In terms of shipping, you may have heard about freight consolidation or consolidator. But what exactly do they mean?
The definition of freight consolidation and consolidator in shipping
Freight consolidation is known as a logistics method that a carrier combines partial consolidation (or shipments) inside a specific location into one shipping container. Then the container will head to a destination called waypoint to split the consolidation into smaller shipments. After that, they will be shipped through directly or indirectly to their last locations.
A consolidator is a company specializing in combining cargo shipments from multiple shippers into full container loads. The company can support the shippers by providing them a cost-effective strategy to transport cargo globally.
In freight consolidation, the consolidators support individual export companies to save money. They can cut down on the costs involved with renting and transporting a shipping container that they aren’t able to. With the help of consolidators, this cost is shared among several shippers instead of paying more for an entire container.
Consolidators play a crucial role in not only freight consolidation but the logistics process. The company serves for the sake of both the shippers/consignors and the carriers. They collaborate and serve numerous manufacturers, exporters, importers and carriers. That allows them to create an extensive network in freight consolidation as well as the logistics industry. They identify the needs of these subjects, then connect consignors with the proper shipping companies to accommodate their budget and transportation demands.
How do consolidators work in freight consolidation and logistics?
Shipping consolidators are an essential factor for an online business’ shipping strategy, specially freight consolidation. To give an exact answer to what shipping consolidators do, here is a brief summary of their services and benefits:
Shipping consolidators combine partial loads from various individual shippers into one full load. The combined shipment is then transported as a unit to the local post office at its destination. This method helps shippers to save money in the consolidation process. From there, the partial loads access the local mail stream and are shipped to their final destination.
With the help of shipping consolidators in freight consolidation, you can get shipping discounts which you wouldn’t qualify for otherwise. Consolidator companies can aid you to save time by categorizing, collecting and manifesting your cargoes. They also provide extra services such as insurance and USPS tracking. But cargoes sent via freight consolidation can cause the risk of delay compared to the traditional carriers.
It’s essential to weigh the needs of your customers with the needs of your business when considering freight consolidation. That’s helpful to decide if shipping consolidators are suitable for your business. Analyze what’s important to your customers. Do they need to lower the shipping costs or faster delivery? Depending on each customer, you will offer them proper solutions, so it’s crucial to have shipping options that match.
The roles of consolidators in freight consolidation and logistics?
- Accepting Less-than-Container-Load (LCL) in Freight Consolidation
It can be challenging for small and medium-scale businesses to penetrate international markets. As they often lack the capital and infrastructures which are maintained by trans-national companies (TNCs) and multinational manufacturers. In consolidation activities, consolidators or groupage operators are individuals or companies willing to accommodate the demands of small-scale businesses having LCL shipments.
- Freight Consolidation and Forwarding
As a consolidator may offer not only consolidation but forwarding services, the terms consolidator and freight forwarder are often used interchangeably. Indeed, consolidators and freight forwarders share many things in common. They typically support shippers in several aspects rather than only their title suggests. Many consolidators offer an array of services to enhance the supply chain management process.
Consolidators also aid carriers and businesses identify the most cost-effective and reliable insurance providers, trucking services and export packing services. In freight consolidation, they may organize even the provision of these services. Consolidators can also roll the fees together in an inclusive shipping quote for their customers.
- Facilitating Foreign Buyers & Suppliers
Besides freight consolidation, consolidators provide a wide range of services. It’s hard to articulate their logistics and supply chain management role in the whole logistics industry. Indeed they can serve as brokers, export firms, agents, and even consortiums to provide business with international shipping needs (SMEs).
As an important part of freight consolidation, they receive and manage orders from multinational companies and large-scale foreign buyers. Consolidators also cooperate with local suppliers and manufacturers.
- Assisting SMEs
Consolidators facilitate and assist SMEs in a myriad of ways. They are conversant with the shipping networks, logistics regulations, and commerce rules of foreign destinations. Typically, foreign buyers don’t seek to interact with SMEs directly. Instead, they maintain relationships with consolidation companies and brokers who can bring them an assortment of shipments from various SMEs. These foreign buyers rely on the consolidators to ensure the quality of the goods and safety of the shipments.
- A Vital Force in Global Logistics
Consolidators work as both foreign and local businesses. They are an integral and significant element of freight consolidation,supply chain management and logistics. Whether it is air, sea, rail, or road freight, consolidation services are instrumental in reducing costs. The reason is that it’s able to overcome transportation barriers and challenges, and identify efficient shipping solutions for SMEs.
WeDo Forwarding takes freight consolidation a step further by applying the power of digitization. Our company provides all the benefits of a freight consolidator, with the ease and simplicity of a purpose-designed online platform. You can get LCL quotes, book, pay, and track your shipment effortlessly through our 24/7 online access.
