Is Freight Consolidation Right for your Business

1. Is Freight Consolidation Right for your Business? Freight consolidation. While the actual meaning of this term is to consolidate small cargo from multiple shippers on a single truck/container and ship it to their common destination, for many people it simply means a cost effective way of transporting their cargo. Everyone knows the fact that the cost of shipping generally has nothing to do with the value of the cargo being shipped, but freight consolidation is preferred by shippers and traders around the world who want to save money by getting high volume freight rates while shipping smaller volumes. Okay… so by now, you know it is an affordable means of transportation and a good idea particularly for shippers who move cargo in less frequency and smaller volumes. But this does not mean that freight consolidation only has advantages to its credit; this mode has a drawback that it may take more processing and delivery time to reach the destination. All in all you can conclude that it is beneficial for smaller shipments but may not be the right choice for every business. Consolidated shipments in sea freight are called LCL (less-than-container load) and inland freight are LTL (Less than Truck Load). When you opt for sea freight, the cargo is consolidated in a 20 ft or a 40 ft container. To calculate the chargeable volume, certain parameters are taken into account, for instance, the dimensions of the pallet, the weight of the cargo and whether or not the cargo is stackable. This means that only if the cargo is up to a certain volume, transporting it via consolidated LCL mode would be economical because there are destination charges aside from the origin charges and ocean freight charges. Also, the shipping charges depend on a per W/M (weight/measurement) calculation, usually 1 ton or 1 cubic meter (cbm); whichever out of the two is higher is considered. Since LCL shipments are charged as per W/M, make sure to compare the total cost of your LCL shipment charges to the FCL option which includes origin charges, ocean freight and destination charges. Ask your forwarder if you need help understanding this concept, or contact us. If the above information has made you question which items should be consolidated and which shouldn’t, you can follow our below written points to decide: Freight that should be consolidated:

2. •Goods which are palletized, bundled, drummed, etc and can thus be loaded without much care. •General merchandise •Goods which neither interfere with other cargo nor are time sensitive, such as auto parts, textiles, garments, etc. Freight that should not be consolidated •Fragile materials are a big NO for consolidation. You may save money by sending it via LCL/LTL consolidation but it may all go in vain if it requires extra handling and time to prevent the damage. •It is best to send temperature-controlled freight separately than sending it with other cargo as consolidation may increase chances of its spoilage or contamination. •Products prone to custom inspection such as cars or motorbikes may delay an entire container from shipping. •Flammable, explosive, hazardous substances or chemicals that may react with other cargo must be excluded from consolidation mode. Now that you know about how charges are calculated and the items to be considered for this mode of transportation, you can decide whether or not it will suit your business. In case of queries, you can always seek help from experienced freight forwarder who can guide you about this mode or the alternatives.