efficient shipping process also makes LTL consolidation less expensive, which many will find to be the most important advantage. By creating a more optimized supply chain with LTL consolidation, your products will get to where they need to go in the most efficient way possible.
When shipping, companies will often have to pay for the entire truck, even if their product does not fill up the entire space. However, consolidation allows a company to combine separate LTL shipments that are heading to the same geographic area into one truckload, perhaps even sharing the truck with other companies. In these cases, the companies will only pay for the space in the truck that their product takes up.
Combining multiple LTL freight shipments into single, full truckloads, your company can save on shipping costs while also reducing your emissions, as well as increasing your productivity and profits. Since you are consolidating multiple shipments into a single truckload, you are putting fewer trucks out on the road, which costs you less money while reducing your environmental impact.
The pricing of LTL consolidation is very straightforward: you pay for the square footage of the trailer that you use. But even if your shipment takes up a larger space, you should still see significant savings, because of the reduced transfers. Not only that, but since shipments won’t be handled as much, there will be less risk of damage to your product too.
Less handling means less risk
Because fewer transfers will be required, there is a significantly reduced risk for damage to your products in LTL consolidation. Not having to load and unload the product several times makes the process safer for your shipment, as they will only be traveling from your distribution center, to the consolidation terminal, and on to final delivery. By having less touchpoints, your products will be in safer hands, so to speak.
Improved quality control
Using LTL consolidations also allows you to have control over your shipment sooner if something goes wrong. Since your product is scanned at each touchpoint, you will be alerted if anything is amiss or damaged during transit, allowing you to fix the problem before it reaches your customers. With consolidation, you will have some quality control measures in place to reduce the time lost, which helps you keep your customers happy.
When to use LTL shipping
So back to the question at hand … will LTL consolidation work for your company? Let’s take a look to find out.
There are several factors that will determine whether or not LTL consolidation will be the right fit for your company, including your budget and how fast you need your shipment to get to its destination. The first thing you need to look into is how many individual shipments you have. If you are sending multiple shipments, to multiple locations, LTL shipping may be your best option.
The companies that will benefit most from LTL consolidation are those who have consistent shipments of partial loads. These companies will see significant savings by consolidating their shipments into single loads that fill the truck — especially those shipments that have rigid delivery schedules.
Since LTL consolidation offers a safer option, it will be best for any shipments that contain high-value or fragile products. Less loading and offloading means these sensitive shipments will be less at risk for damage. LTL consolidation offers quicker pickup times, is less expensive for companies with smaller shipments, and is much more efficient for those shipments that are going a shorter distance.
Potential challenges of LTL consolidation
There are several instances when traditional shipping might make more sense for your company, such as single shipments or those that have irregular schedules, meaning the delivery schedule is less important and the shipment isn’t urgently needed at its destination point. Traditional shipping may also be better suited for smaller, denser shipments as well as those that have no special requirements.
But for those considering LTL consolidation because of the potential savings, there are some possible challenges to making the process work that you will have to consider.
First, you can expect to spend more time in the initial planning phase of shipping. LTL consolidation will take longer to plan and organize because you need to factor in things like pricing, timing, dimensions, and other specifications to make sure that you are saving money and meeting the demands of your schedule. It isn’t too technical, and once you get the hang of it the process will be rather easy, but it is an adjustment at first to learn how to consolidate your shipments.
Another possible snag in the process could be finding the right carrier. Not all shipping carriers offer LTL consolidation, so you will first have to find one who does, and will definitely want a carrier with plenty of experience with the entire process, which will help make your transition to LTL consolidation more smoothly. A partner like Flock Freight® will work with you to come up with the most cost-effective option to move your freight.
Overall, LTL consolidation can be a great option for your company, but only if you consolidate effectively, otherwise it will just become a burden, and could be rather costly. If you don’t consolidate properly, you will be paying for the empty space in your trailers. But if you maximize the space and fill it with product, you will be optimizing your shipping load, and also be sending trucks out on fewer trips, making consolidation a great benefit to your company.
How to maximize the efficiency of your LTL consolidation
So how can you maximize the LTL consolidation process to make it work for your company? Given all we’ve covered, it should sound rather simple, and it is, and that is how it should be, but it will take some time to organize your system with your logistics partner to make it so. Here are a couple things you can do to help optimize the process.
Organize your warehouse
Since the LTL consolidation process begins at your own facility, you need to make sure your warehouse is properly equipped to handle your consolidated shipments. Consolidation will require specific organization to ensure that your product doesn’t get sent to the wrong region, or wrong retailer, at the wrong time.
You’ll want to put a system in place that helps make sure none of those issues ever happen, or at least won’t be because you packed your shipment incorrectly. This begins with a warehouse tracking system that helps you locate your product without having to manually search through piles of boxes.
This will allow you to consolidate your stock more quickly before it needs to be loaded onto the truck for shipment. You may be able to do this on your own, while other companies may turn to a warehousing partner to lend their expertise running a facility and tracking products. Companies with little or no experience with LTL shipping may have better results using this option.
Update your transportation management & tracking systems
Another way to get your facility up-to-date is to invest in new technology, including transportation management and tracking systems. These are vital to consolidation, as they will help you create and implement more cost-effective and efficient load plans. Again here, a logistics partner can help you set up and run your system.
Through your system, you will plan your ideal routes, including where your shipments will be sent for consolidation. Once you master your routing you will get better at filling trucks to capacity, and in that way, use fewer trucks. By utilizing these strategies, your shipping costs should drop precipitously.
Is LTL consolidation a good option for my company?
While LTL consolidation represents great potential for savings to many companies, it just won’t work for others, whether that be because of shipping volume or scheduling needs. Read through the guide we’ve provided above and create a checklist to see where your needs match up with what LTL consolidation provides.
You can also speak with an LTL shipping partner like Flock Freight to see if consolidation will be a good option for your company’s needs. Flock Freight will use their unique LTL shipping model to optimize your shipping, offering the lowest prices, exceptional service, and superior technology.
Flock Freight uses sophisticated algorithms to keep the shipping process cheap and simple for you, and making the process as efficient and painless as possible. You can get a free quote from Flock Freight today, regardless of your shipping volume or company size. Flock Freight will work with you to make sure your shipment gets to its destination safely, and on time, every time.