Your shipping operations can be a source of hefty costs and complex processes if you do not approach it the right way. And the right approach for every business depends on its business and shipping requirements.
Consolidated shipping is one such shipping method that you should know about.
Let us discuss this shipping approach and the many benefits you can gain from adopting this approach in your shipping operations.
What is Consolidated Shipping?
Consolidation shipping, also known as freight consolidation, is a freight transport approach that every shipper company should know about.
Consolidated freight shipping involves combining multiple smaller shipments into a single large shipment or container. As a result, businesses will be able to maximise their container space and manage transportation costs effectively.
For example, if your goods only take up 60% of the space in a Shipping Container, there is 40% unused space remaining in the container. Instead of sending out the container while wasting the remaining space, you might want to consolidate it with another shipper to fill the other 40% space and share the cost of the container. Alternatively, if the shipment is not urgent and you have other goods to ship shortly, you may wish to wait until you have enough goods to fill the remaining 40% with your own product.
10 Benefits of Consolidated Shipping
Now that we know the consolidated shipping meaning, let us look at some of the primary benefits you can gain from this approach:
1. Economies of Scale
Economies of scale as you know are created when your company’s production or operations become so efficient that you can start enjoying cost advantages from it.
When you deal with many shipments, you will naturally create economies of scale with your freight handler, but this is even more plausible in the case of consolidated shipments, where you can attempt to reduce your transportation costs.
When shipments are combined for efficiency, you may negotiate better rates with the consolidated shipping company and enjoy discounted rates for your shipment. You can also enjoy lower handling fees and other cost advantages.
2. Saving Costs and Resources
Opting for consolidated shipping companies can help you reduce your shipping costs to a large extent, especially if you are dealing with high shipment volume. Since this approach will help you combine multiple smaller shipments into a large one, you can avoid paying shipping charges for those small individual shipments, thus saving on costs.
What’s more, even if the container is not completely filled with your shipments, and you are sharing the space with another shipper, you will end up sharing the shipping costs with them. Since each party, in this case, will only pay a fraction of the total transportation expenses, the individual shipping cost incurred by each party will be reduced.
For instance, if the shipping cost for shipping your package via a specific container is $750, and the shipment value is just $400. You will actually end up paying more for shipping than your shipment is worth. Instead, if you share that space with 2 other vendors, the individual shipping cost you have to pay will come down to $250.
3. Utilise Resources Efficiently
Every process requires a certain number of resources to be utilised, and your shipping process is no different. For any shipping process to be carried out efficiently, using your cargo space and transportation equipment optimally is necessary.
Consolidated shipping can make it easier for you to optimise the resources, equipment, and personnel used in your shipping process. You can also maximize the available capacity with the help of filling up partially filled trucks or cargo space that is underutilized.
As a result, your business can enjoy improved resource efficiency, which can again lead to reduced transportation costs.
4. Improve Delivery Speed
As an eCommerce store, if you are operating in a highly competitive niche, you may have to consider offering multiple delivery speeds to your customers.
Consolidating shipping can not only help you offer multiple delivery speeds but also facilitate improved transit times and faster deliveries. Faster deliveries, as you may already know, can help you achieve improved customer satisfaction and experience.
What’s more, you can consider combining your cargo for shipping to enjoy added benefits such as route optimisation and a reduced number of breaks or stops during the journey. As a result, you can build more streamlined shipping operations, which can lead to more efficient order fulfilment.
5. Reduce Carbon Footprint
Imagine a typical shipping operation where four different vendors are lining up to send out their shipments to the same destination. This generally means sending out four different trucks on the road following the same route. Imagine the amount of COâ‚‚ emissions and freight costs this is generating in comparison to sending out just one truck.
This entire scenario can prove counterproductive for your company’s carbon footprint and can even be bad marketing considering how environmentally conscious people today are. Consolidated shipping is a great way to prevent this issue while reducing fuel consumption and controlling your greenhouse gas emissions.
This shipping method highlights a more rounded approach towards sustainability and ensures your company fulfils its environmental responsibility.
6. Improve Security and Reduce Risks
Your shipping operations can pose several security risks for your company, considering the increased exposure to people and equipment. While consolidating shipping can not exactly eliminate this issue, it can reduce the amount of risk associated.
Since a consolidated shipping line involves fewer people, transfers, and vehicles, most of the security risks are prevented, making it a safer approach towards shipping. Your shipment will be handled less often compared to standard shipping, which will lower the risk of any shipping errors.
What’s more, you will have to track and monitor the progress of just one large shipment instead of multiple smaller ones, thus eliminating any risks in that process as well.
7. Streamline Customs Clearance
If you are dealing with international shipping operations, the paperwork and processes associated with multiple shipments can make the process quite complex. However, in case of international shipments, consolidated shipping services can simplify and streamline the customs clearance process to a large extent.
You can reduce your administrative burden by opting for consolidated shipping service which can lessen the amount of paperwork and customs documentation you have to deal with for each shipment. So, instead of carrying out this paperwork for each small shipment, you only have to deal with it once for the consolidated shipment.
8. Improve Customer Service
With the help of consolidated shipping agencies, you can bring more efficiency and affordability to your shipping operations. While you can already ensure customer satisfaction by offering them more options and speeds for deliveries, you can ensure top-notch customer service by delivering on that promise.
Consolidated shipping helps you stick to specific delivery schedules making the turnaround times associated with your shipment more predictable. By leveraging the benefits offered by consolidating shipping, your business can aim to provide better service to your customers and even meet tight delivery timelines.
What’s more, the increased efficiency also makes it easier for you to reduce the risk of delays and shipping budget overheads.
9. Better Quality Control
There are traditional shipping approaches and then there is the consolidated shipping approach which is completely different. This approach can help you receive your goods much faster compared to traditional shipping methods, which means you get more time for quality control.
As soon as a shipment enters your consolidated shipping warehouse, you can initiate quality control on the shipments and even save precious time that you might otherwise end up wasting on correcting quality issues. With high-quality products, you can reduce your shipping turnaround times even further.
10. Get More Flexibility and Scalability
Regardless of the size of your business, consolidating your shipments can bring more flexibility to your shipping operations. Consolidated shipping is a highly adaptable approach making it perfect for smaller businesses that want to save on costs and resources, as well as for larger businesses that are looking for more scalability.
The shipping needs of your business might evolve over time, and it may not always be possible for you to increase your capacity immediately. Consolidated shipping benefits let you deal with any additional shipping volume temporarily, till you come up with a more permanent solution for your growing shipping requirements.
How Does Consolidated Shipping Work?
Let us now look at the process of consolidated shipping in brief, so that we can correlate all the benefits that we have discussed thus far:
- Planning Shipments: Depending on your shipment volume and shipping requirements, the first step you need to consider in the process is shipment planning. This will tell you the number of shipments you can consider for consolidated shipping in Australia and whether it is an option at all.
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Preparation: The next step would be to prepare your shipments so that they can be consolidated and shipped out. This involves packaging and labeling all your shipments properly, and ensuring that all the necessary documents are in order.
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Consolidation: Once your shipments are prepared to be consolidated, it is time to coordinate with your shipping partner to execute the strategy. Ensure that you consider all the necessary conditions before you decide to go ahead with consolidated shipping.
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Monitoring Performance: Once your consolidated shipment is sent out, all you need to do is track its journey to the destination so that you can keep all the relevant stakeholders informed.
Concluding Remarks
Consolidated shipping is a great shipping approach to consider for small and large businesses alike. Regardless of your shipment volume, a well-defined consolidated shipping strategy can offer many benefits to streamline your operations and help you level up your shipping operations.
If you are looking for the right shipping partner to support you in achieving your goals, consider getting a quote on our website to partner up with PACK & SEND and strengthen your shipping operations.