Outbound Consolidation

Outbound Shipment Consolidation

Outbound shipment consolidation is the process of combining a selection of small shipments into a larger load. The large load is then shipped to a location near the combined shipments’ delivery destinations, where it is separated back into individual shipments and distributed to the customers.

Managing delivery in this way can reduce overall shipping charges in operations where many small parcel shipments are handled each day.

Outbound shipping consolidation can be applied to a variety of delivery scenarios to help shippers reduce freight costs while increasing customer service. Options include:

Postal Pre-Sorting – Outbound Consolidation of Packages for the USPS or USPS Consolidator

This scenario applies to companies shipping a high volume of packages per day across many different areas via the USPS or a USPS consolidation service such as DHL Global Mail. Typically, the postal carrier picks up the packages, hauls them to the local sortation center to be sorted and consolidated for delivery to the closest bulk mail center for their ultimate destination. In this option:

• The shipper, rather than the postal carrier, pre-sorts its packages into larger boxes or gaylords designated for a specific regional bulk mail center.
• The postal carrier picks up the gaylords and ships them directly to the bulk mail center near their destinations.
• As a result of eliminating the sorting step, the postal service will usually offer a discounted rate to the shipper. This more efficient process can save at least a day in delivery time to the customer.

Learn more in our blog: How to Reduce Shipping Costs Using a Mail or Shipping Consolidator

Direct Ship – Outbound Consolidation of Packages for Parcel Carriers to a Specific Hub

This scenario applies to companies using parcel carriers such UPS, FedEx, or DHL to ship a high volume of parcel shipments to one or more U.S. regions that are multiple carrier zones away.

For example, an apparel company in New Jersey may be shipping high volumes into Southern California. During shipping operations, the warehouse staff consolidates all packages going to southern California onto a group of pallets, gaylords, or into the carrier trailer at their dock. The carrier picks up the consolidated packages and trucks them directly to the regional hub in southern California, where they are inducted into their system for local delivery.

• This consolidation option results in faster delivery since the packages skip the initial sort and scan and are instead inducted into the carrier system at the remote hub.
• Usually, this scenario does not result in freight savings as the carrier is still charging full freight charges.

Zone Skipping – Outbound Consolidation for Parcel Carriers to a Specific Hub, But Shipped with the Origin of that Hub

This scenario applies to shipments consolidated to a specific U.S. region. The major differences are:

• The consolidated packages are shipped with the origin of the hub they are going TO, not where they initially shipped FROM.
• The shipping leg from the originating warehouse to the remote hub (Los Angeles in our example) is not handled by the parcel carrier. Instead, a truck is contracted for this haul, either LTL or T.L. depending on volume.
• This scenario results in improved delivery times AND reduced freight costs.

Zone skipping is potentially one of the most effective freight cost-saving tools available. However, evaluation and implementation are rather complicated and should be carefully administered. InfoShip^®/Vx multi-carrier shipping software handles this seamlessly by segregating zone skip zip codes and allowing for unlimited zone skip carrier accounts.

International Outbound Consolidation – to Same Destination Country or Area

Many parcel carriers have branded this process with a unique service name. Examples are FedEx International Priority Distribution, UPS World Ease, and DHL BBX.

In this scenario, the shipper consolidates all packages destined for a specific country or countries through the same clearance facility. For example, when shipping to any country in the E.U. when using FedEx IPD, the clearance facility is CDG (Charles de Gaul Airport in Paris, France). Therefore, all packages to E.U. countries would be consolidated into a combined shipment for delivery to that facility.

The advantage to this type of consolidation is that even though these packages may be going to different addresses (or even E.U. countries), they all clear customs as a SINGLE shipment instead of individual shipments by ultimate destination. This speeds up customs clearance and may reduce the duties and taxes levied by the importing country. Also, the freight charges are usually calculated on the entire shipment weight and dimensions rather than the individual packages, which can yield substantial freight savings.

Learn More

Creative Logistics Solutions has helped many customers utilize outbound consolidation strategies with our InfoShip/Vx multi-carrier shipping software solution. Please contact us for a quick chat if you would like to implement outbound consolidation in your shipping operations.

Case Study: Dollar Shave Club Boosts Shipping Volume with InfoShip/Vx and Black Box Shipping Automation
Blog: Five Ways to Reduce Unexpected Carrier Back Charges
Blog: Four Proven Ways to Reduce Shipping Costs