Freight Consolidation
Freight consolidation is combining several small packages or shipments in to one big shipment. It is a logistics strategy where a shipper combines multiple shipments within a particular geographic region into a single shipment that is then line hauled to a destination point where the smaller shipments that were part of the consolidation are broken down and shipped to their final destination or the single shipment is delivered directly through to final destination, if planned properly, consolidation has proved to have several benefits.
De-Consolidation
This is the process of breaking down a single (bulk) shipment of cargo into several smaller shipments and processing those shipments for final inland delivery directly from the port of entry to a store or distribution center, which means once the consolidated freight shipment reaches its destination, it must be separated into smaller packages and delivered to its final destination.
Benefits of Consolidation and Deconsolidation in Freight Shipping
Lesser Freight Shipping Cost – Freight consolidation is well known to have a big impact on the freight shipping costs as the shippers only pay for the amount of space booked for their cargo, as opposed to the FCL shipment, where the shippers pay for the entire container load. Similarly, freight deconsolidation, when done correctly and timely can save cost in final distribution of the goods.
On Time Inventory – It is easier for shippers to get a space for their cargo in LCL shipments as compared to a full container load. Also, shippers can consolidate and ship their products as soon as they want and do not have to wait for the production or procurement of goods to fill an entire container. The cargo can then be deconsolidated and stored in places closer to the market, which results in quicker inventory movement, replenishment and availability of products in the market. Having a 3PL partner to handle such shipments serves as an additional benefit to businesses. 3PL partners offer clear visibility and notifications of the cargo movement, which help businesses in better inventory planning.
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