How Scheduled Freight Consolidation & Cross-Docking Saves You Time & Money
If there is one thing we have learned over the last two decades and, more specifically, the last few years, it is that even small changes on one end of the supply chain can significantly impact other participants upstream or downstream. There is no doubt that the COVID-19 pandemic spotlighted vulnerable parts of the U.S. supply chain network. Two years from the onset of the pandemic, the national and global supply ecosystem is still struggling to recover from the pandemic’s crippling impact.
Third-party logistics providers (3PL) in the food and consumer product goods (CPG) industries are no strangers to adapting processes due to changes in supply and demand. Colonial Cartage, for one, began more than 65 years ago as a local DSD carrier helping our warehousing clients (quite literally) get their products to retail shelves.
Our less-than-truckload (LTL) carrier services evolved due to changes in the scale of retail store operations, the efficiencies gained by consolidating multi-vendor store deliveries, and more sophisticated inventory management technology.
This blog looks at some of this history. It also explains how Colonial’s LTL freight consolidation and cross-docking services can help food and CPG brands reduce transport costs, shorten their delivery cycle, and minimize handling in transit. All of which are improvements for businesses operating in this post-pandemic environment.
Lean Retail Practices & COVID-19: The Perfect Storm
In the early 2000s, U.S. retailers began shifting their stock and inventory management processes to accommodate more variety and rotating brands. Bulk ordering from their suppliers proved costly from a speed-to-market, carrying cost, product quality, and storage cost perspective. New lean retail practices – ordering less stock but more frequently – put the pressure back onto processors and manufacturers. More frequent shelf replenishment opened shelf space for line extensions and new brands, offering consumers more choice. All of this required more agility by the food processors and CPG manufacturers.
Due to the “just-in-time” nature of lean retail practices, brands now had to move faster and more frequently to replenish stock orders but often with smaller orders. Transportation and logistics costs increased, as did the handling costs of moving items and materials in and out of storage locations in smaller quantities.
And Then Along Came COVID-19…
When the pandemic hit, the nature of lean retailing left many retail vendors and retailers vulnerable and exposed to pandemic inefficiencies. Lean retailing works on the assumption of an “always-on” responsive and proactive supply chain. That did not hold up in a COVID-19 reality.
For retailers needing replenishment, the COVID pandemic effectively eliminated flexibility in the supply chain. Container shortages, port closures, limited transportation capacity, labor shortages, and other supply chain challenges reduced inbound raw material and component inventories, making it difficult for many manufacturers to produce and deliver products based on retailer demand.
Suddenly lean retail practices meant empty shelves, leaving retailers scrambling to access stock from other sources. The lean nature of retail stock replenishment left vendors with inventory deficits and low supply. 2021’s panic buying by retail stores put even more pressure on retailers to replenish the goods they needed; this has created the ongoing deficit between demand and supply that continues to be exacerbated by pandemic-influenced circumstances as much as two years later.
How Can LTL Freight Consolidation and Cross-Docking Help?
Numerous manufacturers and food processors have turned to their 3PL partners to help ease the pressure created by lean retail practices and the global supply chain crisis. Freight consolidation and cross-docking are examples of creative solutions offered that deliver numerous benefits for CPG companies.
Freight consolidation, which combines multiple LTL orders to the same destination into a single trailer or truckload, is more cost-effective than shipping straight LTL. Additionally, in today’s environment, LTL services are over-subscribed, leaving many orders on the origin shipping docks to be picked up “whenever we get capacity to pick it up.”
A common challenge faced by LTL carriers is not having sufficient volume to make a route or load profitable, leading to shipping delays and longer delivery lead times. Colonial Cartage, however, never traps freight. If we have an order, our trucks depart as scheduled for the destination.
Cross-docking, which uses a staging area for transferring goods from one truck to another, removes the need for unnecessary storage dwell times and product handling. It helps shorten the delivery cycle, lowers expenses, and increases efficiency and reliability. While it requires coordination among multiple parties, cross-docking is a practical way to reduce operational costs and streamline order fulfillment.
Why Choose Colonial Cartage?
At Colonial Cartage, we believe today’s supply chain must be able to manage shorter lead times, maintain product quality, and offer reliable, on-time services. When shipping food and CPG products, our number one priority is ensuring their timely delivery in perfect condition. We are also steadfast in our ability to meet retailers’ compliance metrics.
As a temperature-controlled and ambient LTL service provider, Colonial Cartage offers comprehensive and reliable LTL freight consolidation services. We have one of the nation’s largest, most extensive refrigerated LTL freight consolidation programs with weekly deliveries to retailers across 26 states throughout the Southeast, Southwest, Midwest, Upper Midwest, and the Great Plains.
We have also cultivated the skills and technology necessary to implement speedy, seamless cross-docking and have the experience to manage cross-docking transfers in their drop sequence.
Food and CPG companies with experience in high-velocity shipping ready to experience faster and more reliable transportation services can trust Colonial Cartage to handle their business. For cost-effective and dependable LTL and cross-docking solutions to meet all your shipping needs across Colonial’s service area, look no further than Colonial Cartage. Contact us today to find out how we can help you.