Freight consolidation services are in the business of getting goods moved at a pace that is quick and efficient. Finding practical and cost-effective shipping solutions has many turning to consolidation services. Businesses come to a standstill if freight stops moving. With solutions that routinely keep goods on shelves and carriers you can depend on, we have what you’re looking for.
The US Federal Motor Carrier Safety Administration (FMCSA) supports freight consolidation because it reduces the numbers of vehicles on the road. Fewer vehicles mean less congestion, which means using consolidation services contributes to a faster flow of goods. With these services, shippers can combine multiple loads into one.
Find out more about consolidated freight shipping and how to keep your goods moving steadily without breaking your budget.
What is Freight Consolidation?
Freight consolidation is an ingenious logistics strategy designed to revolutionize the way businesses manage their shipping needs. It’s the concept of combining smaller shipments from multiple clients into one consolidated shipment.
In a world where businesses are constantly seeking ways to improve their logistics operations, freight consolidation is becoming more popular.
Clients benefit from a process that is:
- Strategic
- Cost-effective
- Efficient
- Secure
By entrusting your shipping needs to a reputable freight consolidation service, you can confidently focus on growing your business instead of stressing over shipping costs.
Check out our article on consolidated freight costs to discover how much you’ll have to pay for this service.
What Do Freight Consolidation Services Provide?
Freight consolidation services are geared towards finding solutions to keep freight moving. In our current times, this is easier said than done. Rising fuel costs and production delays, among others, have made shipping a significant expense for some businesses.
Freight consolidation services expertly collect and combine smaller shipments destined for the same geographical region, creating a single, larger shipment that’s more economical and easier to manage. In many cases, the freight of more than one business can ship at once.
This method ends up being more cost-effective for many reasons:
- Most efficient use of cargo space
- Fewer touchpoints and handovers
- Reduced fuel and driver fees
Fuel costs, for example, are the same for a trip from Los Angeles to Memphis whether a trailer has skids from one company or ten. By sharing the space, each company now pays only a portion of the fuel and driver fees, rather than the whole amount.
Another aspect of the service is helping companies combine small parcel shipments into one larger one that could qualify as freight within an LTL carrier service. This might be the case if your goods aren’t very large. For example, personal electronics such as headphones or phone cases might come in initially as parcel packages.
A single consolidated LTL shipment may provide more cost savings than frequent, smaller shipments. It will depend on when the goods are coming in and how much the warehouse fees would be in the meantime.
You can get a better idea of how freight consolidation can help your business by speaking with a warehousing or 3PL service.
Consolidated Freight Shipping: The Process Explained
A variety of shipping avenues means there are a variety of freight consolidation solutions too. The process itself seems a bit complicated at first, but the growing popularity means that more carriers and warehouses are investing in it. Even small, emerging businesses can benefit from freight consolidation.
There are three basic steps to the process:
- Collection and consolidation
- Transportation and tracking
- Final delivery
We’ll walk you through the stages of the process, showing you how it not only saves time but also simplifies the shipping experience.
1. Collection and Consolidation
For the first step, freight consolidation companies pick up your goods and bring them to their warehouse. You can also have goods delivered directly to a consolidation warehouse. They sort and organize shipments based on their final destinations, combining smaller packages into one larger shipment.
These larger shipments are placed on a truck. When it’s only one company, they will use a full truckload service (FTL). If packages are from multiple companies, Less-Than-Truckload (LTL) services are used. The goal is still to load a truck to the point where an FTL service charge applies.
In many ways, consolidated freight services are a type of LTL shipping designed to offer the greatest benefit for those who need to move smaller shipments non-stop.
When using LTL services for consolidation, there are two options:
- Consolidated LTL
- Hub and Spoke LTL
Both methods combine goods from more than one client in a single trailer for transport. However, hub and spoke LTL will make stops along the route to drop off and pick up more merchandise. Hub and spoke is also more likely to utilize a central location and handle deliveries in the surrounding area within a day. Because of this, shippers may not be eligible for the same cost savings.
Consolidated LTL will process deliveries through a consolidation warehouse. These warehouses will package items so that they can be transported directly to the destination. No stops in between means goods can travel a longer distance faster.
There is also partial truckload shipping (PTL). With PTL, just two companies share space. Freight doesn’t have to go through freight classification or NMFC (National Motor Carrier Freight Classification) number look-ups which reduces costs.
2. Transportation and Tracking
Once the shipments are consolidated, they’re loaded onto the appropriate mode of transportation. Consolidation companies can arrange shipping via truck and rail service. International shipments would need to go through a forwarder who can arrange ocean or air cargo arrangements.
At this stage, you’re provided with tracking information, so you can easily monitor your shipment’s progress. Depending on the distance and products, you may also get help arranging any necessary permits or other travel documents.
Transload Services USA coordinates with transportation providers to ensure the smooth and timely transit of your goods, and can keep you updated every step of the way.
3. Final Delivery
Depending on the shipment type, your good’s final destination can be to one of three locations.
- Brick-and-mortar store
- Distribution center
- Direct to final buyer
The first two options are the most direct. These are for companies selling products directly from a physical store or who keep inventory on hand for a distribution center that handles their fulfillment services.
When the final delivery is directly to a buyer, there may be more steps involved.
- Arrival to a cross docking facility for de-consolidation
- Reprinting labels for individual orders
- Transfer to local carrier company for in-home or small business delivery
Throughout this step, you can continue to track your shipment, ensuring that you’re always informed about its status.
What Types of Consolidation Services Are Offered?
For both FTL and LTL shipments, there are warehouse services specifically offered for consolidation. These services can work for products shipping by truckload, rail, and air carriers.
The most popular warehouse consolidation services are cross docking and transload. Both have been used to ease congested ports and warehouses by helping keep goods on the move. Better yet, the increased need for such services has made them more widely available to businesses of all sizes.
Transload Consolidation Services
Transload services are offered at special facilities that can prep and transfer shipments for continued transport on trucks, railways, planes, even ships and barges. The U.S. is a big place, so different methods of transportation are often used.
As a consolidation service, transload facilities receive shipments of all sizes After sorting and consolidating as required, shipments are then placed on whichever form of transport is needed next.
There are many ways to transload all kinds of products:
- Consolidating a shifted load onto a new pallet
- Transferring bulk liquids from tanker trucks to barrels or rail tankers
- Loading a collection of small shipments into a single dry van
- Truck to truck transfers for local deliveries
Shipments might go from port container to railway or from railway to truckload service. The goal is to find the most efficient method and to keep goods moving.
If deliveries are scheduled for the winter, especially along the northern border or directly into Canada, transloading may help your goods avoid foul weather. There are situations where transport by railway is going to be safer and faster.
Transload facilities can make that happen through sophisticated organization and planning.
Cross Docking Consolidation Services
Warehouses that offer cross docking services follow a similar delivery pattern to transload. Cross docking warehouses operate as central locations that can send out shipments to surrounding areas via LTL or FTL shipping.
Facilities can unload loose boxes for sorting and palletizing. The consolidated shipments are then sent to their individual destinations, so shippers avoid the cost of sending one container to various places. Shipments are meant to move in and out of warehouses quickly to keep things moving.
There are instances where cross docking facilities will break down pallets to divide their contents into smaller deliveries. This is the de-consolidation process, but still saves you money in the long run. It keeps your inventory needs low while getting things to customers quickly.
Consolidated Freight Cost Savings
Freight consolidation services provide cost savings by allowing a variety of goods to be transported without the need for a variety of trucks. Without consolidation services, shippers would have to rely solely on FTL shipping which is more expensive and actually increases road congestion.
Consider just the impact on fuel. The average semi-truck with a full load gets six miles to the gallon. Across the country, the average cost of diesel fuel is now $4.50 a gallon, and in places like California, it’s still over $5 a gallon. The trip from Los Angeles to Memphis is 1,800 miles. In fuel alone, that is $1,350 for a one-way drive.
Fuel Calculation
| Distance (miles) | Miles per Gallon | Average Fuel Cost (Diesel) | Total |
|---|---|---|---|
| 1,800 | 6 | $4.50 | $1,350.00 |
That price is assuming the truck can even reach a six miles per gallon average. Traffic, terrain, and weather conditions all play a role in fuel consumption.
If only one company is using the trailer, they bear the full weight of the cost. If that were to be divided among five different companies, the price would go down.
Divided Fuel Costs
| Total Costs | # of Different Shippers | Cost Per Shipper |
|---|---|---|
| $1,350.00 | 5 | $270.00 |
While very simplified, this shows that dividing shipping costs can bring down rates for individual businesses. Other factors, such as tolls, truck maintenance, and driver payment can all be treated the same way.
Consolidated shipping brings down overall logistics spending in other ways too:
- Reduced shipping costs when paying for space in an LTL versus an entire truckload
- Better rates are possible when carriers have dependable volume
- Lowering the risk of damaged goods through fewer touchpoints
Some savings seem small at first, but over time they add up. During tough economic times, money saved is money well-earned.
What are the Advantages of Consolidated Freight?
The advantages of consolidated freight will depend on your shipping needs. It will also be impacted by the type of freight consolidation service you contract with. As companies grow, shipping needs to change. Don’t be afraid to adjust your business practices accordingly.
Across the board, benefits include:
- Cost-effective solutions: As mentioned, LTL consolidated shipping is likely to be less expensive because the costs related to running a truck and trailer can be divided among other shippers.
- Reduced damage: When using consolidated LTL, your merchandise stays together in the trailer until arriving at the set destination. Less handling means less chance of damage.
- Keeps goods moving: Rather than waiting for enough of a shipment to make a full truckload, consolidation services can keep goods moving and on route to customers or distribution centers.
- Sustainability: You’re doing your part to reduce carbon emissions by helping carriers have fewer trucks on the road at a time. It’s both environmentally friendly and relieves traffic congestion for a smoother journey.
Most freight consolidation services are arranged through 3PL warehouses. These advantages and more could be available to you. When 3PLs offer freight consolidation, they often do so through specific consolidation and transload warehousing facilities.
What is a Consolidated Warehouse?
Not all warehouses are capable of consolidating large amounts of single shipments into freight. For 3PLs to offer freight consolidation services, utilizing a consolidation warehouse is a must.
In these consolidation centers, often located near major ports or distribution hubs, package processing is set up to match shipments together. As merchandise comes in, either directly or through transload and drayage services, it gets combined with other packages heading to the same location.
Once palletized, these shipments are sorted and are placed on a truck with others heading to a common destination. The goal is to send out a full truckload shipment that can be priced per mile and weight rather than by individual commodities.
An established 3PL consolidated freight service will have shipments from several businesses coming through. This may increase the chance of multiple shipments heading to a common destination.
What are the Risks of Freight Consolidation?
No freight solution is perfect, and there are challenges to consolidated shipping as well. When choosing a shipping method, always look at both to see how well your business needs align with the services offered.
Some common risks to prepare for when looking into a freight consolidation company include:
- Extended lead times: Needing to wait for enough merchandise to be able to consolidate and then possibly needing to de-consolidate shipments for final delivery may cause delays if not well managed.
- Limited carriers: Not all carriers or 3PL services have the space and customer volume required for consolidation services to work. Combining multiple LTL shipments all heading to the same destination is also more challenging is less populated areas.
- Complex management systems: A consolidation center should have a Transportation Management System (TMS) that can handle the data input. Subpar systems may result in lost freight and longer delays.
If consolidated freight services seem like the right step for your needs, Transload Services USA has proven experience in managing multiple shipments and offering related services.
Freight Consolidation Solutions That Optimize Your Supply Chain
Managed correctly, freight consolidation services can protect your supply chain and reduce inventory shortages. The global supply chain still isn’t back to its pre-pandemic status, so disruptions and delays remain common.
Freight consolidation solutions are long-term strategies designed to keep merchandise moving. Because many work on an automated delivery schedule, companies can get frequent small deliveries and avoid large orders more prone to delays.
Consider these possibilities:
- Less immediate inventory on hand means savings on warehouse storage fees.
- A delay anywhere in the supply chain can only affect a small part of your needed merchandise. There will always be movement for high-frequency shippers that have new imports arriving.
- Keeping goods moving out of busy ports and into consolidation centers will reduce overall congestion in ports and smooth out deliveries over time.
Each of these is able to optimize your overall supply chain in different ways. For the greatest benefit, you also have to consider one of three different consolidation methods.
What are the Three Shipment Consolidation Methods?
Shipment consolidation has become an important part of the logistics industry. However, it can’t be used as a once-size-fits-all process.
To meet the diverse needs of shippers, freight consolidators use three primary methods:
- time-based
- quantity-based
- hybrid (combines both time and quantity).
In this section, we’ll confidently explore each method and provide insights into their unique benefits.
Time-Based Consolidation
Time-based consolidation focuses on the frequency of shipments rather than the quantity of goods. With this method, freight consolidators gather shipments from multiple clients over a predetermined period.
In most cases, clients can request consolidation on a daily, weekly, or bi-weekly schedule depending on the frequency of their incoming shipments.
With this consolidation method, the greatest benefits are:
- A predictable shipping schedule
- Reduced lead times
- Better planning abilities
For businesses that get in frequent shipments, this method is ideal.
Quantity-Based Consolidation
With quantity-based consolidation, the focus in on the volume or number of goods getting shipped. Freight consolidators will gather shipments from clients until a specific quantity or capacity is reached, usually a full truckload.
Major benefits of these methods include:
- Ability to consolidate goods that are bulky or non-standard
- Allows for most efficient use of cargo space
- Generates significant cost savings for heavy items
Businesses that work with items like car parts or ready-built furniture can easily use quantity-based consolidation to save on shipping by filling a full truckload.
Hybrid Consolidation
As the term hybrid implies, this is a combination of time and quantity-based consolidation. This strategy involves setting a specific timeframe and a minimum quantity of goods for consolidation.
The consolidation service gathers shipments until either the predetermined quantity is reached, or the designated timeframe elapses. In short, it gives businesses the best of both world.
This would be a good method for companies with the following concerns:
- Incoming freight of multiple sizes
- Irregular incoming shipping schedules
- Frequent quantity adjustments in orders
In short, this method is for companies that need a flexible and adaptable solution for their freight.
A freight process that helps reduce supply chain delays helps everyone who needs shipping. Creative solutions available from Transload Services USA for today’s shipping industry can benefit you and everyone else needing to meet their business goals.
How to Choose a Freight Consolidation Service
Finding the best consolidated freight companies is the final step in optimizing your shipping processes. Once you’ve examined your own needs and understand the options, it’s time to pick a company.
When picking a freight consolidation services, take the time to check on details such as:
- Available services
- Industry experience
- Customer service reviews
- Appropriate licensing and accreditation
- Networking capabilities
- Customization abilities
- Technology use
- Scalability for growth management
Have clear standards in mind when looking into a company to provide consolidation services. Be sure to request quotes so that you can compare prices as well as the quality of the service.
Remember, consolidated shipping is designed to be more cost-effective either way. Go with the company that can provide you with dependable, quality services you can depend on.
Reliable Transportation Management Systems with Transload Services USA
Don’t miss out on the opportunity to streamline your shipping process with freight consolidation services from Transload Services USA! Our experts specialize in:
- Cross Docking: Seamlessly transfer your goods between transportation modes without the need for extended storage.
- Transload Services: Efficiently move your cargo from one transportation mode to another, reducing handling costs and transit times.
- Freight Rework Solutions: Quickly resolve shipping issues, repackaging, or relabeling to ensure your goods reach their destination on time and in perfect condition.
Transform your logistics operations today and experience the cost-saving benefits of partnering with Transload Services USA. Call us now at (352) 282-4588 to arrange freight consolidation services or complete the form to request a quote now. Don’t wait – take control of your shipping process and watch your business thrive!
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