The Power of the Pool Distribution Model
For anyone looking to reduce delivery costs and improve transit times, the pool distribution model is one of the most practical solutions around.
In a nutshell, pool distribution is when freight from multiple sources in one area are shipped out together on a truck to be delivered at various stops along the way.
Think of it like carpooling, except, carpooling for goods instead of people. Oh, and they all get to jump out at different stops on the ride.
However, pool distribution is by no means a new concept. In fact, the pool distribution model is one of the most widely used shipping methods employed by shippers all around the world.
If you are uncertain about whether or not partnering in a pool distribution program is a good option for your company, well, we wrote today’s blog post just for you!
How Does Pool Distribution Work?
A fully optimized supply chain is the key to lowering delivery costs while improving delivery speeds. Supply chain optimization is an umbrella term that covers a wide variety of tasks, but there is one area that benefits shippers the most.
The distribution model.
When a distribution model is properly integrated into a supply chain, things just flow much better. Pool distribution is one of these models that provides the most stress-free flow, so to speak.
Pool distribution essentially combines multiple, independent LTL shipments into one full truckload. Next, this truckload is allocated into individual delivery stops all along a single route within the same region.
For example, let’s say that there are 4 businesses all in the same shopping center. Each of them has goods that need to be shipped out to their customers. But each of their customers is located in different cities within the same region.
Now, the companies could each ship their goods separately as less than truckload shipments, but that costs them more money and results in much slower delivery times. Or, they could partner up and send all of their shipments on a single truck, on a specific route with all stops planned, as a full truckload.
Additionally, this method saves them time, money, and peace of mind.
What are the Benefits of the Pool Distribution Model?
Pool distribution is a service that is offered by third-party logistics companies. Since 3PL’s work with multiple clients in a geographic area, they are often able to pool their resources together fairly easily. By doing so, they are able to, rather quickly, improve their client’s delivery performance.
Here are a few of the main benefits the pool distribution model provides shippers…
Improves Green Supply Chain Optimization
Nearly every business in operation today has some sort of green supply chain program. The concept is rather simple…
In order to be more socially responsible, shippers in multiple industries task stakeholders, along with various agencies to find ways of reducing dependence on natural resources.
For instance, the movement of freight via carbon-based emission vehicles is a primary concern to the global community. By pooling shipments into a single vehicle, the amount of carbon emissions to move those products is reduced.
Sure, it may not be a huge change due to just one less truck on the road. But then when you consider that many other shippers are doing the same thing, the decrease in carbon-emissions becomes more apparent.
The pool distribution method can eliminate multiple truck routes, and consolidate them into one, fuel-efficient delivery. The best thing about it is that multiple companies can take part in reducing resource consumption by working together.
When a company needs to schedule carriers for multiple LTL routes, the cost racks up very fast.
Partnering with multiple stakeholders who are sending their products to similar destinations as yours can multiply your savings exponentially. No more watching the shipping funds dwindle. Instead, just figure out when your next shipment can go out and schedule right away with all that left-over money!
Improves Transit Time
LTL carriers utilize terminals to improve their efficiency. Why not piggy-back on this concept as a shipper?
The pooling method of distribution saves a tremendous amount of time for distribution centers and local businesses. By reducing the number of stops, it reduces on-road time and improves customer service across the board.
The quarterback of the pooled distribution is a professional third-party logistics company.
As a matter of fact, if you are considering integrating a pool distribution model into your supply chain, reach out to us today! Redwood Logistics has the experience, the knowledge, and the network to get you up and running quickly and efficiently.