Multiple industry publications have suggested that available trucking capacity was going to burst by the end of 2024, and time has revealed multiple disruptions that threatened the future of the trucking industry. According to DAT Trendlines, August 2024 spot load posts are down 19.6% compared to last year. Van Load-To-Truck posts are 8.4% lower for the same period. While the volume of trucking capacity has tightened, rates suggest that overall capacity is similar to 2023. Carrier Details data updates have also shown that the number of new trucking companies applying for and receiving DOT authority has declined.
Meanwhile, shippers face a mounting need for more capacity, stakeholder expectations for reduced costs, and overall strategic planning. The answer – freight consolidation, which is the process of combining multiple smaller loads into larger shipments, such as small packages into less-than-truckload (LTL) and multiple LTL loads into full truckload (FTL) where possible. While the initial savings all seem to focus on space, let’s consider the other benefits of putting freight consolidation to work in your supply chain.
Reduced costs
Cost savings is a direct benefit of improved space utilization in trucks. Running with fuller trucks increases the profitability per load for carriers. Reducing wasted space is actually how less-than-truckload originated, putting carriers in the role of consolidating routes and space to run with a fuller load. However, shippers that implement a freight consolidation program for small shipments are technically taking on the role of LTL carriers. In turn, they enjoy reduced costs via more FTL loads compared to LTL and more LTL loads compared to small packages. Consolidation savings can also add up quickly, up to $4000 saved in less than one week after implementation for one of our clients.
Improved sustainability
Another factor driving interest in consolidated shipping is sustainability. Fuller trucks mean fewer trucks needed to move the same amount of freight, reducing net emissions, and fewer stops for loading or unloading amount to less fuel wasted in idling trucks. Of course, the bottom line is to make things easier and more scalable. Consolidated shipping within the distribution chain also simplifies the issue of planning for more pickups and deliveries.
Better customer service
Streamlining logistics with your consolidation center operating at peak efficiency will help shippers manage the entire shipping process. Why does that matter? Spending less time managing logistics leads to improved customer service through reduced complaints, confusion, or delays.
Plus, the lower shipping costs from consolidating freight could be passed along as reduced product price points for your customers, resulting in even greater customer satisfaction.
Everyone loves lower prices, am I right?
Risk mitigation
The faster transit times of consolidated freight also play directly into risk mitigation. Since the load is subject to fewer stops, it may arrive faster. Similarly, drivers and dock workers who don’t worry about unloading multiple smaller shipments are less likely to make mistakes. It may seem strange initially, but sticking with it and learning how to consolidate your freight will make increasing throughput much easier. Although you have more touchpoints earlier in combining multiple smaller shipments into a larger load, consolidation is another step that makes transportation and logistics management better together.
For example, let’s imagine that we’re combining multiple pallets into a single shipment at your Dallas location. Then, you need to combine multiple shipments in San Antonio. The loads are then slated to be combined into a full truckload at another Oklahoma City for final planning to ship as a single load to Omaha. If you had opted for LTL for each shipment, you would have touchpoints at each location and final touchpoints for transfers to individual retail locations. However, combining the loads earlier in the journey results in less risk for damage to individual packages from the Oklahoma City to Omaha leg.
Now, this example is used across much larger distances than what might occur if you had multiple, not-so-large distribution centers in a closer radius.
The trick is to ensure drivers spend more time on the road and less time worrying about planning more stops and unique pickup/delivery processes. Of course, visualizing the data and having complete insight into all freight via a TMS and API are critical to turning this idea into a reality. The result is the same – less risk in logistics.
Put the power of freight consolidation to work with IL2000 by your side
There isn’t a one-size-fits-all approach to managing the entire distribution process, at least not in-house for most shippers. The exact needs of one shipment will vary until it reaches its destination. The uncertainty in the market also means shippers are inclined to increase the number of full trucks on the road and the amount of time freight is actually in transit. Fortunately, there is indeed a simpler way that hoping for the best – working with a logistics partner who gets the importance and value in freight consolidation. IL2000 can help you assess your supply chain and put a consolidation program into place.
Speak with an IL2000 expert to get started.