Freight Consolidation: A Smarter Way to Save Costs and Boost Shipping Efficiency

In the global trade battlefield, shipment operational efficiency is the critical factor that allows a business to operate in foreign markets with the same agility as local competitors. With improved operational efficiency, the shipments can be moved at a lesser cost between two destinations with minimal waste and making deliveries on time. The key strategy to achieve this shipment efficiency is through freight consolidation.

In simple words, Freight Consolidation is the process of transporting multiple shipments in a single container. This could be:

• A single shipper consolidating separate shipments into a single container, or
• Multiple shippers consolidating across a single container

This whole process significantly reduces cost and also contributes to sustainability. This blog is a walk-through into an in-depth understanding of freight consolidation and its effects on shipment efficiency.

UNDERSTANDING THE FREIGHT CONSOLIDATION

With freight consolidation, shippers and freight forwarders can combine smaller shipment volumes in a single container. But, to do that, it is important to understand that the shipped freight belongs to the same product category and is going through the same shipping routes. This operation helps ease freight consolidation and reduces the handling process. Given below are the steps to freight consolidation:

1: Collection

Freight consolidation is managed through shippers who are interested in freight consolidation and have small volume shipments.

2: Sorting and Grouping

All the shipment information is collected and grouped by product category, the shipping routes and the final destination.

3: Consolidation

This step is where the freight is consolidated. All the grouped shipments are loaded into a container, properly stacked and secured to ensure the product isn’t damaged during transit.

4: Transportation of shipment

After the consolidation, the shipments are transported to their final destination. This is done through trucks or carrier vessels, as the case may be.

5: Deconsolidation

Upon arrival at the destination port, the containers are unloaded, deconsolidated, and readied to be transported to their final destinations.

CATEGORIES OF FREIGHT CONSOLIDATION

Origin consolidation

This involves shipments being consolidated at the facility like a factory, inventory management or distribution centre before they are shipped to the final destination. This is often used in international shipping to leverage economies of scale, reduce handling, and simplify tracking.

Destination consolidation

The destination consolidation adds flexibility and minimises the transit time. It is leveraged by the domestic shippers, and the shipment is moved to a central destination (closer to the final destination) before being consolidated as one shipment and then delivered to the final point.

In-transit consolidation

In in-transit consolidation, the shipments are consolidated at multiple transit points and may switch to different modes of transportation. This is done due to the arrival of increased shipments and the dropping of containers at different points, leading to an increase in the handling and management process, causing goods to be exposed to certain dangers.

HOW FREIGHT CONSOLIDATION IMPROVES SHIPMENT EFFICIENCY

Saving on transit times

Freight or shipment consolidation helps in reducing the transit time as it combines smaller shipments from multiple vendors into a consolidated load. This means that the transporter can utilise LTL or LCL shipping and ensure they don’t pay much for handling processes, and eliminate the delay to the destination.

Optimised Routing

With tech solutions, direct routing becomes easier, avoiding unnecessary detours. The direct routes reduces the travel time and fuel consumption and contributes to low carbon emissions. With faster deliveries at reduced cost, it’s a win-win scenario, all while promoting sustainability in supply chain logistics.

For example, a company like 20Cube uses their tech platform to optimise routes, monitor traffic conditions and plan delivery windows to reduce travel time and ensuring shipments reach their destination within their required turnaround time.

ADDED BENEFITS OF FREIGHT CONSOLIDATION BEYOND SHIPMENT EFFICIENCY?

Though shipment benefits are one of the important benefits of freight consolidation, there are still some other advantages that are given below:

Cost economical

The freight consolidation combines the same destination shipments into one large cargo, which allows the shippers and businesses to save money on shipping costs, making it economical.

Minimising handling risks

When there is excessive handling in LTL and LCL shipping, the shipment is exposed to certain damage. But freight consolidation considerably helps in reducing excessive touch points, ensuring better protection for goods.

Environment impact

Shipping consolidation indicates fewer shipments on the roads and sea, which directly reduces carbon emissions and thus the smaller environmental footprint.

CONSOLIDATION STRATEGIES

Freight consolidation is implemented to improve shipment strategies, however, its success depends on how it’s been implemented. Let’s look at some consolidation strategies:

Understanding the requirement for freight consolidation:

• Analyse the shipment data: First, the shipper needs to understand the information on the shipment and then examine and identify consolidation eligibility. The parameters to be taken into consideration are volume, destination, shipping costs and frequency.
• Study customer needs: The freight consolidation should be aligned with the customer’s needs. For example, if customers require a quick movement for their goods, then the consolidation can be afforded; there is no question of forcing the customer to opt for consolidation.
• Evaluate cost-benefit: Thoroughly evaluate the cost-benefit analysis for the customer and the shipment. While the shipper’s goals may align with the consolidation process, it is equally important to consider the benefits the shipper will gain from this approach.

Opting for the right technology

The tech helps in simplifying and streamlining the entire consolidation process. The applications that can help leverage the consolidation process are:

• Distribution Management System (DMS): DMS offers the optimised route map with real-time visibility of shipments to enable customers to track their shipments.
• Warehouse Management System (WMS): It helps manage inventory efficiently – Easily stacking, managing, tracking, retrieving and consolidating without any hassle.

Collaborating with reliable partners

Working with experienced freight partners can ease the consolidation process. 20Cube Logistics with a global presence advanced digital platform enables seamless freight consolidation. Customers can access real-time updates and manage their shipments in real-time.

How 20Cube can help with Freight Consolidation

20Cube simplifies logistics by allowing its customers end-to-end shipment visibility from origin to destination. It is achieved by using the digital capability of 20Cube, which offers multiple features such as track and trace, generating necessary documents and downloading them in multiple formats. With 20Cube, freight consolidation becomes smarter, more efficient, and easier to manage.