If you’re involved in shipping any type of product, you’re undoubtedly looking for options to reduce shipping costs while improving time and efficiency. There are several ways of doing this, typically involving the consolidation of products onto trucks to reduce the number of vehicles involved.
The most common models for doing this are freight consolidation and pool distribution. In this article, we’ll briefly look at how each works, and the differences between them.
I. Freight Consolidation
Freight consolidation means combining several small shipments together onto one truck, to be delivered to a common receiving destination.
An obvious example of this would be delivering to a “big box” style store that stocks many types of items from different producers. The shipping company takes in all the goods intended for that store and sorts them at a freight consolidation facility. These are then loaded onto a shared full truckload shipment for delivery to the store.
However, this strategy could just as easily apply to a major manufacturer, such as one working in automotive assembly or electronics assembly. In this case, their various incoming components would utilize freight consolidation for delivery.
This strategy is beneficial to both the shippers and receivers. Receivers get their products faster and more efficiently, while shippers pay less for shipments.
II. Pool Distribution
Pool distribution is similar to freight consolidation, but with one key difference: instead of delivering all products to one destination, incoming products are delivered to regional pool distribution facilities. The products are sorted there and put on short-haul LTL shipments to individual receivers in the area.
In other words, it’s similar to the model used by parcel companies like UPS or FedEx.
Pool distribution will typically take in products from multiple shippers and intended for multiple receivers. For example, say a town has a thriving downtown with numerous independent stores. Under other shipping models, each store would be arranging for its own shipments, which would be extremely inefficient.
Instead, a pool distribution model could be used to collect all products at a nearby warehouse, and then deliver them all to the downtown area on shared shipments. This minimizes the number of trucks and workers involved, slashing costs all around.
Freight Consolidation vs Pool Distribution: Which Is Best for You?
Ultimately, both methods are extremely efficient and excellent at creating cost-savings, while also safely delivering more products, faster. Which is best simply depends on each customer’s business model, and how they wish to optimize.
A great 3PL/4PL provider can work with you to find the best shipping options for your operations! From simply arranging transport, to optimizing your entire supply chain, a logistics company can quickly overhaul your logistics systems for the best results.
Contact US Logistics Solutions to learn more about our services.