Consolidation is the consolidation of items of similar characteristics from several senders into one destination. Shipments are collected either for delivery to a single destination or to a single recipient. Consolidation is in demand for international cargo transportation, for the delivery of small consignments of goods. They talk about it on the training for truck dispatcher.
The need to combine shipments arose due to the growth in the number of suppliers and recipients and the number of transactions in the b2b (business to business) and b2c (business to customer) sectors.
The main goal of consolidation is to reduce costs by using the entire usable area of a container or transport.
Cargoes are combined in special warehouses. A vivid example is the terminal of a transport company, where parcels are received from individuals and legal entities and sent by one car to the city of destination or a safekeeping warehouse.
Consolidation and deconsolidation are carried out according to different schemes. Without placing the goods in the warehouse (cross-docking) or with placement. The time and place may be different: consolidation in one city, and sorting and delivery in another. A consolidated warehouse is used to process orders for retail: a supplier brings goods, it is sorted and distributed to retail outlets across the territory (city, region).
To ensure that the process of merging, processing and delivery is not interrupted, the entire process is automated. Warehouses are combined into a single workspace. Employees have access to the system and, accordingly, to up-to-date data.
Who benefits from the cargo consolidation service?
Sending a consolidated cargo can reduce the customer’s transport costs for long-distance and international transportation by two or more times.
The service is used by small businesses. Online stores use delivery and pick-up points of logistics companies in different cities. This attracts buyers for whom it is important to pick up orders on their own (self-pickup). It is also beneficial to import goods from abroad, China or Europe in bulk.
Consolidation is also in demand in the b2c sector. Postal items are collected in one warehouse, sorted and formed by destination. Reception of waste paper, scrap metal, faulty equipment is also referred to as a merger service.
Advantages of cargo consolidation service
Consolidation of goods from different shippers has the following advantages:
Reducing the costs of the customer or recipient when sending a small batch of goods.
For international shipping, shipping costs are proportionally divided among all customers. The cost for each depends on the volume of the cargo.
The buyer can order a trial batch of goods or several batches from different manufacturers in order to assess the demand for a new type of product.
For international transportation, consolidated goods are processed in one waybill. This reduces customs costs.
The transport company is responsible for the loss or damage to the goods. In the event of such situations, the customer will receive compensation.
Among the disadvantages of groupage shipments, an increase in the delivery time can be distinguished. It takes time to assemble a full container. But for large companies with regular customers and a large cargo flow, this is not a problem.
How cargo is consolidated
Cargoes from several customers are combined in several stages. Experienced employees are involved in the process so that the process runs without delays and losses.
Acceptance at the warehouse or pick-up from the customer.
Warehouse workers check the integrity of the packaging. Re-pack items if the original packaging of the sender does not meet the standards and requirements for safe transportation.
The cargo is weighed and marked. Determination of dimensions and weight is necessary for accurate calculation of shipping costs. Confusion can arise without labeling.
The goods are divided into categories – sorted. Not everything can be transported in one container. For example, machines and electronics, strongly smelling objects and clothes, shoes cannot be transferred together.
Optimal placement of goods by sector and within containers so that customers benefit.
If the transport has different unloading points planned along the route, then the logistician’s task is to ensure the sequence of unloading goods so as not to unload and load them several times.
Logistics center managers and freight forwarders track the movement of goods in order to avoid additional and idle transport mileage, overworking of warehouse workers.