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How Consolidated Shipping Helps Improve Supply Chains

Posted by Scott Tharnish on February 21, 2018 - 8:04 AM
Consolidated freight process from pickup to distribution

Why shippers should consider consolidating freight

Consumer buying behavior has changed. As the convenience of ordering products online continues to increase, expectations for faster deliveries increase, too. Customers are no longer willing to wait weeks to receive deliveries or pay high shipping fees. Instead, the growth of e-commerce has led to customers asking for same-day and next-day delivery at the lowest possible rate. So, how can shippers keep up with this frenzy of ordering and ever-increasing demand, all while keeping customers happy? By consolidating shipments. 

Logistics leaders and industry experts are using freight consolidation solutions to increase supply chain efficiency and improve speed-to-market in fulfilling orders. Whether you’re a business with multiple shipments or your freight doesn’t fill an entire truck, consolidation can be an effective strategy to complete deliveries quickly and cost effectively. Learn more about what consolidated shipping is and how you can benefit. 

What is freight consolidation?

Freight consolidation is combining shipments headed in the same direction onto a single trailer that’s going directly from point A to point B. Using fewer trucks to transport freight is ideal for retailers with small, frequent shipments and means less product handling, which decreases the opportunity for damage and claims.

Depending on the customer’s needs, consolidation can be the transportation of one or multiple shipper’s products. For example, let’s say one shipper from Los Angeles, California, has multiple shipments of athletic apparel going to a variety of retailers in Dallas, Texas. Before sending it to their Dallas distribution center, they wait until they have a full truckload of freight. Once the truck is full, it goes directly to Dallas for delivery.

But, what if a shipper doesn’t have enough packages to fill an entire truckload but still wants to consolidate their freight? Using the same example, let’s add an additional shipper. So, now we have two suppliers located in Los Angeles who are sending athletic apparel to retailers in Dallas. Each supplier only has enough freight to fill up half a trailer. While these products could be shipped separately, combining them is more efficient.

Both examples depict what freight consolidation is depending on a shipper’s needs. Either way, by filling an entire trailer from floor to ceiling, rather than transporting multiple half-filled trailers, carriers help shippers create a more streamlined and cost-efficient supply chain. When executed properly, the bundling of goods presents many benefits to both the shipper and the consumer.

Benefits of freight consolidation

In its early days, freight consolidation was something carriers did to combine smaller shipments with the goal of saving time and money. And while the concept hasn’t changed, it’s gaining more and more attention because of evolving buying patterns and consumer delivery expectations caused by e-commerce. Retailers are always seeking cost-efficient and innovative ways to ship their products. As freight consolidation becomes more widely used, industry experts are providing in-depth and creative strategies that are customized to a shipper’s (and their customers’) specific needs. Depending on schedule, volume and hold time, consolidation can help shippers:

Reduce costs
Typically, with freight shipping, as volume increases, costs per unit go down. Considering this, you can see how combining shipments for a higher total volume is beneficial — lowering overall transportation costs. Implementing an effective consolidation program also decreases costs by eliminating wasted trailer space, which is helpful to both smaller businesses lacking enough goods to fill one trailer and bigger businesses needing to ship numerous packages all over the country. The end client also benefits by not having to pay higher shipping fees.

Increase supply chain consistency
Do you have repetitive orders and strict deadlines to meet each week, but not enough merchandise to fill a trailer? Increase your supply chain’s consistency by incorporating these regular shipments into your consolidation plan. By identifying patterns, common pool points and reoccurring orders, you can enhance optimization by knowing which orders are coming in each day, as well as which ones are ready for pick up. With a more visible supply chain, you’re better able to meet each customer’s deadline and run a smooth production schedule.

Minimize harmful diesel emissions
Did you know diesel emissions are one of the largest contributors to environmental pollution problems worldwide? While federal regulations, and initiatives like the Environmental Protection Agency (EPA) SmartWay program, are helping reduce the number of diesel emissions being released into the atmosphere, freight consolidation can also help. Fewer trucks on the road means fewer emissions affecting the environment.  

Use ArcBest services for freight consolidation

When shipping freight with ArcBest®, we’ll find a way to create the greatest efficiency for your shipment’s journey. Through analytics, we use customer data to determine the best method for delivering freight proficiently and reliably, with the least amount of handling as possible. Then, we’ll either combine the goods at your dock, at a nearby off-site facility, or at one of our nationwide service centers prior to transit. Once they reach their destination, we’ll break it down into its original form and send it out for local delivery. It’s a seamless method that alters depending on each customer’s needs. For more information on how ArcBest can provide you with consolidated shipping solutions, call 800-610-5544 or leave a comment below.