How Do Consolidation Strategies Compare?

Empty truck ready for shipments to be loaded.

We live in an on-demand world. Consumers are increasingly used to having their food, entertainment, and even packages the instant they want them, which has driven a steady growth in online retail over the last 10 years. In 2019, online retail purchases accounted for 16% of all retail.

What does this mean for shippers? Consumers and sellers expect them to make many small deliveries to homes and offices rather than a few large deliveries to major retail stores. Unfortunately, delivering all these small shipments is inefficient. Large trucks may pull half-empty trailers for much of their route, wasting space and increasing carbon emissions.

Consolidation Can Help

Consolidation is a logistics strategy in which multiple shipments headed for a particular region are combined in a single large container. Once the large container reaches the area, the contents are broken down into smaller shipments and forwarded to their destination.

There are a few different ways to maximize consolidation:

1. LTL Zone Skipping

Shipments that don’t fill an entire trailer are known as less-than-truckload (LTL) shipments. LTL zone skipping is the most basic consolidation technique. Shippers combine all the shipments headed to a region into a single shipment delivered by a long-distance carrier.

Once this shipment arrives at its destination, a full-service logistics provider distributes the cargo locally. Shippers at both stages of the process are trusted to use their different expertise efficiently.

2. Multi-Buyer Consolidation

Retail stores sell products from many vendors. If every vendor delivered their own shipments to every location, it would be inefficient. Most small vendors don’t bring enough products to a store to fill a truck or trailer. In the multi-buyer consolidation model, each vendor delivers their products to a regional facility, which then loads goods from multiple vendors and ships full truckloads to each location.

3. Single Buyer Consolidation

Because of scheduling and other considerations, a single vendor may send multiple shipments to a single retail outlet. Many of these shipments are not large enough to fill entire trucks, so a vendor’s loading dock may end up crowded with many trucks and trailers, reducing efficiency for everyone. Single buyer consolidation depends upon the vendor’s willingness to wait to ship their products until they have enough to fill a truck at once.

Consolidating truck shipments saves shippers time and money. It requires forethought, planning, and cooperation, but the efficiency benefits make it worthwhile. Advancing technologies such as transportation management systems are helping carriers decide which consolidation strategy is most useful for a given situation.

The Growing Role of Drones in Logistics

Drone flying in blue sky

Self-driving cars, aircraft, and other vehicles have long been the holy grail for many researchers. Today, advancements in technology are making this dream come true. Unmanned vehicles are moving out of the laboratory and into the real world.

The growing role of drones in society has significant implications for the logistics industry. Suppliers are scrambling to find the most effective ways to leverage drone technology, applying it to various modes of transportation in different ways.

Air
Making deliveries directly to homes and businesses by drone is the ultimate goal of many shippers. There are many legal and technical hurdles to overcome before this dream can become a reality on a large scale, but we can transport cargo with pilot-optional aircraft right now. This has the potential to decrease costs while improving safety and speed.

Ocean
There are several ways that drone technology may impact the oceangoing freight industry. The possibilities go far beyond ships that navigate themselves across the ocean—for example, drone tech could be used to load and unload ships at shore, reducing labor costs on all legs of the journey. If these ships are designed to operate on solar power, they may need to come to port only rarely.

Rail
At cruising speed, trains are phenomenally efficient. Unfortunately, they have to stop for loading and unloading. Stopping and starting a 10,000-ton train uses a tremendous amount of energy. The trains of the future could use drone technology to unload some of their cargo without stopping.

Trucking
There is a shortage of qualified commercial truck drivers in the United States. Self-driving trucks can help fill the gap. Not everyone is comfortable with autonomous trucks, but shippers can also apply drone technology to cranes, forklifts, and other vehicles that load and unload trucks in the shipping yard.

No matter what mode a shipper is using, drones have one enormous advantage. Just like the robots in an Amazon fulfillment center, all of the drones in your shipping operation, across every mode of transport, can report their position, ETA, power status, and other information in real time, giving shippers the ability to manage their fleets with unprecedented accuracy.

It’s an exciting time to work in the logistics industry. Advancements in drone technology and other automated systems now have real-world applications affecting every aspect of shipping, from the warehouse floor to the customer’s doorstep. What does the future of logistics look like? It’s difficult to be certain, but drone technology will certainly play a large part.

The Big Logistics Diversity Challenge: Supporting Inclusion in the Industry

Team managing warehouse logistics in an on-site office

According to the research firm Gartner, women make up 55% of the workforce—and yet, they hold only 37% of jobs in the supply chain industry. The Chartered Institute of Logistics and Transport (CILT), an organization of logistics professionals based in the UK, is working to improve those nu mbers with their event, the Big Logistics Diversity Challenge.

This event will take place for the second time in June 2020 at Newark Showgrounds in Newark, UK. CILT designed the event to promote gender and background diversity in the logistics industry, encouraging teams of all kinds of people to compete in friendly logistics-themed challenges that test their ability to cooperate to solve problems. The Big Logistics Diversity Challenge will also feature speeches by industry leaders and opportunities for networking.

Inclusion on a Large and Small Scale

Logistics is all about managing the transportation of goods, information, technology, or raw materials from one place to another. The industry depends on millions of people in different countries, with different skills, doing their part to make sure an item arrives at its destination safely. Efficient shipping requires cooperation between all kinds of diverse entities—it only makes sense for that global spirit of unity to apply at the smaller company-wide level too.

Why Diversity Matters

Every individual deserves the chance to pursue their interests and use their knowledge and skills to lead productive, fulfilling lives. There are many women and people in other marginalized groups that could be very successful in logistics if they only had the opportunity—to deny them is a disservice to humanity as a whole.

Being inclusive isn’t just the right thing to do—it’s also advantageous economically. Studies have shown that improving diversity in the workforce increases innovation and productivity. Bringing different individuals with numerous viewpoints together increases the chances for new ideas to develop and drive positive change within an industry. More diverse businesses are also better able to attract and keep talent.

Encouraging more minority groups and women to engage in logistics careers can only improve the global supply chain. We look forward to following along with CILT as they make progress toward this goal in the next Big Logistics Diversity Challenge.