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What is Cargo Consolidation? How Does It Work?

Consolidated shipment is a frequently used transportation method. When your goods cannot fill the entire container, consolidated shipment is the most economical choice. What are the advantages of freight consolidation? How does it work? We’ll go into the details in this article.

What is cargo consolidation?

Freight consolidation is a fairly simple concept; it is just a shipping service that combines multiple shipments into one container. It is divided into direct consolidation and transfer consolidation.

Direct consolidation means that the cargo in the container is unloaded at the same port and is not unpacked before arriving at the destination port. Transfer consolidation means that the goods in the container are not from a unified port, and need to be transshipped or unloaded in the middle of transportation. Due to the different destination ports, the waiting time for goods is longer, so the freight is more expensive than direct consignment.

shipping boxes loaded at the back of a truck

Booking the whole sea or air space can be extremely difficult for businesses handling shipping alone due to a lack of volume. However, the outsourced freight forwarder can offer this service.

For instance, freight forwarders have the ability to aggregate goods from different suppliers. The goods will be sent to the freight forwarder’s own warehouse, packaged, and labeled. According to the type and destination of the goods, the goods in less than one container are packed in one container according to the same classification. And the cargo can enable the sharing of trucks going to the same region. They also give a discount on shipping to reduce your cost.

In general, a cargo consolidation is a fantastic option for a person who has a few pallets and small amounts of cargo.

What are the types of freight consolidation?

1. Air freight consolidation

The air waybill issued by the air transport company is called the MAWB (master waybill). It is the basis for air transport companies to handle the transportation and delivery of goods and is a contract of carriage concluded between airlines and shippers. Each batch of air-transported goods has its own corresponding air waybill.

Air freight consolidation means that when the freight forwarder adopts the form of the centralized consignment (the freight forwarder assembles multiple tickets into one ticket and delivers it to the airline) to deliver the goods to the airline, the airline issues an air master bill to them. It means that the goods of multiple exporters are handed over to the freight forwarder, and the customs declaration is unified.

2. Ocean freight consolidation

Ocean shipping methods are divided into FCL and LCL (ocean freight consolidation). What is the difference between them?

LCL (Less than Container Load) is a cost-effective choice for small cargo. In the LCL shipment, the small parcel does not fill with an entire container and varies shippers are sharing one container. And the shipper needs to pay for the space occupied by cargo.

The work of cargo assembly, cargo classification, sorting, centralized packing, and delivery shall be carried out at the terminal container freight station and the inland container transfer station.

FCL (Full Container Load) refers to the cargo fill with the whole container. The clients only pay for one container even if your cargo is scattered. This type of shipment usually has a flat rate per container. Unlike LCL, FCL shipments are loaded and sealed at the origin by the supplier or manufacturer.

lcl and fcl shipping

3. LTL consolidation

LTL shipping mode refers to a strategy that combines different shipments into one truck. It is difficult to book a place from the truck company if bulk cargo, so finding a reliable freight company is very important. They have the ability to aggregate cargo from different suppliers, and can solve the problems in the transportation process.

What are the benefits of consolidation in logistics?

Cost savings. Order consolidation means that you will reduce the waste of resources. You only pay for the space that the cargo takes up. For example, the cargo only takes up half the space, so you only need to pay half the cost. And it reduces the waste of packaging materials such as boxes.

1. Reduced damage risk

Although the fright has improved in all aspects, the cargo damage has always been a headache. Cargo consolidation can avoid this problem effectively. Packing the cargo in a container by category that is classified according to type and cargo destination, reduces the risk of movement and damage to the goods, and can preserve the interests well. With fewer touches, the risk of damaged cargo is significantly lowered.

2. Shipping options and flexibility

The expedited LCL transportation plan can meet the customer’s transportation time. For example, if the demand for the product surges during transportation, contact the freight forwarder, and they can change the transportation plan for the customer at any time and change another container. Flexibility in delivery is guaranteed.

3. Enhance customer experience

Under the consolidation mode, the supplier can optimize the supply chain to get a smooth shipping process. It means that the customs can receive their orders quickly.

What are the shortcomings of consolidation in logistics?

1. Long timeliness

Since it is necessary to fill a whole container of goods for consolidated transportation, if the exporter’s goods do not meet the transportation conditions, they need to wait for other goods to fill a container together.

2. Low customs clearance rate

LCL goods are more complicated, and there are many procedures for customs approval. Once one of the goods fails to meet the requirements of the customs, the other goods cannot be transported immediately.

What are the best consolidation shipping services ASL offers?

It is hard to find a reliable shipping partner that can save you headaches. By working with an experienced agency, you will be able to build a trusted relationship with your customer and smooth your shipping process.

Luckily, you will enjoy the perfect consolidation service at Airsupply. Our team of experts will plan and give a reasonable price according to the shipment. The consolidation service we optimize includes:

1. The best consolidation discount
2. Dangerous and sensitive cargo shipping
3. Consolidated shipping by air, ocean, and road
4. Clear customs smoothly
5. Ship bulk goods to Amazon FBA

Contact us and let us know your most specific logistics needs.

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