If you’re a company that ships products, you need to learn about all shipping options available to you. This allows you to manage your costs better while keeping your product moving. When applicable, freight consolidation is an option that can save on your shipping. There are also many other benefits to consolidation. We’re here to help you better understand what freight consolidation is and what it can offer your logistics.

WHAT IS FREIGHT CONSOLIDATION?

Freight consolidation is when a shipper combines multiple shipments within a region into a single load hauled by a carrier to a destination region. The load gets broken down into smaller parts and delivered by a regional carrier to their many destinations. Or vice versa, they get picked up by a regional carrier to merge into a single shipment and delivered to their destination. Freight consolidation is ideal for shippers who frequently move a few pallets or smaller amounts of product. 

WHAT ARE THE BENEFITS?

Savings

Often, shippers will only use half or two-thirds of a trailer but still pay for the entire space. Whereas, with freight consolidation, you can earn preferred rates and optimize your logistics. Most importantly, you save time and money. 

By consolidating your smaller, regional freight, you can avoid paying a higher rate. By shipping your freight all at once instead of sending loads individually, you’re able to pay bulk rates. 

You can also avoid the costs that come along with using storage sites, inventory management facilities, and your own fleet of vehicles. Freight consolidation providers can provide these for you to better manage your shipment until its delivered. You won’t have to store your shipment on your own. Instead, you’ll be able to send it to the facility where it will ship to your retailers. This will help streamline the process should you need more inventory. 

Taking it a step further, you’ll also have fewer trucks on the road. As a result, you’ll be spending less on fuel and spending less per mile since it will be on one truck instead of many. The savings can be significant enough to make a big difference in your company’s bottom line. This can be a real difference for mid-sized and smaller businesses that see their profits cut by their shipping costs. 

Reduce Risk

You’ll also see increased security. Damaged freight continues to remain a lingering issue for shippers. Things happen in shipping and can be the reality of doing business. Consolidated shipping is not only more cost-efficient, but it reduces the on-again, off-again handling of your freight. Ultimately, when using an experienced shipper and consolidating your freight, your products will be in safer hands. 

And not only that — it will be in those hands less often. Having your freight consolidated also means that it will be on fewer trucks, making the odds smaller of it being in an accident. 

It goes beyond safety too. Freight consolidation also benefits through added reliability. Because your product is handled less, there is a lower risk of something going missing or delivering to the wrong place. There’s also less of a chance that something will interrupt your delivery, causing it to be late. This all adds up to you gaining peace of mind and having happy customers on the other end of your shipment. 

Improved Flexibility and Time Management

Freight consolidation will improve the flexibility of your shipping needs and make your orders more timely. Freight consolidation often offers faster transit times and reduces wait times for transporting small loads. By storing your freight at a consolidation facility, your products will be ready to go when needed. This improves your timeline and inventory flexibility, which your customers will appreciate. 

Changes happen in orders and can throw things into a real mess sometimes. Yet, freight consolidation will not hinder your ability to get your products to your customers on a short turnaround. Through a consolidation strategy, you can get your freight delivered on your schedule. Expert providers will help you put a plan into place so your freight gets on a truck and the road while better utilizing truck space and time.

Better Visibility and Control

With consolidated shipping, your visibility improves, as does your control. Let’s say for some reason, quality control alerts you that there’s a problem with your shipment and it’s already been shipped. Normally, you would have to wait for the supplier to send a replacement, meaning your delivery timeline is now out of your hands. In contrast, consolidation allows you to perform quality control measures as soon as the product reaches the warehouse. This reduces the chances of losing time and control due to unforeseen problems.

Using freight consolidation also gives you more control over your due dates and production schedules. You’ll be able to manage the entire distribution chain on your own or with a logistics partner. 

Improved Relationships

This process not only benefits you but your customer or retailer too. By shipping smarter, you’ll be able to build better relationships with other companies, customers, and your carriers.

First, you can establish relationships with other businesses that use LTL shipping. If you find another company that ships a similar product or sized load on the same schedule to a shared retailer, you can establish a shipping partnership. This partnership can help reduce costs for both of you and build smarter loads through shared freight consolidation shipments.

As for your customers, they’ll appreciate that you’ve gotten together for more efficient shipping since they work with both companies. They’ll also appreciate the savings that freight consolidation provides. 

Having the right carrier relationships will make it all happen for you. You’ll need a carrier relationship you can rely on to manage your orders and make sure products deliver on time. Perhaps your products have special needs that your carrier will have to accommodate. Not having a good relationship established won’t reassure you that your shipment will turn out fine. Having consistent relationships with carriers can also lead to you receiving better pricing. 

CHALLENGES WITH CONSOLIDATION

Finding Carriers

Because freight consolidation can seem complicated, not all carriers are willing to haul them. Even when you can find a carrier willing to transport your consolidated shipments, be sure that you are well-informed and charged appropriately. Partnering with a third-party logistics company (3PL) can help assure you find a carrier to haul your shipment and get a fair rate for it.

More Time Planning

Although it can save you time transporting, consolidated shipping does need some extra time spent organizing and planning. You’ll need to be aware of factors such as pricing, dimensions, timing, and other specifics to guarantee that your shipments arrive both safely and on time. 

WHAT’S HOLDING YOU BACK?

Freight consolidation can save you headaches. There are many businesses using freight consolidation to help streamline their shipping process, get products to their customers faster, and help to build and maintain relationships. However, it’s crucial you have a complete understanding of how consolidation works to ensure proper delivery. 

One of the best practices of consolidated shipping is to use an experienced provider. By working with an experienced provider, you’ll be able to overcome the challenges that come with freight consolidation and solely reap the benefits. 

Luckily, here at Trinity, we’re experts in freight consolidation. By working with Trinity, you’ll gain peace of mind knowing your shipments are taken care of. Our Team of experts can help you plan and organize your shipments, recommend freight consolidation when it’s suitable, and you’ll gain access to our vast network of carrier relationships.

If freight consolidation is a shipping method you’re interested in but need guidance on, we’re here to help.

AUTHOR: Christine Morris

It can be challenging for you to decide the best way to transport your products. Fewer decisions are bigger than deciding whether to operate a private fleet or outsource. On the surface, private fleets appear to be the better option, but you must recognize and understand all that goes into running your own transportation. Some companies believe operating a private fleet gives them more control over the business and operating costs. In contrast, others find that outsourcing their transportation gives them better insight into the market while reducing costs and creating efficiencies. So, which is better? Private fleets or outsourced logistics?

PRIVATE FLEETS OR OUTSOURCED LOGISTICS?

Well-known household names like PepsiCo, Sysco Walmart, and Tyson Foods all run successful private fleets. According to FleetSeek.com, a database of trucking operations, 344,657 private fleets are operating in the U.S. compared to 169,498 for-hire carriers and 203,068 independent owner-operators. So what drives companies to choose a private fleet or outsourcing?  

The idea of having your own private fleet to deliver your goods is alluring. On the one hand, you can retain complete control over your supply chain by operating a private fleet. But this can come with staggering costs and resources spent. The time and costs of managing a fleet may not be worthwhile for some companies. On the other hand, it can be difficult for those running and operating their own fleets, especially if it’s not their core focus. While the pandemic has had a small hand in encouraging companies to move away from managing their own private fleets, many of the real motivating factors are the plain challenges that come with operating your own logistics and transportation.

PRIVATE FLEET CHALLENGES

Running your own fleet is a very asset-heavy business on its own. It requires a lot of capital investment in tractors and trailers along with other costs of technology, maintenance, insurance, driver pay, and more. Drivers are in short supply already, so finding a backup for sick drivers or losing drivers puts private fleets at the risk of losing capacity. Motor carrier insurance costs have been on the rise as well. Where a large trucking company could spread increased costs across a range of equipment and business segments, a small private fleet does not have that flexibility.

DRIVER RECRUITMENT AND RETENTION

Driver recruitment is one operation of running a private fleet that you have to consider. Finding talent behind the wheel is an even more significant challenge lately with the driver shortage and driver-related issues are a current top concern of private fleets. According to the American Trucking Associations, the driver shortage hit 60,800 at the end of 2018. Current trends point to the shortage growing to over 160,000 drivers by 2028. In addition, a recent ATRI analysis of census data on employment sectors shows that the trucking industry has the lowest percentage of young entrants and the highest percentage of aging workforce entrants.

In a recent survey by the National Private Truck Council (NPTC), more than a third of all challenges private fleets face are driver-related, like aging drivers and their retirement, recruiting, turnover, hiring, and retention. With the ever-surging freight demand and a growing labor shortage, private fleets must work even harder to recruit and retain drivers. In addition, private fleets must fight with for-hire carriers over drivers as they are working even harder to attract drivers from fleets with more money, better equipment, and better routes for more home time.

COSTS

Many companies want to operate private fleets to manage their transportation costs; however, many more costs go into a private fleet. First, there are the upfront capital expenses, which can be expensive when starting out. You also have to consider fuel, insurance, driver pay and benefits, licenses, certifications, permits, technology like ELDs or software applications, training, and drug testing. There are also unanticipated costs to plan for, like liability costs for any accidents or claims. According to a study by the FMCSA in 2006, the cost to a company for a non-fatal injury crash averaged $195,258, while the average cost of a fatal crash was $3,604,518. In addition, costs for private fleets are rising with the increasing costs of fuel, insurance, and equipment maintenance as new and used trucks deal with material shortages.

CAPACITY

Many companies want a private fleet to have easy access to the capacity to haul their freight. However, having just the right amount of available equipment and drivers is tough to decide. Often you’ll find that you either have too much equipment sitting when you’re slow or too little to cover orders when demand is high, leaving you to use the spot market to cover shipments that need to go out. There are always ebbs and flows to business. Even when planned there will be times when equipment is underutilized or there won’t be enough.

TIME SPENT ON TRANSPORTATION

One drawback to operating your own fleet is the time you must put into it. You have to arrange the shipments, make sure you have drivers, cover backhauls or find coverage when you don’t have enough capacity of your own, maintain regulations, insurance, and more. The constant monitoring and configuring of your own transportation demand a lot of time – time that could instead be used for revenue-generating tasks.

PRIVATE FLEET BENEFITS

There are many benefits to running your own private fleet, such as;

KEEPING CONTROL

If keeping control over your transportation is something you need then operating a private fleet is for you. By choosing not to outsource your transportation, you’ll have complete control over your supply chain. You’ll know that you always have capacity available, even when the market is challenging. You won’t have to spend time searching for available carriers or negotiating rates, and you’ll keep control over service levels since you’ll have company drivers and equipment readily available.

CUSTOMER SERVICE

In the previously mentioned NPTC survey, more than 92 percent of respondents said that customer service was the main reason they had a private fleet. Other factors included flexibility, reliability, dependability, and a desire to put their employees in front of customers. With these factors in consideration, some companies view their fleet as a core competency.

SAFETY

Safety performance is another benefit to private fleet operators. According to the Department of Transportation’s (DOT) crash data, drivers in private fleets have shown to be three times safer than the overall trucking industry.

FLEXIBILITY

Additionally, you’ll have scheduling flexibility. Rather than depending on a for-hire carrier to pick up and schedule shipments, private fleet operators set the schedule themselves, giving you more control over on-time deliveries.

BRAND AWARENESS

Lastly, there’s the marketing aspect to consider. Private fleet trailers essentially act as “rolling billboards” for your company.

OUTSOURCING BENEFITS

In the 2019 Third Party Logistics survey by Korn Ferry, 63 percent of shippers said that overall, shippers are increasing their use of outsourced logistics. Taking into account the pros and cons of a private fleet, it seems some companies find that outsourcing their transportation suits their needs better. There are many benefits to outsourcing your logistics, such as;

FEWER COSTS

In comparison to private fleet costs, there are very few costs to consider when outsourcing. You don’t have to worry about the cost for the labor of drivers, their insurance, their certifications, driver recruiting, vehicle maintenance, fuel costs, and more. The only actual cost you have to worry about is the cost of having your freight transported.

MORE TIME

Since you won’t have to worry about the many time-consuming tasks of your own fleet, you’ll have more time to focus on your business versus your transportation. In addition, your employees will focus on revenue-generating tasks instead of all that comes with managing transportation.

CAPACITY

Even though private fleets come with some on-demand capacity, when outsourcing your logistics to a third-party logistics provider (3PL), you can be assured that you’ll have access to capacity that you wouldn’t have otherwise. 3PLs take care of all the relationship-building, growing a larger network than you could manage, and take care of covering your shipments for you. There’s no worry about finding available carriers or making sure you have available drivers and equipment. It is all taken care of for you.

OUTSOURCING CHALLENGES

Even though there are many benefits to choosing to outsource your transportation needs, there can be some challenges that come with it.

LOSS OF CONTROL

Some people aren’t fans of losing control. When choosing to outsource, you will lose some control of your provider selection, customer service, and rates paid on shipments. Sounds scary, right? That’s why if you’re choosing to outsource, make sure you find a reputable provider that you can communicate your wants and needs. Find one that will keep an open line of communication with you as your relationship grows so that you fully trust them and be okay with letting go.

LOSS OF VISIBILITY

This solely depends on the provider that you choose to work with and what they offer. Find a good provider with technology applications or processes in place to keep you informed. You may even find a provider that has options to give you more visibility than you would have otherwise.

MANAGING THE RELATIONSHIP

Time and effort must be invested when developing good working relationships. Your chosen providers must share an understanding of your strategy and provide you with innovative solutions to give you a competitive advantage. It may take time to be in alignment.

TECHNOLOGY INTEGRATION

If choosing to outsource and make use of a provider’s technology, your IT teams must integrate applications and systems. Make sure your IT teams are capable of doing so and that your provider will provide assistance in the integration.

PRIVATE FLEET OR OUTSOURCING OPTIONS

Companies that don’t want to manage their own fleet have a couple of options when it comes to outsourcing. For one, there are dedicated services. This is an option if you already have a private fleet of your own. Essentially, you convert your private fleet to a transportation company so that they now belong to the transportation company but remain dedicated to serving you first and foremost. Some transportation companies may even let you keep your branding on the truck. This is a nice way to have more control but less responsibility. 

Another option is outsourcing to a 3PL completely. They will take complete control and responsibility for your logistics management. You’ll still have access to capacity, reduced costs, and excellent customer service; however, you’ll lose the benefit of your brand on trucks. This option allows you to COMPLETELY focus on your core business.

Looking to have the best of both worlds? There is certainly nothing holding you back from having a mix of a private fleet and outsourcing. Some companies, like Giant Eagle Supermarket, prioritize their private fleet but also use outside carriers for less critical shipments. As a result, they’ve found an advantage to mixing both services.

FIND WHAT WORKS FOR YOU

Regardless of the choice you make, getting your product to customers has never been more challenging. The driver challenge continues to be a problem, capacity remains tight, and freight rates remain high. Though we may be partial to outsourcing, you should look to find a solution that works best for your company.

Be sure to ask yourself these questions when deciding whether private fleets or outsourced logistics is best for your company:

• Are my transportation needs complex?
• Do my shipments require the coordination of multiple stops, complex routes, or specialty shipments?
• Is my organization struggling to hire and retain drivers?
• Do we own more trucks than needed on a regular basis?
• Would managing my own fleet take valuable time away from employees or money from revenue?

If outsourcing some or all of your transportation seems like a good solution, consider Trinity Logistics as your provider. With over 40 years in business and Burris Logistics as our parent company, we consider ourselves experts in logistics, especially in more complex or specialty shipments.

We can help you with capacity through our extensive network of carrier relationships available. We have best-in-class technology available to meet your needs and help you with your business’s growth. We work with several modes and through our People-Centric approach, offer you guidance on when and what solutions you should use. You’ll find that when choosing Trinity Logistics as your provider, when given the chance to prove our commitment to great service and communication, we set the bar high.

Author: Christine Morris