Shippers with smaller, frequent shipments often face a frustrating dilemma: paying premium LTL rates that eat into margins or struggling to fill full truckloads. Every shipment that leaves your warehouse floor represents both an opportunity and a cost—and when you're managing multiple smaller loads, those costs can quickly spiral out of control.
How do you balance cost efficiency with delivery reliability when your shipment volumes don't align with traditional full truckload requirements? The answer lies in consolidated freight shipping, a method that allows shippers to combine multiple smaller shipments and share the cost of a full truckload.
Consolidated shipping is the method of taking LTL shipments from multiple shippers and shipping them all together in one full container as a full truckload. By doing this, shippers share the cost of the truckload, only paying for the exact physical space their goods are occupying in the truck.
This method of shipping is ideal for shippers who only have a lot of smaller shipments. If they want to avoid paying higher rates shipping them out as multiple LTL or FTL shipment when they don't meet that definition, there is consolidated shipping.
In this blog post, we'll explore the top three benefits of consolidated freight shipping to help you understand how this method can transform your logistics strategy.
Benefits of Consolidated Freight Shipping
Cost
One of the most popular consolidated shipping benefits that shippers like to point out is the cost. Generally, consolidated shipping is quite a bit less expensive than going the LTL route.
Key cost advantages include:
- Shared truckload expenses: You only pay for the physical space your goods occupy
- Regional efficiency: Multiple small shipments traveling to roughly the same area can be consolidated into one truckload
- Immediate savings: Cost reductions begin with your very next shipment
If you have multiple small shipments that are traveling to roughly the same area, consolidating them into one truckload is not only logical thinking, but it will also save you money that you would have otherwise spent to ship them out individually.
Minimize Risk
Even the best carriers have been known to have a fumble here or there, resulting in accidentally damaged packages. This is something that usually happens during the LTL process.
See, when a driver is making multiple stops and needs to continually rearrange the load to pull goods out at each stop it increases the risk of damage.
When this happens, it often results in the shipper eating the costs to rectify the situation as they scramble to try and keep their customer satisfied and the relationship intact.
Consolidated freight reduces damage risk through:
- Minimal handling: Goods only need to travel from your warehouse to a consolidation center, then to customers in the same vicinity
- Streamlined sorting: Products are sorted once at the consolidation center and sent directly to final destinations
- Fewer touchpoints: The fewer hands on your products, the better
By shipping products as consolidated freight, the chances of your goods getting damaged are drastically lessened compared to traditional LTL methods with extensive handling.
Improved Relationships
This should go without saying, but your customers are loyal to you for very good reasons. The biggest of those reasons being that you can get their products out to them on time, and without damage.
By doing your research and utilizing the most efficient and reputable shipping methods, you not only can save money, but you also build value into your supply chain and develop long-lasting relationships with your customers. And there is nothing more valuable than keeping a good rapport with your customers. But this is something that is only achieved through trust and a solid track record.
However, it's not just about your customers…
Consolidated shipping creates multiple relationship opportunities:
- Business partnerships: Establish working relationships with other businesses who are reliant on LTL shipping and ship to the same areas as yourself
- Shipping networks: Build enough partnerships and you have yourself a small network that can significantly reduce costs for everyone involved
- Carrier relationships: Doing long-term business with the same carrier over time fosters a valuable relationship that can lead to locking in future discounted rates
The most successful shippers understand that substantial relationships throughout the supply chain create lasting competitive advantages. See how businesses have benefited from optimized shipping strategies in our case studies.
Final Thoughts
Consolidating freight is a method that any business can utilize and potentially see decent returns from — in fact, one global manufacturer achieved 7.21% freight cost savings through strategic load consolidation. This is especially true for smaller operations that are already shipping lots of smaller goods regularly.
By consolidating all of your shipments for a specific region, you can save significantly on shipping costs. By partnering with other shippers currently making use of LTL shipping, your savings can multiply substantially.
Not sure where to start? No worries, that is where Redwood Logistics can help!
Just contact Redwood Logistics and let us help you set up a consolidated freight shipping strategy that will save you money, build value into your supply chain, and help you build shipping partnerships that are beneficial to all.