Why worry about hundreds of tracking numbers and clear customs multiple times when you can clear it once with consolidated shipping? With multiple shipments consolidated into one consignment, the shipping process is faster. Faster delivery means a better bottom line with quicker inventory turns, optimal order-to-payment times, and enhanced cash flow. Keep reading to learn how consolidated freight shipping could transform your domestic and international shipments.
Consolidated Meaning | What Is Consolidated Freight Shipping?
To consolidate means to combine separate parts into a unified whole. In terms of shipping logistics, consolidated freight shipping involves combining multiple smaller shipments going to the same destination into one larger shipment for cost savings and convenience. One company can combine shipments from multiple suppliers, or numerous smaller companies can combine different shipments.
Is Consolidated Shipping Cheaper?
Yes, consolidated shipping can be a cheaper logistics option. Per-unit shipping costs typically decrease as the volume increases, meaning a larger, consolidated shipment will be more cost-effective than multiple smaller shipments.
What Are The Benefits of Consolidated Freight Shipping?
Cost Savings
Since consolidated shipping combines multiple shipments into one, shippers can cut costs by increasing the shipment volume, splitting transportation costs with others, and potentially qualifying for bulk shipment rates.
Individual companies consolidating shipments from multiple suppliers can more easily qualify for full truckload (FTL) pricing. Smaller businesses sharing containers can reduce empty space costs while ensuring they only pay for the space that their shipment uses.
Supply Chain Efficiency
Consolidated shipping enhances supply chain efficiency by reducing transportation costs, minimizing the number of shipments, and optimizing delivery times. Consolidated goods even make short-haul movements like drayage more efficient.
Tracking your goods is also simplified with the convenience of one shipment tracking number for a consolidated shipment containing goods from multiple suppliers.
In addition, larger shipments boost economies of scale. The discounted rates, flexibility, and scalability potential can all contribute to business growth.
Happier Customers
Consolidated shipping can improve your customers’ experience in many ways. First, it can streamline customs clearance by simplifying customs documents.
Next, consolidated shipments typically require less handling during transportation, making it less likely for goods to get lost and damaged. Since combined shipments have optimized logistics routes plus fewer stops and touchpoints, their delivery time will be more streamlined.
Consolidated shipping can significantly improve a business’s customer service by reducing the risk of delays, enhancing reliability and predictability, and enabling fast delivery times for even the smallest eCommerce shipments.
Green Logistics
When shipments are consolidated, fewer modes of transportation are required, and less fuel is used. Consolidated shipping will help you save on per-mile shipping costs while lowering your carbon footprint to achieve your sustainability goals.
Challenges of Consolidated Shipping
While consolidated freight offers cost savings and efficiency, it can have some complications.
Businesses must ensure shipment compatibility, as different goods may have varying requirements, such as temperature control or hazardous material regulations. Coordinating multiple shipments and shippers can be difficult, and miscommunication can cause delays.
Consolidated shipping can also mean limited scheduling flexibility for individual shipments. Despite these obstacles, businesses can succeed with shipping consolidation through careful planning, tracking technology, and strong communication with logistics partners. An Importer of Record or Exporter of Record with compliance expertise, like TecEx, can ensure seamless shipping consolidation for your business.
What Are The Types of Consolidated Freight Shipping?
Across land, sea, and air are a range of consolidated shipping options to fit your shipment needs.
Less-Than-Truckload LTL Consolidation
An LTL shipment is ideal for domestic hauls, where shipments from multiple shippers are combined into one full truckload. It is a cost-effective solution for smaller businesses.
Full Truckload FTL Consolidation
For domestic hauls, an FTL shipment combines multiple shipments from one shipper with many goods into one full truckload. Streamlines delivery times and maximizes truck space utilization to save costs.
Container Consolidation
Typically for air or sea freight for international shipments, container consolidation combines several less-than-container loads (LCL) into one container to create a full-container-load (FCL). This reduces the overall cost of shipping and customs processes.
Hub and Spoke Consolidation
Ideal for retailers, shipments are transported to a central destination (the hub) to be consolidated before being distributed to multiple destinations (the spokes). Using a central hub can improve a business’s supply chain by reducing the resources required to transport goods.
Multi-Vendor Consolidation
Multi-vendor consolidation allows businesses to combine shipments from different suppliers into one load. Companies can easily manage inventory from multiple suppliers while lowering inbound shipping costs.
What Is An Example Of Consolidated Shipping?
An Icelandic cloud service provider is updating its data center equipment to offer users new AI capabilities. It must import new servers, networking equipment, and storage devices from multiple European OEMs to ensure it combines the best gear.
The OEMs ship their goods to a central hub in the Netherlands, and the hardware is consolidated into a single container. Their IOR fulfills the compliance requirements for the tech goods and prepares the customs documents for a seamless shipment.
The consolidated goods are sent to a port via a drayage movement and then loaded onto a cargo ship. The IOR facilitates smooth entry at Keflavík port in Iceland. The equipment is transported to a deconsolidation hub using another drayage movement. The load is sorted into smaller shipments, ready for last-mile delivery to the data centers.
FAQs
What does it mean if a shipment has been consolidated?
Freight shipping consolidation refers to combining multiple smaller shipments into one larger shipment. This optimizes space and reduces shipping costs. Grouping goods from different suppliers or shippers can lower the overall freight expense and optimize the transportation of goods.
How can shipping consolidation benefit your business?
Consolidated freight shipping can significantly lower transportation costs by dividing the costs across multiple shipments. It reduces handling and transit times, increases shipment tracking efficiency, and can improve customer satisfaction.