Small companies, and large ones that have high-value cargo, can’t always hold freight long enough to fill an ocean container or cargo plane. In these cases, they may choose a global freight consolidation option to achieve their goals. But how do you know whether global freight consolidation could be a good option for your global supply chain strategy? Consider the answers to these three frequently asked questions to decide if it’s a good opportunity for your company.
What options are there for air and ocean freight consolidation?
Air and ocean carriers only accept cargo from freight forwarders or freight consolidators. Consolidators for both ocean and air share certain service practices. They can purchase capacity by block space agreement. That is, they reserve committed space from the airlines or vessel space from ocean carriers; they pay for this space, whether they use it or not. And, both types of consolidator can combine compatible cargo from many customers onto unit loading devices or ULDs (for air) or containers (for ocean) to tender to the carriers.
Whether air or ocean consolidation is the right choice for a shipment depends on the required service level and transit time. Air offers faster transit times at a higher cost than ocean. Ocean is slower, but is more cost effective than air. Yet, even in the ocean and air realms, there are many options to consider.
Is it possible to accommodate unexpected changes in routing freight?
A good freight forwarder distinguishes itself best, not when everything is going well, but when things go wrong. Reputable forwarders with experience in more than one type of transportation can help reduce unexpected supply chain failures and provide options if disruption does occur.
Forwarders proactively control loading at origin, the transit while moving inland, and unloading at destination. Their in-house container loading can reduce or avoid unnecessary cargo handling and help prevent damage. But even before consolidation, a good forwarder can identify and photograph cargo that is not seaworthy. In this situation, for example, they can ask the shipper for disposition instructions—accept the freight as is, or send it back to the supplier to reinforce packaging—preventing damage at origin.
What commodities should and shouldn’t be consolidated?
Most types of freight can be consolidated:
- Packaged or crated merchandise on pallets and skids.
- General merchandise.
- Textiles, garments, technology, cell phones, cell phone accessories, and automotive parts.
- Freight for any other industry with a high level of inventory and a sense of urgency (for companies whose inventory carrying costs may outweigh the cost of transportation).
Commodities that do not make good consolidation candidates include:
- Fragile, bulky, low volume products. Consolidated freight must be able to withstand some handling.
- Temperature controlled product.
- Commodities especially prone to customs exams. Cars, boats, and jet skis can be delayed in customs while VIN numbers are checked, holding up the entire container.
- Hazmat freight, such as lithium batteries that contain corrosives and acids, is not suitable for air consolidation, and should not be combined with other freight.
Obviously, there is a lot more to global freight consolidation than this. For additional information please visit our website.
Rick Mettetal – Vice President, Global Forwarding -Rick joined C.H. Robinson as vice president of Global Forwarding through the acquisition of Phoenix International. He has been in the international logistics business since 1980. He started in sales and has held various leadership positions at the local, regional and corporate levels. Currently Rick is responsible for managing operations within the C.H. Robinson global forwarding division.