Shipping costs have been rising over the past couple of years. Soaring demand, fuel increases and world events have impacted rates globally. 

Whilst no shipping business is protected against the changes, businesses with smaller shipments or frequent shipments especially feel the effects of higher costs. 

Freight consolidation is one solution that can reduce costs without compromising great service. Never heard of it? Keep reading to find out everything you need to know.

What is Freight Consolidation?

Freight consolidation is the logistics process of combining several small shipments from different shippers into a larger shipment. By grouping smaller shipments, transportation costs can be kept lower. 

Imagine three shipping businesses want to ship goods from the UK to France. If each business sends its cargo separately, they will all need to cover their transportation costs. By consolidating their freight into one larger shipment, they need only cover a third of the transportation costs each.

You might wonder where freight consolidation fits in the discussion around LTL (less-than-truckload) and FTL (full truckload) shipping. In LTL shipping, many small shipments from different businesses are transported together in a truck. In FTL shipping, one company uses the whole truck for its goods only…

The freight consolidation process bridges the gap between the two shipping methods by combining small shipments, like LTL shipping, into one big shipment, like FTL. 

How Does Freight Consolidation Work?

Here’s a run-through of the typical freight consolidation process…

1 – First Leg

Small shipments are sent to a central consolidation centre or warehouse and distribution centre to be prepped for shipping.

2 – Grouping By Destination

At the centre, the smaller shipments are sorted based on destination and grouped appropriately. These groups of shipments will form consolidated shipments.

3 – Loading

The groups of small shipments are loaded onto trucks or containers as one larger shipment. 

4 – Transportation

Now consolidated, the larger shipment is transported to its destination as a far more cost-effective full truckload of freight.

5 – The Final Leg

Once the consolidated shipment arrives at its destination, it is de-consolidated – meaning it is separated back into its smaller shipment parts – and each smaller shipment is delivered to its recipient. 

Where Does The Freight Forwarder Fit In?

The answer? Everywhere.

Freight forwarders play a crucial role in consolidation management. From coordinating with shippers and arranging transportation to handling customs and negotiating rates, freight forwarders simplify the shipping process and improve efficiency for everyone involved. 

Saving Money with Freight Consolidation

By consolidating shipments, shipping businesses can reduce their spending on transportation costs. 

Why?

Because FTL rates tend to be considerably lower than LTL rates. 

Small shipments don’t get the best rates because carriers prioritise larger loads. By consolidating shipments, you are effectively joining forces with other shippers to significantly increase the volume and unlock bulk shipping discounts that wouldn’t be achievable going solo with a small shipment. 

And guess what? This is a key benefit of working with a freight forwarder like Millennium Cargo. Working on your behalf, and with the negotiating power that comes from large shipments, we can leverage our expertise and network to secure discounts and pass the savings on to you!

Benefits Beyond Cost Savings

The advantages of freight consolidation don’t stop at money saving. Here are four huge pros of consolidating shipments.

Improved Efficiency

Consolidation streamlines the shipping process. Consolidated shipments being transported by truck tend to make fewer delivery stops compared to the often many small shipments of LTL shipping. This leads to less handling, faster delivery times and a significantly reduced risk of damage or loss. 

Reduced Carbon Footprint

By consolidating your shipments you’re reducing the number of trucks on the road. A reduction in fuel consumption and carbon emissions supports your business’ green shipping efforts, which are becoming a key decider for consumers.

Many UK government initiatives revolve around consolidation because of its green credentials, like Go Ultra Low West, a £7m transport project that aims to provide infrastructure for large-scale conversion to electric and ultra-low-emission vehicles in the West of England.

Increased Capacity

Freight consolidation helps businesses source space in pallets and trucks during busy periods when carriers typically have reduced capacity. 

Simplified Logistics

Freight forwarders take the stress out of consolidating freight so that you can reap the benefits without needing to handle the admin. From selecting the best carrier to overseeing deconsolidation, this frees up businesses to focus on their core operations. 

Reap The Benefits Of Freight Consolidation

Freight consolidation is a strategic approach to shipping that can significantly reduce costs, streamline operations, and improve efficiency. 

Worried about making the shipping process even more complicated? A friendly freight forwarder like Millennium will handle consolidation management so that you don’t have to. 

Get in touch with us today to find out how we can save you money.