E-commerce fulfillment calls for smaller, more frequent orders. Here’s how consolidation can help.
Any supply chain manager can tell you that shipping products at high volume cuts down on handling time and reduces costs overall. However, the rise in online orders means that retailers are increasingly required to make more frequent shipments — and at a lower volume.
In the growing e-commerce economy, this fulfillment-oriented shipping trend makes sense. After all, online platforms such as Amazon have made it easier for consumers to order business-to-customer goods on a regular basis, something that’s placing a strain on supply chains that are used to handling larger orders in traditional brick-and-mortar settings.
For retailers hoping to meet consumers’ demands — and to prepare a long-term fulfillment operation that can scale as e-commerce dominates — consolidation may be the ideal solution. While consolidating shipments effectively can be difficult for small- to mid-sized businesses that have limited resources of their own to devote to in-house shipping solutions, logistics providers are well-positioned to combine orders, reduce costs, and add value over time.
Through consolidation, retailers can more easily move higher volumes of orders throughout their supply chain. The practice saves time and money by reducing congestion at loading docks, making better use of cargo space, and streamlining final delivery. And because consolidation requires less product handling — in that items have fewer touch points from the beginning of the supply chain to its conclusion — products are less likely to arrive damaged. Since this places less strain on reverse logistics infrastructure, it cuts costs now and later.
How Can Businesses Consolidate Shipments?
First, there’s on-site consolidation, a process that strategically combines freight at a distribution center or point of manufacture. In this model, fewer touch points throughout the supply chain drive down expenses and boost efficiency. Because there aren’t as many opportunities for handling errors and accidents, on-site consolidation may reduce the likelihood of customers receiving damaged items — something that benefits shippers with fragile products.
Alternatively, retailers can opt for off-site consolidation. In this method, products are brought to secondary locations following manufacture. Then, they’re sorted based on supply chain needs and combined into relevant groups for transit and eventual delivery. Because of the added transportation and labor involved, off-site consolidation tends to be more cost-intensive, although it may benefit shippers who have less control over the timing of orders that they receive.
While each method of consolidation has its own strengths and weaknesses, both have the potential to add value for shippers. By combining orders strategically depending on due date, point of delivery, and product type, businesses can get more out of their shipping program than they would sending orders out reactively. In an economic landscape that’s increasingly dominated by fulfillment, it’s imperative that retailers invest in e-commerce-friendly logistics solutions sooner rather than later.
What Can Logistics Providers Do to Help?
While consolidating shipments certainly benefits small- to mid-sized shippers, it can be challenging to effectively combine orders without dedicated in-house logistics capabilities. With a third-party logistics (3PL) partner or integrated logistics services provider (ISP), however, businesses can rely on external expertise to consolidate less-than-truckload (LTL) orders into high-volume, low-cost shipments — even if that means consolidating with other clients’ orders.
Thanks to over two decades of experience in shipping and logistics, Primary Freight has the resources businesses need to get the most out of their e-commerce operation. Looking to consolidate shipments, reduce costs, and drive value for your business? Our team is here to help organize orders in a way that makes sense within your wider supply chain. Whether you’re looking for added support through route optimization technology, sophisticated data analysis, or cutting-edge warehouse management systems, Primary Freight will get the job done.
To learn more about Primary Freight’s award-winning shipping and logistics services, contact us today at (800)-635-0013.