In logistics, consolidated shipping is a method of combining several orders into a single shipment. Shippers may save as much money as possible by using this freight consolidation technique. Other names for consolidated shipping include consolidated freight, consolidated orders, and cargo consolidation.
A logistics process known as freight consolidation combines many separate orders into a single load to create a bigger transportation unit and prevent divided shipments. Businesses can reduce expenses associated with product distribution and optimize cargo space because of this logistics method.
Shipments that have the same destination or distribution route are combined in the cargo consolidation process to save transportation costs and use a single truck, plane, or container for consolidation by land, sea, and air, respectively.
Orders from many suppliers that pool space to save expenses can also be included in freight consolidation, as can shipments from a single business based on its distribution, procurement, or manufacturing plant.
Phases of freight consolidation
Freight consolidation at distribution centers (DCs) satisfies the objective of reducing storage and transportation expenses simultaneously. Consolidation stations can be positioned throughout the center, generally adjacent to the storage and order processing sections, depending on the architecture of the warehouse layout and the sequence in which the activities are carried out there. In general, there are five steps to freight consolidation:
1. Goods receipt: Operators receive goods and order dispatch documents from one or more suppliers.
2. Product storage: Until there is sufficient inventory to combine the load and transport the item, the products are kept in storage.
3. Stock management: Among other things, the items need to be packed and weighed to make distribution easier.
4. Grouping in a single order: During this stage of consolidation, workers collect all the items that are going to the same place and combine them into a single order. Additionally, they prepare the paperwork required to avoid administrative mistakes throughout this process.
5. Consolidated order shipment: After the orders are combined into a single shipping unit, the products are put on a truck and delivered to the destination.
Advantages of freight consolidation as well as its hazards
A logistics process called freight consolidation encourages the efficient use of resources while shipping and dispatching products to distribution centers or other logistics facilities. Among its benefits are:
Reduced freight charges
Full truckloads reduce the shipping transportation cost reduction order since the suppliers split the shipping cost equally. For e-commerce businesses to be competitive, they must provide quick, affordable delivery, therefore this advantage is critical.
Increased security for products
When cargo is properly consolidated, there is less chance of product handling and transportation accidents causing damage. This is a result of grouping different smaller loads into bigger pieces.
Effective loading dock supervision.
By reducing the number of vehicles rotating in the warehouse yard, goods grouping helps to relieve traffic congestion and delays in this part of the building.
Decreased effect on the environment.
By maximizing the usage of vehicles, freight consolidation reduces the number of vehicles on the road and minimizes partial truck loads.
However, there are some dangers associated with the supply chain’s adoption of a freight consolidation and deconsolidation phase. Product shipments may be delayed by any delays in the consolidation (or deconsolidation) process, which would impair the end customer’s logistics service. Furthermore, effective communication between the carriers, logistics service providers, and businesses involved in this activity is essential to the freight consolidation process. It cannot function well until a planning procedure is established.
A crucial step in a company’s logistics process is freight consolidation, which lowers supply chain efficiency and sustainable logistics, therefore minimizing the environmental effect of the enterprise. Logistics companies usually use freight consolidation to enable integrated shipments, which may originate from one or more suppliers. The manufacturing, procurement, and distribution strategies of each business determine how this logistical process is carried out.
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