As costs to ship freight steadily increase, it is more important than ever to save money wherever you can. One of the most effective ways to save money without sacrificing service is through shipment consolidation.

What Is Shipment Consolidation?

Shipment consolidation happens when a shipper combines multiple smaller shipments together to build one large shipment. This means that instead of sending multiple pallets as individual less-than-truckload (LTL) orders, they are grouped together for a truckload or partial.

When Does Shipment Consolidation Make Sense?

Shipment consolidation does not work for every shipment. Oftentimes, it works best for pallets that are all going to the same general area. It does not make sense to combine pallets that are going to multiple cities that are far away from eachother.

How Consolidation Saves You Money

Consolidated freight can save your business money in a number of ways. These include:

Lower Transportation Costs

Larger shipments often cost less per pound than multiple small shipments. This is because carriers prefer to maximize the space used in their trailer. Empty space is money that the carrier is missing out on.

Reduced Accessorial Charges

Combining freight into larger shipments reduces the overall number of shipments that you are moving. Naturally, this means there are less chances of accessorial charges including overlength, detention, and re-delivery fees.

Improved Carrier Efficiency

Carriers prefer trailers that are as full as possible. This maximizes the utilization of their equipment and reduces wasted space. This efficiency and consistency can lead to more competitive pricing.

Less Administrative Work

Less small shipments means less paperwork, tracking, invoicing, and claims. This frees shipping teams to spend their time on other aspects of the business.

Real-World Examples of Freight Consolidation

Example #1: A Manufacturer Shipping to Multiple Stores

A manufacturer has four pallets going to four stores in the same metropolitan area. Instead of shipping each pallet separately as four LTL shipments, the freight is consolidated into one truckload with multiple delivery stops.

Result: The shipper pays significantly less than the combined cost of four individual shipments while reducing handling and transit touchpoints.

Example #2: Multiple Vendors Shipping to One Distribution Center

A retailer purchases products from several suppliers located in the same region. Instead of each supplier shipping independently, the freight is collected and consolidated at a central point before moving to the retailer’s distribution center.

Result: The retailer benefits from lower freight costs, fewer deliveries to manage, and improved inventory planning.

Freight Consolidation Doesn’t Stop With Saving Money

Consolidating freight into larger shipments can benefit your business in other ways like:

• Reducing carbon emissions by decreasing the number of needed trucks.
• Improving visibility since there are less shipments to track.
• Minimizing handling, which reduces the risk of damaged freight.
• Creating a more predictable shipping schedule.

Is Consolidation the Right Choice for Your Business?

Businesses with frequent shipments to the same region, multiple vendors shipping to a common destination, or recurring LTL freight often see the greatest benefits from consolidation strategies.

A knowledgeable logistics provider like New Light Enterprises can help you to find opportunities to consolidate such as in-transit consolidations, multi-stop truckloads, and partials. This can help reduce transportation costs and improve overall efficiency. Contact New Light today to see how we can help your business!