Is Freight Consolidation Right for Your Warehouse?

Third-party logistics services, or 3PLs, are essential for some warehouses because they help make up the core of organizational processes. From freight consolidation and management to distribution management and recovery logistics, third-party logistics providers offer a range of important services designed to help warehouses operate more efficiently and increase profit potential. In this guide, learn about freight consolidation, one of the more popular types of logistics.

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What is Freight Consolidation?

Freight consolidation is a type of logistics that involves combining various shipments into a single shipment. In other words, instead of multiple small deliveries to the same location, a single bundled delivery is made. Because fewer shipments are sent, freight consolidation offers several benefits.

The Advantages of Freight Consolidation for Warehousing

Using freight consolidation offers benefits to both the freight forwarder and end customer. The most obvious benefit is cost savings. Because warehouse freight consolidation bundles small shipments into a single shipment, the process reduces the overall transportation fuel costs for the shipper. With lower total shipping costs, retailers also save money, enabling them to charge the end customer less.

When using a 3PL’s freight consolidation services, a warehouse also benefits from the provider’s dedicated fleet, as opposed to investing in an internal trucking system. A 3PL’s fleet doesn’t require the capital necessary to operate a dispatch system, train drivers and ship materials. This enables the fleet to ship freight according to regular schedules in the most efficient and economical way possible.

Using consolidated warehouse freight management also provides access to the entire distribution chain because many 3PLs have existing relationships with both warehouses and retailers. This access can help your business build relationships with distributors and customers alike. Other benefits of freight consolidation include:

  • Quicker delivery times
  • Improved visibility into your orders
  • Pricing simplicity
  • Higher service levels
  • Less congestion at the loading dock
  • Greater sustainability
  • Increased control over due dates and production schedules

Is Freight Consolidation Right for my Warehouse?

Freight consolidation services can help any warehouse or distribution center. But choosing the right one for your business is important to ensure you reap the benefits you expect. Before choosing a freight consolidation service, consider the 3PL provider in regard to:

  • Experience in freight consolidation
  • Network of agents and business partners
  • Transportation options (i.e., shipping via air, rail, ocean and truck)
  • Customer service reputation
  • References

Learn More

Using freight consolidation services in your warehouse can help save money, improve delivery speed and satisfy customers. Take the time necessary to vet the 3PL service properly beforehand to ensure the provider offers the level of service you require. Learn more about how to manage your industrial properties with the help of Prologis.