What Is Retail & Outbound Consolidation? | GoShip

What Is Retail & Outbound Consolidation?

As a result of the rapid growth of the retail industry, there is fierce competition among retailers. To succeed in more competitive markets, businesses must implement the latest technology, respond to growing customer demands, and maintain realistic budgets.

Keeping costs low is challenging when you constantly need to adjust your strategy and improve service. However, there are some ways for retail supply chains to become more efficient and less expensive. One of the widely used solutions is a retail consolidation program.

What is a retail consolidation program?

A retail consolidation program is when freight from several suppliers is combined into a single shipment and sent to a retailer. Consolidation is often a part of the retail compliance program and helps to increase its productivity. Retailers often need multiple LTL shipments, which are expensive to deliver separately and often lead to delays. When all the inbound shipments from the suppliers are combined and consolidated, the process becomes cheaper, more efficient, and beneficial to both the vendor and retailer.

Outbound Consolidation

Outbound shipment consolidation refers to combining multiple small shipments into a larger load, which then goes to a location near the final destinations of the individual shipments. Upon arrival, the large load is separated into smaller shipments and sent to the customers.

How does the retail consolidation program work?

Each retailer outlines its specific requirements for the retail compliance program. The terms of consolidation also fall under this category. At its core, consolidation usually means a pre-determined strategy and schedule for collecting shipments from multiple suppliers and delivering them to single retail. Each retailer can have different compliance objectives, like delivery time, lead time, etc.

What are the benefits of retail consolidation?

While retail consolidation helps meet standards and stay compliant with the basic retailer requirements, it also provides many substantial benefits.

Delivery speed

Consolidating shipments can help increase delivery speed and, therefore, improve on-time shipment performance. This also reduces delivery time because of the defined schedule and combination of freight. A consistent delivery schedule eventually brings an overall improvement to the entire supply chain cycle.

Cost savings

Consolidating your inbound freight is a huge opportunity for cost savings. Firstly, the compliance program significantly improves shipment performance, which mitigates the risks of delays, lost sales, and all the costs connected to these disruptions. Also, consolidation eliminates transportation spending since multiple LTL shipments or low-volume truckload freight moves in one lane.

Better connectivity

Generally, utilizing a retail consolidation program improves connectivity and visibility throughout the supply chain. More transparent and integrated communication between vendors, suppliers, shippers, and consignees can cooperate more efficiently and improve supply chain performance. This also reduces stock and inventory issues and eliminates delayed deliveries as well.

More Environmentally Friendly

In addition to its other benefits, outbound consolidation is more environmentally friendly than more traditional LTL services. When consolidating, there are fewer trucks on the road resulting in fewer pollutants in the air. Consolidation also cuts down congestion on your loading docks. With fewer trucks, the unloading process takes less time, limiting the amount of time trucks are idling.

Higher Service Level

Ultimately, all of the above benefits result in a higher service level at a lower price. Consolidation simplifies the process, making it easier to execute. 

Less Loss and Theft

With effective consolidation, fewer people are handling product, resulting in a smaller chance of loss or theft. Without consolidation, an LTL shipment involves multiple trucks throughout its journey. Each time someone handles the freight, the chances of damage or theft increase. There is also a chance that pallets get separated, causing major logistical issues.

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