The Rise of Consolidated Shipments in Logistics (LCL and LTL)

Shipping costs can often be expensive. Whether you are a customer buying off an online electronic commerce website (e commerce) or a manager of a multinational corporation that is in charge of getting products and goods from other cities across the globe, shipping fees are always that extra costs which we wish that we could  minimise or even better, eliminate.

Which is also why several e commerce players and suppliers to business organisations provide an option to ship for free if they purchase a certain amount of goods from them. As a result, the customer or importer perceives the value for money because of the low or free costs for shipping the goods, but in reality they are just paying more and the ultimate winner is the seller and exporter.

Therefore in this article, we would introduce you to consolidated shipments, a popular method to help you keep your shipping costs at the minimum.

What are a consolidated shipments

Consolidated shipments are referred to several individual shipments of goods being sent by different exporters. These individual shipments are grouped together as a single shipment for the purpose of occupying the full capacity of the cargo truck or container.

Many of these individual shipments are small in volume and may not be as heavy to occupy a complete truck or container. Therefore, in order to help the carriers and logistics companies to maximise their efficiency, they combine many small individual  shipments together so as to fill up the entire capacity. As such, the overall operating costs for the fleet operator is much lesser due to the fact that the total capacity is being utilised. However, upon reaching the place of destination, the goods are seperated into their individual shipments so that they could be delivered to the importer as instructed.

Where is it used?

Consolidated shipments are used when importers, customers and businesses request for an Less Than Container Load (LCL) or Less Than Truck Load (LTL) shipment for their goods. LCL is meant for cargo containers while LTL is referred to Trucks with storage capabilities. As their names suggest, these shipping types are meant for goods that occupy a smaller space than their total volume capacity. The fleet operator combines  the LCL or LTL shipments that are bound for the same destination together so as to occupy the maximum volume of the truck or container.

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A truck combines the various LTL shipments heading towards the same destination to occupy its capacity

The benefits and possible downsides of consolidated shipments

The benefits of LTL or LCL shipments (consolidated shipments) are that they are more cost effective, therefore helping businesses and customers to save on a lot of cash when making shipments.

However, there are also disadvantages. One being security of the goods as there many different goods combined together. For instance, a carrier may only start shipping once the capacity is filled or if one shipment needs to be examined by the customs the rest of the shipments face a delay too.

All in all, if you would like to seek the best way to reduce your shipping costs, ask for an LCL or LTL shipping service the next time.

If you have a question, comment below or click here. To see more of Kargo’s various logistics services for you and your business, click here. Share this article!

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