Consolidated freight is the result of combining multiple cargo loads into a single freight vessel or container, filling it up to full capacity. It is typically done with goods going to and from the same region.
Individual cargo is separated (deconsolidated) once it reaches its destination. Thereafter, it is shipped to its final destination.
Consolidated shipping services help reduce cost for companies or individuals that do not have enough cargo to fill a freight vessel or container. This is because they only pay for the space they use. Carriers benefit as well, by optimizing the space onboard their shipping vehicles.
Consolidated Trucking
Consolidated trucking is known as less-than-truckload shipping. It is an option provided for consignors transporting goods that do not require the full freight space of a truck.
Consolidators pack cargo from multiple consignors into a single truck traveling to a destination. Once there, they are deconsolidated before being delivered to their respective recipients (consignees).
Less-than-Truckload (LTL) vs Full-Truckload (FTL)
FTL shipments are done when a single consignor uses the space of an entire truck for freight transportation. The differences between LTL and FTL shipments are listed below.
- Weight
LTL is typically used for shipments of 100 – 10,000 pounds. FTL is usually used for cargo above 10,000 pounds.
- Cost
LTL is usually cheaper than FTL as consignors are only paying for the space used, instead of the cost of using the entire truck.
- Speed
FTL is faster than LTL as goods can be shipped directly to the consignee without the need for deconsolidation. For faster delivery, a consignor with a smaller shipment may also choose to hire a whole truck if cost is not an issue.
Consolidated Sea Freight
Consolidated sea freight is commonly known as less-than-container-load shipping. Goods with smaller dimensions from multiple consignors are combined to fill a single shipping container for transportation via a sea freight vessel.
After arriving at the destination port, containers are brought to a warehouse for deconsolidation prior to last mile delivery.
Less-than-Container-Load (LCL) vs Full-Container-Load (FCL)
FCL shipping is when a single consignor books an entire container for ocean freight transportation. FCL is typically used for cargo larger than 10 cubic meters (CBM), while LCL is the common option for freight less than 10 CBM.
LCL also differs from FCL in the following ways:
- Cost
LCL shipments are typically cheaper than FCL ones. In FCL shipments, consignors usually pay a flat rate for a full 20ft or 40ft container. For LCL, they pay a lowered rate based on the amount of space used in the container.
- Security
FCL generally offers more security than LCL.
FCL shipments are sealed by suppliers or manufacturers at the origin destination, and are only opened by customs and the consignor. Conversely, contents of LCL containers are handled by multiple parties during the consolidation and deconsolidation process.
- Speed
LCL shipments typically take longer to complete than FCL. This is because more time is required for packing, unpacking and sorting as well as waiting for enough orders to come in to fill a container.
However, FCL availability may be limited during busier periods of the year. During this time, LCL may be the faster option due to greater availability.
Consolidated Air Freight
Goods are typically consolidated in most air freight shipments. Cargo from multiple consignors are loaded onto planes prior to transportation to their destinations. In consolidated air freight:
- The entire shipment is listed under the same master waybill, but individual loads have their own house waybills as well
- Cost is calculated based on the chargeable weight of cargo
To use the freight space of a full plane, consignors can book a chartered flight. However, this method is less commonly used as it is much more expensive than typical air shipping via cargo planes.
Benefits of Consolidating Shipments
Reduces Cost
The biggest benefit of consolidating shipments is that it greatly reduces the cost of moving smaller cargo loads. With shipments that cannot fill a whole truck or container, it is much cheaper to pay for the exact space used than the whole vessel or container.
Greater Flexibility
With consolidated shipping, consignors do not have to wait for a full vessel or container to be available to ship their goods. Their cargo can be loaded and shipped as soon as possible, with a greater number of routes to choose from.
This is especially useful during busier periods of the year.
More Environmentally Friendly
Consolidated freight leaves a smaller carbon footprint than unconsolidated freight. This is because freight space is used fully and more efficiently, resulting in less fuel-burning vessels during road, air, sea and skies.
This is especially true for longer journeys, such as shipping from
Challenges of Consolidating Shipments
Risk of Damage
The additional handling of freight during the consolidation and deconsolidation process poses a higher risk of damage or loss of cargo.
Risk of Delays
It may take some time for some carriers to compile enough freight before making a consolidated shipment. This may delay the delivery of freight, especially to less popular destinations.