Why Move from LTL to Consolidation Services?
Between an evolving retail landscape, rising transportation costs, higher shipping volumes, and ever-tightening delivery windows, LTL shippers are fighting to remain competitive and provide satisfactory service to their customers. Manufacturers and processors find themselves faced with higher costs and less predictable delivery timetables as LTL services struggle to compete for shrinking delivery windows for LTL freight. These challenges can be mitigated by moving from the straight LTL model to freight consolidation services provided by asset-based third-party logistics (3PL) companies.
By creating regional (and, in a few occasions, national) consolidation centers 3PL’s are able to offer a more reliable service. Let’s look at a few reasons to consider moving from LTL to a consolidation services model.
LTL carriers are frequently relying on having the critical mass on their docks to make their trucks profitable. Some carriers will trap freight until they can build economically viable loads. The longer they hold the freight, the greater the chance of missing the customer’s delivery window. If a particular lane or destination does not have the order volume to make the truck profitable, LTL carriers will add drops, again stretching out delivery Consolidation centers provide a single shipping origin from which the products of different shippers heading to the same destination can be inventoried and distributed more easily.
Reduced Risk of Damage or Errors
The consolidation model reduces the number of times a pallet will be handled. This helps protect inventory and reduces the incidents of loss or damage.
Improved Tracking Capabilities
When a 3PL company oversees the responsibility of shipping pooled distribution from origin to destination, it is much easier to track and trace orders from departure to delivery. Technology gives shippers a window to their orders in real-time. Companies can check the status of their orders and get more timely information with greater accuracy and frequency.
Lower, more predictable costs
Consolidation is, by definition, more cost-effective and more dependable than LTL transportation. With less risk, the average savings in transportation costs can be 25-35 percent less than straight LTL.
In summary, moving to a consolidation services model for less-than-truckload shipping helps solve many of the challenges faced today by companies who work directly with LTL carriers. To learn more about how Colonial Cartage, contact us today.