The Pros and Cons of Order Consolidation
In placing orders, shipping works best when orders come in bulk. Though with orders that come smaller or lesser than the expected amount, it hurts the shipping companies due to the costs involved. In such circumstances, you would encounter the option for freight consolidation. This method works by putting smaller packages together into one cohesive shipment. This helps in reducing both shipment costs and environmental impact.
Using order consolidation has its upsides and downsides. Today, we will look at these details and see how to make this work for you.
Reduced Shipping Costs
To start, we will look at the advantages you gain from order consolidation. One of the more noticeable advantages of this arrangement is that it costs less on shipping.
When you have shipment loads that are Less than Load (LTL), the shipping fee would depend on the size of the item. The rates would also vary between shipping companies. Though this changes when it fills up only 1/6 of the full load.
In such situations, it would end up with you paying for the rate equivalent to a full shipment size. This will have you shoulder the other underlying fees.
This changes when you go for order consolidation. By putting more LTL packages in a single shipment, you can reduce the costs of shipping.
This works well for cooperative setups. Here, you have one shipment to cover multiple packages from different sources.
You get to divide the costs with others, letting you pay your side of the container or truck. This also applies to warehousing, especially with orders that go through international shipping.
There is also an arrangement where you have a warehouse for packages from multiple shops. For such an arrangement, you need order consolidation to answer that. This allows you to send the packages to your area in a single shipment.
Streamlined Transportation with Faster Delivery Times
With this setup, you can get shorter times for transit and lead times. Due to how freights go in the same direction, the shipping becomes streamlined with its speed. This helps with timeframes due to how the majority of freights shipped using freight consolidation follow the same routes.
With this in mind, not only does it shorten the timeframe for the package to arrive, but it also comes without any interruptions. This means the order gets to the receiver without any stops.
Reduced Item Damage Risk
A single package on its own when placed for international shipping has a high chance of damage. It could end up getting jostled around and tossed from one corner to another without any means to secure it. This can prove detrimental as it damages the ordered item.
When you have it alongside other packages in a single shipment, it secures the item in place. This means it has less space for it to get tossed around. You can achieve this through simpler shipping schedules.
Needing Lower Levels of Inventory
Opting for order consolidation allows you to use a consolidation warehouse to make this work. On this aspect, you need low inventory levels when fulfilling customer orders. On the business side, this helps you open up more space for other merchandise and products to sell.
Store owners would note this as an advantage. It allows them to sell products with a higher variety. It also helps with organizing products and reduces inventory carrying costs.
Reduced Emissions and Environmental Impact
One of the things that affect the environment is fuel emissions. What makes order consolidation attractive is its approach towards efficiency.
Not only does it apply efficiency in storage space for the shipment. It also puts it into practice with fuel emissions and costs.
Instead of splitting up different shipments in separate runs, you end up having packages shipped by batch. This reduces the number of trucks and other transportation vehicles involved in the delivery.
Helps Avoid Overcrowded Docks
For brick-and-mortar shops, overcrowded docks can impede in handling shipments. With this method, you can avoid overcrowded docks by reducing the number of trucks present. With more space on the dockside, you have an easier time handling the products.
This opens up towards increased efficiency. It helps avoid late shipments and unintended detention times.
Improving Customer Satisfaction
With order consolidation, customer satisfaction improves. Not only does it provide the products with better quality, but it also charges less on shipping. With improved customer satisfaction, they would want more.
Logistics Scheduling Becomes Complicated
For this approach, scheduling becomes one of the trickier aspects. The process of scheduling the shipments may end up being the long and heavy portion of the whole arrangement. It involves a lot of aspects of organization and execution.
If you choose to play this setup by ear, you would end up in a disorganized mess. You would end up with frequent reschedules and service calls.
Consider going for a defined system for order consolidation. With an organized system in place, you have a simpler time dealing with such issues.
Fulfillment Inaccuracies and Shipping Delays
Another notable problem is in the shipping in itself. Though this pertains to the other aspect, the warehouse. Order consolidation opens up a lot of complications in the scheduling. Making any wrong calls on this would cause delays in fulfillment.
The other issue that would come up would be inaccuracies. Without proper supervision, the packages may end up at the wrong address.
What you need to pull this off is a reliable logistics service provider. They can assist with situations involving warehousing and inventory.
Order Consolidation for Efficient Order Fulfillment
Using order consolidation provides a good number of advantages. It provides an efficient means for fulfilling products for orders that have smaller packages. While complicated, a reliable logistics company can help you ease out these situations.
Order consolidation is one of the solutions we offer. We can help you get started with your fulfillment needs, such as warehousing. Contact us today and we can help you get started.