What is cargo consolidation and why is it important for your business?
In recent years the Cargo Consolidation and thanks to services and facilities that international freight forwarder companies, such as Top Shipping provide, there has been a major advancement in international trading. Cargo packaging, storage and handling have been improved and different methods have been developed to help on reducing the cost of transporting cargo. On the other hand, containerisation has been developed and made a significant effect on the international training advancement. A shipping container has a standard size, ranging between 20 and 40 foot in length and about 8 feet in width. Based on the number of container that freight occupies, freight rates would vary. However, not all companies are able to fill the entire space of a container. This will result in loosing a lot of money on several shipments that non of them can fill the entire capacity of a container.
Cargo consolidation is the solution
Cargo consolidation is not a very complicated concept: It is basically when freight from one or multiple shipper is combined together and is transported as one large shipment. In practice, the procedure of consolidation involves different steps. It begins with organization or consolidation. In this step different cargo that belongs to two or more cargo owners are organized into one single shipping container. International freight forwarder companies, such as Top Shipping, are usually responsible for this step. They have to take care of all the risks, paperwork and further regulations by providing services, such as freight insurance, in order to ease the entire procedure. In the last step the freight in a single container will be processed for export.
Generally, cargo consolidation can be a fantastic option for those shippers who have only a few pallets of goods and products or smaller shipments to be exported. On the other hand, sometimes these shipments may come from different locations or multiple suppliers. Therefore, they need to be combined in a single shipment in order to avoid extra expenses and higher rates. After choosing a consolidate shipment service of a freight forwarder company, your freight will be brought to a consolidation warehouse. In this place all the freight will be put together in a single pallet. Later these pallets will be organized into one container to be proceed for shipment.
Cargo consolidation is a an economically friendly solution which can help business owners and companies, especially those small to mid-sized ones, to provide their services regularly and at better prices to their clients and target markets. The latter is possible through shared expenses with other involved cargo owners. In addition to that, cargo consolidation has several other advantages as well.
Top Shipping as a successful international freight forwarder company provides cargo consolidation service to its clients. With this service, Top Shipping ensures the continuity of our clients business. The latter is due to the fact that exporters would not need to wait until they generate enough freight to meet the capacity of a container. We at Top Shipping provide facilities through our cargo consolidation service with which our clients will be able to ship their products in smaller quantities and maintain the regular flow of their business.
Despite all the advantages of cargo consolidation, this method has its own disadvantages as well. The most important drawback of this method is that, there would not be an exclusive space available in container to one exporter or cargo owner. In addition to general complications, freight may also be under the risk of damage or contamination from other freights. This is especially expected when freight from multiple sources in a container is without proper lashing and is not homogeneous. It is good to mention that, de-consolidation process can also be risky for your freight due to technical issues. Expert international freight forwarder companies, such as Top Shipping, are experienced enough to be familiar with these risks. Facilities, such as cargo insurance, that these companies usually provide to their clients can potentially reduce further possible financial penalties and complications.
The Do’s and Don’t s of Freight Consolidation
A correct process of freight consolidation can offer a number of advantages to costumers and shippers. Freight forwarders can save money on fuel costs and provide their services and products with cheaper total shipping costs. In contrast, in case of wrong bundled of shipments together, the consolidation can easily lead to a disaster. Here we list some of the most important do’s and don’t s of cargo consolidation that a freight forwarder should follow.
Cargo that can be consolidated
- General merchandise
- Those merchandise that are packaged on pallets or skids and can be easily loaded without extra care
- Those type of cargo with inventory costs. Costs of these types of freight can outweigh the transportation costs, therefore they can be counted as emergency, such as: products that need to be delivered in a certain time or customized computers.
- Textiles, auto parts, garments and technology products that are packed properly and are unlikely to be dangerous to other cargo or to be time sensitive.
Cargo that can not be consolidated
- Chemicals that can be potentially dangerous for other freight as accidents can trigger hazardous chemical reactions.
- Temperature sensitive cargo. It means those types of cargo that have to kept in a precise temperature to avoid contamination or spoilage. These types of cargo should always be shipped separately.
- Products such as cars or boats that have to be checked due to their VIN number and it can result in delay for entire container.
- Fragile or bulky merchandise. Consolidation is not a proper solution for those types of freight that due to their size, require extra time and effort for their shipment and presentation of damages.
After determination of your suitable merchandise you can consult with Top Shipping for your freight consolidation. An experienced freight forwarder company, such as Top Shipping, is capable of controlling your cargo proactively at the origin, during transition and at the destination. Our team has the capability and knowledge to coordinate options once disruption or any other types of failures occur. Our expert and educated team at Top Shipping can also identify those freights that need special packaging or consideration. The latter can save our clients from further financial penalties by reducing the risk of damages.
Potentially, freight consolidation service can reduce shipping costs drastically. This can not happen unless after careful consideration and planning. With reliable service and a solid reputation, Top Shipping offers cargo consolidation services that can deliver superior results.
What are the advantages of cargo consolidation?
The most important advantage of cargo consolidation is its cost effectiveness. Using this service, your company and business will get bulk rates and therefore, will be able to save a lot of money per shipment. The per-mile costs that trucks usually have to pay, is regardless of the cargo they are transporting. Many companies offer LTL shipments as a service to make product transportation convenient for their clients. However, this service increases the per unit cost of products that are shipped. By choosing the cargo consolidation service, your company will take the advantage of a 3rd party logistics which can reduce the shipment prices for your company, significantly. On the other hand, if your company needs to purchase raw materials from different locations, the cargo consolidation service can ease the entire procedure and save money for you. These materials can be sent to a consolidation warehouse and with lower prices can be delivered to your manufacture sites.
Some of the suppliers, like Chinese manufacturer, normally sell minimum quantities of their products internationally. By using the cargo consolidation service that we at Top Shipping provide, you can also have the opportunity of trading with suppliers that require full container load minimum orders. With this service, you would not need larger orders. You can combine your order with your other separate small shipments or even in combination with freight of other cargo owners to reduce the prices.
By using the cargo consolidation service that freight forwarder companies such as Top shipping provide, you will have access to services of logistic team of different retailers and wholesalers; in other words, to the entire distribution chain. Managing the freight shipping process and controlling the cargo during the shipment is an essential issue which can be costly due to the lack of relationships and collaborations. Thanks to the communication channels that we at Top Shipping have, we can help our clients to build relationships and collaborations with customers and distributors alike from all around the wold. Top Shipping communication channel involves many different countries, such as USA, UK, Canada, Malaysia, China, Australia and middle east.
Cargo consolidation service that Top Shipping provides, is not only a solution for reducing minor costs but also capital costs can be reduced with this service. Significant capital costs, usually due to transportation vehicles, extensive inventory managements or storage sites, are inevitable through a freight shipping service. The cargo consolidation service can not only reduce the transportation costs but also your company, along with other involved businesses, can share the cargo management during the procedure of shipping. By taking the advantage of services that international freight forwarder companies, such as Top Shipping provide your business can reduce these significant costs as well.
Along with a better transportation, cargo consolidation services also can provide inventory flexibility and time line in your business. By storing freight in consolidation warehouses, you can have fluid cargo-ready dates and therefore you can serve your clients or the general market in a better way. This also will reduce delays due to complications which can pop up during the production process. On the other hand, you will prevent dead inventory in your manufacture site or domestic warehouses. The free up inventory space and prevention of domestic complications of cargo distribution are other advantages of cargo consolidation service that Top Shipping provides.
The last but not least advantage of cargo consolation is management of risk tasks. This is the main job of international freight forwarder companies. They have knowledge and experience which is needed to manage any complication or damages that may happen to your cargo during the freight shipping service. However, the cargo consolidation can ease the procedure and ensure your company on safe and fast delivery of products to your clients. As mentioned before, cargo consolidation service provide you the opportunity of rapid cargo delivery to your clients. If in the shipping procedure, and through the controlling phase of cargo, you notice a problem in your freight, you can soon enough order another freight shipping service and deliver it to your client or market in the shortest time possible. Compare this situation to the one in which you are not using a cargo consolidation service and therefore, you have to wait until your inventory meets the capacity of another container. In this case, the time line of delivering products to customers would be out of your hand. Not only your company would loos its reputation and customers, but also you will face a lot of additional costs to return damaged cargo, as well.
As mentioned before, not all types of cargo can be benefited by cargo consolidation. It is highly suggested to consult with your freight forwarder company to see if the benefits of this service can outweigh the potential risks for your company or business. Those business owners who are looking to improve their supplier options flexibility or the cash flow of their business can consider cargo consolidation as one of the best decisions that they can ever make.
Top Shipping, as an international freight forwarder company, has years of experience in providing different freight shipping services. Thanks to our educated team and international collaborations, we are capable of providing best freight shipping services, such as: air freight, sea freight, freight insurance, warehousing and distribution as well as cargo consolidation service. We at Top Shipping will spend exclusive time on providing the best cargo consolidation service based on your freight’s type. Our expert team will also suggest you further solutions in order to reduce financial risks and help you to serve your clients all around the world in the best way possible.