Remember the time when there was high freight demand and capacity issues for shippers? This was just 3 years ago when the shipping market was very unstable. And today, with growth of economy across the globe and success of the omni-channel world, many challenges have been overcome. But, eCommerce companies have boomed in these few years and created new challenges for multi-channel retailers. Consumer expectations have risen with quick home deliveries, free shipping and cash on delivery features offered by these eCommerce companies. Multi-channel retailers are having a tough time keeping up with these expectations. And with this, shippers are also facing greater pressures. They are expected to provide the retailers with their products at the lowest possible costs and at the time when the retailer wants it to be delivered. These pain points have become more challenging with LTL, TL and parcel solutions. This is why logistics are coming up with more creative solutions like freight consolidation services.
Freight consolidation programs incorporate more than one shipper’s freight like multiple LTLs and parcels into truckloads. Multiple freights that are to reach the same retailer’s distribution center, when incorporated into one, reduces costs, distance travelled and transit time as compared to LTLs and parcel services. Such freight consolidation services can prove to be major game changers to profit the retail distribution channel. Take a look at what challenges shippers are facing today and how freight consolidation services help in reducing these challenges.
Order sizes are becoming smaller
Online shopping has completely changed the way consumers shop today. Consumers have very high expectations and demands not only from online stores but also from retail in-stores. Convenience, gratification and availability of products are what consumers are demanding. With such high growth and convenience provided by eCommerce stores, retailers have reduced the size of their orders and shippers are seeing an increase in their costs.
How do freight consolidation services help?
In a freight consolidation program, multiple parcel shipments are combined together thus saving time and money. Individual parcel carriers charge dimensional weight for ground packages which result in significant cost increase. Adding these packages to a truck that is already heading to a retailer’s distribution center reduces these costs.
Profit margins are reducing
eCommerce companies have started offering free shipping to their consumers. Meanwhile, retailers are pressurizing the shippers to reduce freight costs so that they don’t need to compromise on their profits. Shippers are having a tough time reducing their rates because they do not have regular volumes to ship full truckload shipments regularly.
How do freight consolidation services help?
In a freight consolidation program, shippers pay only for a portion of the truckload rate depending on the amount of space occupied by their freight. Thus, shippers secure a rate that is below the traditional LTL rate.
Lead times are becoming shorter
Before eCommerce stores and online shopping boosted up, shippers had enough time to build up their pallets and consolidate into one shipment into a retailer, which meant longer lead times. But today, as retailers are adapting to the changes in product demand by consumers, lead times are becoming shorter than before.
How do freight consolidation services help?
With a freight consolidation program, consolidation occurs across multiple shippers that want to reach a particular retailer. In this case, volumes build up rapidly and shippers can still comply with the must-arrive-by dates. Because the freight in such a case travels directly to the retailer’s distribution center instead of through multiple LTLs or parcel sort stations, the transit times are significantly reduced too. All this highly reduces the costs incurred by the shippers.
All the above points show how freight consolidation programs relieve the shippers of the pressures they face today. These programs definitely reduce costs, distance traveled and transit time, and help shippers comply with must-arrive-by dates but along with that, they also involve less touches on the shipments thus resulting in reducing the possible damages that can be made to the products. After recognizing all the benefits of freight consolidation programs, you may also want to opt for it. For the top logistic service provider in India, you can get in touch with Jayem Logistics who will provide you with the most profitable deal for not only freight services but, for every logistics solution.
