Freight carriers are always looking for new methods to maximize their freight loads. They make sure truckloads are as full as possible to get as much out of each trailer—for efficiency and income.
Some shipping carriers now offer consolidated shipping which is often cheap, cost effective, and a great option for brands shipping palletized freight.
For ecommerce companies, understanding how consolidated freight shipping works can help you better understand how to maximize your shipping service and minimize your overall freight spend.
Understanding LTL Freight Shipping
To understand consolidated shipping, it’s important to first understand LTL shipping. LTL, or less-than-truckload, is a general term for when more than one shipper’s products take up the space in a trailer. Traditionally most freight companies only did FTL shipping, which stands for full-truckload. FTL means a shipper pays for the entire space in the truck whether they are using the entire space or not. With the rise of ecommerce businesses and smaller shippers, LTL freight has become a more cost-effective way to transport products.
With LTL shipping the merchant is only paying for (and using) the amount of truck space that they need and nothing more.
Now LTL freight shipping has diverged into a few different methods, the most traditional (and most common) is called Hub and Spoke LTL. For traditional hub and spoke LTL, freight is usually gathered at one warehouse where the shipments are prepared but transferred to another warehouse to be combined with other freight. This process continues over and over until the shipment reaches its final destination.
Hub and spoke LTL is ideal for freight that needs to go a shorter distance (less handling), and products that are less expensive (less liability if damaged or lost), and generally smaller in size (more efficient for combining with other shipments.
What is Consolidated Shipping?
Consolidated shipping is another type of LTL freight shipping. It means multiple LTL items are combined into a single container shipment.
Instead of moving the shipment from warehouse to warehouse, during the process of consolidation, LTL shipments are moved to a single location, combined, and remain on the same truck until they reach their destination.
Benefits of Consolidated Shipments
There are many benefits of consolidated LTL shipments for ecommerce brands, here are the top ones:
Cost-efficiency
LTL shipping is a more cost-effective way to move products because you only pay for the space on a trailer that you are using. With consolidating shipping you’ll be splitting the cost but getting the same travel time as you would with FTL.
Less handling and less damage
With LTL there can be a lot of loading, unloading, and moving in and out of various warehouses. Consolidated shipping takes some of that out, which reduces the risk of damage and naturally reduces the need for claims. Of course, with any LTL shipping there is more risk of damage than with FTL.
Simpler pricing
Without moving from truck to truck, pricing becomes much more straightforward. Shippers pay for only the square footage they use on the trailer. With one single trailer, it’s easy to calculate.
Improved quality assurance
By shipping in smaller increments, you’ll have much more control of your inventory flow. This is very important for smaller brands who may not have the capacity to store, process, or ship large volumes of products at once. You’ll also be able to implement more rigorous quality control before shipments leave your warehouse, and once they arrive at their destination. With less products to process, there can be more hands-on testing and quality assurance checks.
Disadvantages of Consolidated Shipping
With any LTL shipping, the timeline of when your products are delivered is out of your hands. Because there are now multiple destinations that one trailer needs to get to, yours may be delivered first but it may be last. You cannot know the exact delivery times once your shipment leaves the loading dock.
Consolidated shipping can require a lot more coordination and planning. The administrative load is more than many smaller businesses can handle. Even for bigger businesses, consolidated shipping can be more challenging with larger shipments because they may require more logistical accuracy.
Not all shipping carriers offer consolidated freight shiping. If the carrier you’re currently working with doesn’t offer this service, it may not be worth switching carriers just for this.
Bottom Line
While consolidated shipping has many upsides, it can be time consuming to plan. Plus, the time and resources (labor, equipment, space, etc.) to consolidate and re-distribute products can also be time consuming. Be sure you’ve vetted the process with your carrier and fulfillment provider. You want to make sure all partners can help support a new type of freight shipment if you choose it.
If you are seeking a fulfillment provider with expert transportation and shipping support, reach out to DCL Logistics for a quote. We have a number of transportation management services that can help your brand grow and scale.
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