When choosing less-than-truckload (LTL) shipping mode, you think about saving freight costs. There are many options to make LTL more cost-efficient, but one of the most effective ways is freight consolidation. The higher the shipment volume, the lower the cost per shipment. Retailers and shippers use this strategy to combine or consolidate smaller volumes of freight into bigger ones to reduce freight costs.
What Is LTL freight consolidation?
LTL freight consolidation is a shipping strategy when shippers combine multiple LTL shipments within a certain geographical area into truckload shipments. When shipped to the next point, shipments are returned to LTL and transported to their ultimate destination. The core of this strategy is transforming your LTL shipment into a truckload for the majority of the transit and then managing the last mile as LTL.
What are the main benefits of LTL freight consolidation?
Reduced costs
The known benefit of LTL consolidation is simple pricing. Generally, truckload pricing is easier than LTL, so consolidating reduces the burden of determining shipment prices. Also, for shippers who ship higher-class freight, consolidating it can be highly cost-efficient since the strategy can save from 10 to 50 percent in freight costs. Because of fewer stops, it can also be slightly cheaper than standard LTL.
Faster transit, improved visibility
Due to fewer stops and a more consistent route, consolidated LTL arrives faster than regular LTL shipments. The consolidated freight strategy also gives you better visibility into the transportation process since there’s a large volume of goods to monitor. Fewer touchpoints mean faster delivery times and increased shipment safety because there is less freight handling.
Sustainability
More and more companies demonstrate their awareness of the global environmental issue. LTL freight consolidation is an excellent way to reduce carbon footprint and eliminate road congestion. Instead of many separate trucks going to the same destination, your freight consolidates into one. It means better speed, less fuel consumed, and less environmental damage. Generally, LTL consolidation can be a working solution for shippers. It’s not better than standard LTL, but shippers can save costs and time with consolidation in cases like high-class LTL and long-distance shipments.
Better connectivity
Generally, utilizing a retail consolidation program improves connectivity and visibility throughout the supply chain. More transparent and integrated communication between vendors, suppliers, shippers, and consignees can cooperate more efficiently and improve supply chain performance. This also reduces stock and inventory issues and eliminates delayed deliveries as well.
More Environmentally Friendly
In addition to its other benefits, outbound consolidation is more environmentally friendly than more traditional LTL services. When consolidating, there are fewer trucks on the road resulting in fewer pollutants in the air. Consolidation also cuts down congestion on your loading docks. With fewer trucks, the unloading process takes less time, limiting how long trucks are idling.
Higher Service Level
Ultimately, all of the above benefits result in a higher service level at a lower price. Consolidation simplifies the process, making it easier to execute.
Less Loss and Theft
With effective consolidation, fewer people are handling product, resulting in a smaller chance of loss or theft. Without consolidation, an LTL shipment involves multiple trucks throughout its journey. Each time someone handles the freight, the chances of damage or theft increase. There is also a chance that pallets get separated, causing major logistical issues.