How to Reduce Costs through Combining Shipments

How to Reduce Costs through Combining Shipments

Freight transit and shipping logistics are one of the most difficult aspects of the modern business environment. Companies are inundated with information about urgency, shipping preferences, route configurations, and more. Timeliness is more effective than ever. In an effort to move more products through the market, transportation companies can overlook strategic factors like consolidation.

Intermodal transportation companies that fail to analyze current consolidation patterns miss out on real savings. Over time, the amount of time and effort wasted by failing to combine shipments for optimal transportation costs leads to real, monetary loss. In some cases, companies can save more than half of the average cost of shipping by properly consolidating.

Consumer goods companies today have to compete with large companies that offer free shipping. Excessive shipping costs associated with poorly managed logistics can prevent smaller companies from offering reduced shipping prices or free shipping. Effective consolidation management is the answer to reduced costs at both the small and large business levels. Implementing proactive logistics measures reduces costs for the end client, the shipping company, and the consumer goods company. It’s an overall win for the economy.

Tips for Consolidating Shipment Operations

  1. Invest in outside help – Companies that focus on intermodal transportation logistics like GTG Technology Group provide end-to-end technology solutions that can help shipping companies streamline everyday processes so that shippers can focus on consolidation tactics to save money. These solutions include every aspect of the shipping process from order management to invoicing, carrier interfacing, accounting, safety compliance, and more.
  2. Use a postal consolidator – Large companies have been using postal consolidators for years to improve the cost-effectiveness of shipments. The concept takes the best aspects from private shippers like FedEx and the UPS. Large shipping companies move products en masse. Then the postal service will take over to make individual deliveries, since they travel door-to-door every day anyway. Previously, only large companies have been able to afford to take advantage of the concept.

Now, postal consolidator companies are taking the concept to small businesses. They move products from the source in small increments and into the main consolidation stream so that large consolidation companies can bundle goods going to a certain location. The process saves every party involved from charging excessive shipping fees.

  1. Develop a process for consolidation – A company that focuses on combined shipments from the start can more easily identify areas for improvement and lower costs. Use management systems to monitor areas for improvement. For example, a single shipping company has goods from two different companies that are scheduled for delivery to a single house. Many times, inefficient systems will overlook the address match and the consumer will receive his or her order from different trucks during the day. The shipping company could have easily combined the orders and saved a trip.

Companies can easily improve their overall business model by focusing on consolidation. Implementing a process for consolidation saves transportation companies, suppliers, and consumers from excessive costs. Reach out to GTG Technology Group for more information about how our technology solutions can help you reach your consolidation goals.

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