Entrepreneurs whose supply volumes are insufficient to fill a truck bed with goods every time should use consolidation. Consolidated cargoes are small batches of goods from several consignors that are combined in one vehicle on one route. Consolidation provides benefits to all participants:

• a carrier sends not half-empty, but fully-filled vehicles on the route, which saves fuel, reduces the cost of driver salaries and vehicle depreciation;

• a customer pays only for the space in the vehicle that is occupied by his cargo, not for the entire vehicle;

• a consolidation operator carries out route planning and documentation. 

The useful volume of the vehicle is used as efficiently as possible. Consolidation of cargo reduces the number of trips, and therefore the working time of drivers is reduced. This allows carriers to optimize their staff. Cargo handling time is also reduced, so there is less risk of damage to the goods. Entrepreneurs can expand their product range because with consolidation, goods can be shipped in small batches.

The only disadvantage of consolidation is that transportation of groupage cargo requires more time for preparation. This delivery option may not be suitable for those planning to make an urgent shipment. However, the use of artificial intelligence in transportation planning significantly reduces the time for order processing and route building. CONSOLID.AI works on this principle. 

How to maximize consolidation?

Free space in the transport of logistics companies, manufacturers, and retailers with their own fleets is a resource that can be used to earn money or significantly save on freight transportation. Join a network of companies, a digital logistics ecosystem like CONSOLID,  to increase profits and improve the quality of transportation. 

CONSOLID.AI offers cargo consolidation and seat-filling, which maximizes the utilization of transport resources, which in turn leads to a reduction in the number of trips, significant fuel savings, and reduced fleet wear and tear. 

Reducing the number of shipments reduces the chances of something going wrong. One consolidated shipment is easier to manage than several smaller ones. It is easy to handle, track, and the operation is less prone to errors. 

Transportation becomes more sustainable even without replacing trucks with modern electric vehicles or more environmentally friendly car models. Vehicle downtime is reduced because all routes are maximized and vehicles stay on the road more often. Thus, consolidation decreases CO2 reducement and creates a greener business model. 

By utilizing all available truck space, storage costs can be reduced. There are fewer shipments and the need for warehouse space is also reduced. Consequently, the consolidation participants also save money on inventory management and storage. 

Private Label Cabinet enables transparent cooperation and fruitful communication between all participants in the supply chain. The consolidation operator plays a special role in this. 

What is a consolidation operator?

A consolidation operator is an intermediary company between shippers and consignees. It is a link between manufacturers and retailers who do not have the resources for transportation, are looking for free FTL space (full truck load), or want to save money by consolidating routes. Any participant in transportation can become a consolidation operator.

Logistics companies

Logistics companies play the role of flight dispatcher. They process requests, approve consolidation participants, control the payment process, provide documentary support and customer support. 

By acting as a consolidation operator, logistics companies strengthen their own brand, expand their customer base, and receive remuneration for supporting and organizing transportation (up to 33%). Vehicle utilization is increasing, and logistics companies can fulfill customer orders even if they do not have their own resources to do so. Another source of profit can be the sale of additional services (warehouse rent, own FTL, customer support). It is important to choose reliable consolidation partners who have access to the resources of a large number of shippers, so that the consolidation operator can always draw on their experience, infrastructure, and staff.

Outsourcing of logistics services 

Manufacturing or trading companies with their own vehicle fleet can outsource logistics to partners and suppliers and build mutually beneficial relationships with them. The Operational Tool will be useful for those who want to delegate transportation without the common risks of outsourcing services and those who offer such services. Experienced entrepreneurs know how difficult it is to find a reliable provider, avoid reputational risks, excessive costs, loss of quality of the delivery process, and confidentiality of information. All these problems can be solved by combining proven and reliable partners into one ecosystem. 

Retailers

Retailers that have their own fleet of vehicles can automate their logistics operations and generate additional revenue by outsourcing logistics to their suppliers. 

This is possible due to free space in routes on direct and especially return routes. In this case, retailers can offer suppliers turnkey cargo delivery and automation of logistics processes. In this way, they ensure the accuracy, reliability, and timeliness of deliveries to their warehouses and stores. Deliveries will be made in full and on time. 

When retailers take control of the transportation of goods, they optimize the supply chain and do everything possible to avoid delays or errors during delivery. Additional bonuses:

• profit from joint FTL;

• compensation for the cost of returning the vehicle to the central warehouse; 

• reducing the load on distribution centers and the ability to plan the work of the DC. 

Suppliers receive a percentage of savings during consolidation. Faster inventory movement and better inventory management can mean lower transportation and storage costs, fewer touch points, and less damage and spoilage.  

Manufacturers

Manufacturers need to deliver raw materials and finished products. To do this, they use their own or leased vehicles, and thus need high-quality transportation planning and optimization of logistics operations. However, in the process of ensuring the supply chain, they are faced with:

• free space in FTL;

• Lack of reverse loading of their own vehicles;

• expensive LTL transportation.

Using Operation Tool, they can digitize logistics, buy FTL loads at a lower cost, and become a consolidation operator to use their own trucks to transport customer goods. 

Consolidation of cargo is a strategic advantage that allows manufacturers to enter new markets without incurring excessive costs for individual deliveries, remain competitive, and deliver goods to retailers or other manufacturers efficiently and quickly. 

Key solutions of CONSOLID

CONSOLID's digital logistics ecosystem provides participants with powerful tools for effective management of consolidated transportation, access to the operating environment and the Operational Tool. It helps to optimize logistics:

1. Utilization. Allows you to maximize the use of cargo space, reduce the cost of transporting a unit of goods, and increase the profitability of each flight. Example: A retailer can fill the free space in a truck with goods from suppliers, reducing overall transportation costs.

2. Reverse loading helps to eliminate “empty” return trips, compensate for the cost of returning vehicles, and creates additional sources of income. Example: A manufacturer can use its trucks to transport goods from other companies on the way back, turning costs into profits.

3. Groupage cargo. Combines small batches from different senders, optimizes routes and reduces the number of trips, and offers competitive prices for LTL transportation. Example: Several manufacturers can combine their small batches of goods into a single FTL shipment, significantly reducing costs for each.

CONSOLID helps to transform logistics from a cost category into a source of profit and a new business line, enter new markets without excessive costs for individual deliveries, increase competitiveness through faster and more reliable delivery, and reduce risks by working with trusted partners.