Freight consolidation: what is it, and what advantages does it provide for business?

In terms of modern logistic processes, freight consolidation virtually comes down to bundling various cargoes into a larger shipment. This allows for reduction of logistical costs due to optimal utilization of usable space in transport.

Types of package freight consolidation

Classic example of consolidated (package) freight: transport company accepts and executes cargoes at the terminal. After that, orders are distributed and shipped as a single shipment to the recipient’s location.

There are other possible options of freight consolidation: in the format of cross docking (goods are not stored in a consolidation warehouse), or with warehousing of goods in a short-term warehouse.

Uninterrupted operation of a warehouse is provided by means of automated points-of-use storage (POUS), which allows for obtaining reliable and up-to-date information about the volume of any goods batch, its location in the warehouse and storage period within the shortest time possible. 

Special aspects of consolidated freight transportation

  • Consolidated freights are formed either by ownership (if the cargo is shipped to a single recipient from several suppliers), or by destination address (if there is the same destination point for various cargoes).
  • If the route of a consolidated freight passes through intermediate stops, then the unloading priority is taken into account. In such a way, time and finance expenditures for freight handling are reduced.
  • Freight forwarders continuously monitor the movement of consolidated freights. Failure to do so would result in possible extra mileage of motor transport and overtime work of freight handlers. Besides, possible mistakes can lead to dissatisfaction of customers and loss of goodwill.

Consolidation of package freights: advantages for various businesses

  • Small companies use consolidated freights in order to reduce transportation expenses. In such a way, it is possible to reduce transportation costs by several times.
  • For Internet-based retailers, consolidation of goods batches and use of pickup points of logistics companies provide the possibility to offer additional pickup points to their customers.
  • Companies importing goods from abroad (e.g. from Europe or China) also enjoy significant cost savings due to consolidation, especially in case of multimodal transportation.

Three main advantages of package freight transportation

Freight consolidation is a proven and reliable method to reduce logistical costs for small and medium businesses.

  • share of transport expenses in the final cost of an item is less;
  • maximum use of the useful capacity of the transport;
  • reduction of dead mileage of the transport.

BaltFreight company focuses on shipping of consolidated freights in Baltic states. In order to get a personal offer, contact our representative in any way convenient for you.

04-02-2020

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