In today’s fast-paced market, sellers and distributors must often ship their orders more frequently and in smaller quantities to meet customer demand. For the shipper, the lower volumes typically result in a higher cost per unit, which negatively impacts the company’s bottom line. That’s why more shippers are exploring the advantages of freight consolidation as a more cost-effective and efficient alternative.
What Is Freight Consolidation?
Freight consolidation is the process of combining several smaller shipments from multiple companies that are headed to the same area or region into one larger order. The receiver then separates the goods upon arrival at a de-consolidation facility to prepare them for individual delivery, the stage of the journey referred to as the “final mile.”
Why Choose Freight Consolidation?
Here are the top six reasons to implement freight consolidation.
1. Cost Savings
When a company ships less than a full truckload, it must still bear the cost of a full truck. In essence, it is paying to ship empty space. Consolidation enables several companies to share the expense of a fully loaded trailer, which significantly reduces the cost for each shipper. The savings in fuel and equipment use also benefit the entire supply chain.
2. Less Freight Damage
When goods travel on a half-full truck, they sometimes slide around during the journey or get moved more often during frequent stops. Freight consolidation typically results in full, tightly packed trailers, which prevents sliding and jostling. The shipping of goods directly to the de-consolidation warehouse also means there are no stops for unloading along the way. Consequently, there is a lower risk of shipment damage.
3. Fewer Trucks Required
Another pro of freight consolidation is that it requires fewer trucks and trailers to ship orders. In addition to helping alleviate congestion on highways and reduce fuel and vehicle maintenance costs, fewer trucks leads to less crowding at the loading docks. This results in reduced detention time for drivers and not as many late shipments.
4. Enhanced Customer Satisfaction
The ability to combine several orders from multiple suppliers or locations and send them to a centralized warehouse for de-consolidation gives customers more flexibility. They can make smaller, more frequent purchases, which improves the supplier’s cash flow and reduces inventory carrying costs.
5. Increased Supply Chain Consistency
As companies continue with freight consolidation, they tend to detect similar shipping patterns due to repetitive customer orders. Identifying these trends can help streamline and simplify the planning and scheduling process. The result is more consistency throughout the supply chain and improved customer service.
6. Advanced Technology
On the surface, consolidating multiple orders from several shippers sounds complicated. The use of transportation management system (TMS) software simplifies the entire process. This software includes an automated inventory management system that reviews scheduled loads and notifies shippers when consolidation opportunities are available.
At Central Florida Freezer, we’re here to help you explore the many benefits of freight consolidation. Contact us today for additional information about our third-party logistics (3PL) trucking services in Florida.