The last few years saw many changes ranging from remote work becoming standard to a lot of people grabbing the opportunity to embrace entrepreneurship. In fact, Americans alone started over 5 million new businesses in 2021.
While that kind of initiative is often good for the economy, it also means a lot of business owners learn the ropes the hard way. For example, many new business owners don’t know about the logistical benefits of freight consolidation for LTL shipments.
Are you wondering what benefits freight consolidation might have for your business now? Keep reading for an overview of what freight consolidation can potentially do for you.
What Is Freight Consolidation?
When small businesses send freight shipments, they’re often what the shipping industry refers to as less-than-truckload shipments. The shipment either lacks the weight or lacks the size to fill a truck.
Freight consolidation is when a shipper or a number of small businesses consolidate individual shipments to fill a truck to capacity. As a rule, the shipments are all destined to land in a specific geographic area. On arrival, the individual shipments can move on to their final destination through local delivery services.
Of course, any shipping service will want clear records of consolidation. They might use something like LoadPilot Freight Broker software to arrange and track the shipments.
The same principle applies in the logistics industry when talking about cargo containers. Businesses can consolidate shipments coming from overseas into one container. Once the container arrives, the contents can get divided up and sent on to their final locations.
With the essentials of freight consolidation out of the way, let’s move on to the benefits of shipping freight this way.
Cut Down on Shipping Costs
When a small business must ship more than, for example, the post office will accept, they must turn to freight shippers. The problem that many small businesses face is that it costs a lot to send shipments that don’t actually fill the trailer of a truck.
You can pay for the truck to go anyway, but you pay the full rate. With freight consolidation, other freight goes into the same truck. The upside is that the cost gets spread out among more businesses. Your freight still gets where you need it to go, but you catch a break on the overall price for it.
If you send out regular shipments to the same locations and know other businesses that do the same, you can potentially negotiate a better deal by setting up a recurring delivery schedule of consolidated freight.
Less Chance of Damage
Nothing can completely eliminate the chances of damage during freight shipments. Those trucks travel on public roads and accidents remain a possibility.
Of course, the biggest risk factor for damage isn’t usually a vehicle accident. Handling causes damage more often than almost anything else. Every time your shipment passes from one truck to another or through a warehouse, the chances of incidental damage go up and up.
When you consolidate shipments, though, you dramatically reduce the number of times your freight gets handled. In most cases, it goes onto the truck and doesn’t leave it again until it arrives at its final destination. Keeping it on the truck until arrival can keep your freight intact.
At that point, the freight is, as often as not, broken down from the pallet and sent on to recipients piecemeal.
Freight consolidation isn’t a direct street to happier customers, but it gets you there all the same. If you regularly use freight consolidation to reduce your shipping costs, you can pass some of those savings on to your regular customers. Everyone loves getting a discount.
If you can establish a routine shipment schedule with other businesses interested in consolidated freight shipments, your shipments become more reliable. Most customers appreciate shipments that arrive on a predictable schedule.
No customer likes a damaged shipment. It’s almost always a hassle for them, often delaying their own customers. It’s a hassle for you in replacing the damaged goods and trying to recoup the loss from the shippers.
If freight consolidation reduces the amount of freight that arrives damaged, you can expect happier customers.
Another advantage of consolidated freight is better shipment visibility. If you know that a shipment is left in a specific truck and won’t exist in that truck until arrival, tracking becomes much more reliable. Many shippers provide GPS location updates, which lets you see where a shipment is and if it’s on time.
Just as importantly, you can provide that same information to your customers. They can watch the updates, rather than contact you.
If something does delay the shipment, they find out about it from the tracking. The delay comes as less of a shock and gives everyone a chance to formulate a plan for dealing with the problem.
The visibility also helps you reinforce your credibility with your customers. If you say that the freight is left on a given date, the tracking should back you up.
Every time you hold up your end of the bargain by sending shipments on time, the more your customers will trust you. That trust can prove invaluable when you must ask a customer to take something on faith.
For example, let’s say that something goes catastrophically wrong and a shipment gets severely damaged. If the customer trusts you, you can assure them that you’ll send replacements as fast as possible and they’ll believe you.
Freight Consolidation and You
Freight consolidation is one of the strategic decisions that small businesses make because it offers so many potential benefits.
Saving money on your shipping is the most obvious and often most immediately valuable benefit. Anything that reduces costs is typically good for small businesses.
It also reduces the risk of damage during shipping. That can save you money and help make your customers happier.
You can also, potentially, work out a more predictable schedule and boost shipment visibility. Both of those can make your customers happier and improve trust.
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