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Cargo consolidation is a technique for preparing products for shipment, which involves grouping orders from different vendors into one shipment.

Not always the order sent is large enough to fill the entire trailer of a truck or a transport container, so such transport becomes unprofitable from the company’s perspective. The answer to this type of situation is consolidation,

The process of cargo consolidation does not only concern the issue of its transport. It is also used in warehouses at various stages of goods handling: admission to the warehouse, storage as well as preparation for shipment and its final release from the facility.

In this article, we will take a closer look at what is cargo consolidation both from the perspective of the transport service and the warehousing process, and indicate the benefits of using it.

Consolidation of loads in transport

Carriers most often use two methods of transporting goods:

Full load shipment : the entire shipping container is used to transport a single customer’s merchandise,

Consolidation : a full container consists of loads from different vendors.

Consolidation of loads reduces the cost of shipments over very long distances. This is especially beneficial for smaller companies that do not handle the number of orders that can fill the entire carrier’s shipping container. As a result, the operation of shipping orders in the traditional way becomes unprofitable for them.

Consolidation allows companies to pay only for the space that their cargo takes up in the trailer. As a result, the shipping company groups orders from different sources that share the same shipping address. This action allows all parties participating in the operation to maintain the financial profitability of the operation .

The downside of this solution may be the extended delivery time of the order. This is because the carrier wants to collect as many loads as possible as part of consolidation before starting the transport to the final destination. The carrier must also first reach the warehouses of all companies to collect the loads included in the grouped shipment.

The course of consolidation of loads in the warehouse

In warehouses, the use of consolidation allows you to optimize the use of the available space for cargo storage. And thus more efficiently fulfill customer orders.

Consolidation, understood as grouping products from different sources, can be carried out in the following warehousing processes :

The process of receiving the goods into the warehouse : consolidation takes place as soon as the items are delivered to the warehouse. They are sorted and grouped into loading units containing the specified SKUs .

Location of products in the warehouse : the consolidation process streamlines the way products are positioned within the storage area.

Pre-shipment activities : Products are consolidated by shipment or customer route as they are shipped in the same container.

This method is a necessary logistic operation carried out when using a cross-docking strategy in the supply chain .

Benefits Of Cargo Consolidation

We discussed the main features of cargo consolidation both from the perspective of the transport service and warehouse operations. Now let’s take a look at why it is worth using this method of organizing the release of goods from the warehouse . Here are the most important benefits of consolidating your shipments:

Savings on transport costs : Consolidation enables the sharing of freight charges with other companies. This allows companies that do not handle a large number of shipments. Or have smaller products access to a transport service. That is beneficial to them from an economic point of view.

Higher quality of services offered : For the transport sector, freight consolidation opens up many opportunities. In terms of proposing transport services – more frequent shipments or providing more destinations.

More efficient use of available space : load consolidation maximizes the use of storage space in warehouses, trucks or shipping containers.