Regarding global freight forwarding, the question is, “How can we lower shipping costs for shippers?” There are several ways to do so; however, consolidated shipping is definitely a practical solution that allows shippers to have their small shipments transported efficiently at a lower price. They don’t need to order a full container load or wait days to have their cargo aggregated for an FCL shipment. To help clarify consolidated shipping and its importance in the freight industry, we’ve provided you with an overview of its definition, origin, and key benefits and challenges for shippers.
Consolidated Shipping: Definition
A consolidated shipment is created when many LCL or LTL shipments from different shippers are combined into one full container/truck load shipment. In other words, consolidated shipping is bundling multiple small shipments into a single larger one. This can happen in several ways but typically involves using a freight broker to find other companies with shipments headed in the same direction. This allows smaller companies to access larger companies’ cost savings and network advantages while reducing the number of shipments made overall.
If you only need to package and transport a few pallets of freight or other smaller shipments, consolidation shipping is the best option. Shippers may frequently combine multiple shipments that come from different suppliers and locations to avoid paying a higher cost. By saving time and money, consolidated shipping enables shippers to obtain preferred shipping rates and contributes to the logistical optimization of the supply chain.
How It Originated
In the early days of maritime shipping, each shipper was responsible for loading, unloading, and securing their cargo on board a vessel. This was a time-consuming and often dangerous process, as workers had to scramble over the exposed cargo holds, often in bad weather. In the late 18th century, a new type of shipping emerged: consolidated shipping.
In this system, a single shipper would take responsibility for all the cargo on board a vessel and would be responsible for loading and unloading it. This made shipping much more efficient and allowed cargo vessels to carry larger loads of freight.
Today, consolidated shipping is the norm in maritime shipping, and it has transformed the shipping industry. Thanks to consolidated shipping, vessels can carry vast amounts of cargo, and shippers can rely on a single company to take care of all their shipping needs. This has made shipping more efficient and reliable and has allowed the shipping industry to grow and thrive.
Benefits of Consolidated Shipping
Consolidated shipping has several benefits, both for the companies involved and the environment.
- Cost-Efficiency: For companies, the main benefit is cost savings. Frequently, shippers will only utilize half or two-thirds of a trailer but will still be required to pay for the whole space. Consolidation services combine many Less-Than-Truckload (LTL) shipments going in the same general direction into a full truckload, and you simply pay for the amount of space your freight occupies.
- Improved Customer Service: Consolidated shipping can help to improve your customer service by reducing the number of tracking numbers and customer service calls. When you ship items separately, each shipment requires its tracking number. This can be confusing for customers, and it can also lead to more customer service calls. However, when consolidating your shipments, you’ll only need to provide one tracking number to your customers. This can simplify the shipping process and reduce the number of customer service calls.
- More Sustainability: From an environmental standpoint, consolidated shipping can also have a positive impact. Fewer shipments overall mean fewer trucks on the road, reducing emissions and less congestion. In addition, consolidating shipments can also lead to more efficient use of resources, as multiple shipments can be shipped using the same cargo packaging and materials.
- Increased Safety and Security: One of the critical benefits of consolidated shipping is the reduced chance of damages. When shipments are consolidated, they are typically packed together in a way that protects the individual items from damage. This is in contrast to when shipments are sent individually, where each item is more likely to be damaged in transit. In addition, consolidation typically results in fewer overall shipments, which reduces the chances that something will get lost in transit.
- Enhanced Quality Control: Consolidation allows you to gain possession of your goods earlier. You would typically have to wait for the supplier to send a replacement if quality control alerts you to an issue with your shipment after it has already been dispatched. This would indicate that you are no longer in control of when the goods will be delivered. Consolidation makes it possible to undertake quality control checks as soon as the product enters the warehouse, which lowers the likelihood that you will lose time and control because of unanticipated issues with your order.
Challenges of Consolidated Shipping
Although consolidated shipping has many key benefits for shipping companies and customers, it has risks and challenges, too. Here are the most common challenges you may face when consolidating shipments:
- Finding a Suitable Carrier: Not all carriers are willing to transport consolidated shipments due to the additional difficulty and complexity of consolidation. Even if you successfully locate a shipper who is ready and able to ship consolidated freights, ensure you are familiar with this shipper and that you are being charged fairly. When choosing the best carrier, working with a digital freight forwarding company can help you receive a fair price and access the carrier network.
- Organization and Planning: One of the challenges of consolidated shipping is that it can take more time to organize and plan. This is because you need to know all the shipments’ details, such as the cost, size, and scheduling.
- Time Waste: Consolidated shipping is generally time-consuming. Compared to FTL shipping methods, it can often take a longer time to consolidate and deconsolidate shipments. This can be a big challenge, especially for businesses that need to ship items quickly. There are a few ways to speed up the process, but it is often still a slow and time-consuming.
Overall, consolidated shipping has many benefits, but it also has some challenges that must be considered. The key is to weigh the benefits and challenges and decide if consolidated shipping is right for your business. It’s essential to fully comprehend how consolidation functions before determining whether it’s the best option for your company. Utilizing a reputable consolidator with proven competence is one of the best practices for consolidated shipping.
If you need further information about consolidated shipping and are wondering how to choose a reliable shipping company for your shipment, don’t hesitate to contact us today. We have a wide range of solutions to ensure your shipments arrive at their destination safe and sound.
What is consolidated shipping?
Consolidated shipping is the bundling of multiple small shipments into a single larger one. This can happen in several ways but typically involves using a freight broker to find other companies with shipments headed in the same direction.
How did consolidated shipping originate?
In the early days of maritime shipping, each shipper was responsible for loading, unloading, and securing their own cargo on board a vessel. This was a time-consuming and often dangerous process. In the late 18th century, a new type of shipping emerged: consolidated shipping. In this system, a single shipper would take responsibility for all the cargo on board a vessel and would be responsible for loading and unloading it.
What are the benefits of consolidated shipping?
There are several benefits to consolidated shipping, both for the companies involved and for the environment. These include cost efficiency, improved customer service, more sustainability, increased safety and security, and enhanced quality control.
What are the challenges of consolidated shipping?
Although consolidated shipping has many key benefits, it has its risks and challenges, too. The most common challenges include finding a suitable carrier, organization and planning, and time waste.
Does DFreight provide consolidated shipping?
Yes, DFreight offers consolidated shipping for LCL and LTL shipments. We have a wide range of solutions to ensure your shipments arrive at their destination safely at an affordable cost.