Effective Consolidation Depends on Careful Planning and Offers Major Benefits

Effective LTL freight consolidation can provide a protective effect against the peaks and lulls in LTL freight availability. While the same issue may present problems for FT carriers, the LTL market appears most at risk and has a history of problems. Take these examples from William B. Cassidy of the Journal of Commerce:

“LTL carrier Old Dominion Freight Line (ODFL), for example, had difficulty integrating new ELD software into its existing fleet management and safety software in early 2018. ODFL, which had used AOBRDs since 2010, asked for and was granted a 90-day waiver from the Federal Motor Carrier Safety Administration (FMCSA) that gave the operator time to work out the bugs.

For Southeastern, the AOBRD-to-ELD journey took six months, starting in May this year and ending Nov. 11. The Lexington, South Carolina-based regional carrier had to install new software and equipment in nearly 3,200 trucks and tractors and train more than 4,000 drivers who work from nearly 90 terminals from El Paso, Texas, to Norfolk, Virginia.”

LTL freight consolidation does offer additional benefits, including:

• Simplicity of freight pricing.
• Improved transit times, read faster shipping.
• Fewer touches to reduce risk. 
• More shipment transparency.
• Fewer carrier interactions.
• Lower accessorial charges.
• Sustainable shipping practices. 
• Increased service levels. 

The facts and risks give rise to a new issue surrounding consolidation: how can shippers improve LTL freight consolidation activities?

How to Improve Freight Consolidation/Deconsolidation

Shippers may already have some processes in place to enable LTL freight consolidation, such as route optimization programs. Yet, the ELD mandate itself offers additional opportunities to apply consolidation and leverage its benefits. To reap the greatest rewards, shippers should follow these steps:

1. Connect with carrier systems to understand truck routes, activities, and availability, using APIs and EDIs to share and collaborate.
2. Take consolidation to the manufacturers, using dropshipping to move FT freight to the point closest to consumers, such as order fulfillment centers and store fronts-as-a-distribution center.
3. Implement new freight classification and weighing processes, including DIM pricing models, to ensure freight rate accuracy.
4. Leverage a Transportation Management System to connect with LTL carriers that enable consolidation into FT freight. 
5. Consider outsourcing transportation management to a third-party servicer, such as Cerasis, to ensure maximum use of consolidation and pooling of shipments. 
6. Use analytics to track and measure performance, holding carriers and LSPs accountable for delays or other issues.
7. Integrate freight consolidation systems with your accounting management systems, identifying errors and recapturing costs along the way.