Technology Improves Logistics Industry Performance . . . When It’s Done Right. Part 3: Consolidation

Marc Andreessen, the serial tech entrepreneur and founder of Netscape, says, “software is swallowing the world.”  Our ability to navigate our day is predicated on how effectively we use all the screens around us. Each new website, tech company or app automates some sort of process or procedure that previously relied on manual labor or pen and paper. What used to take days can now be done in minutes from anywhere in the world.

Software is increasingly prevalent in the transportation industry. Gone are the days of hand written BOLs and fax machines; they have been replaced with full-service transportation management systems (TMS) that generate digital bills that instantly pop up on a driver’s smartphone.  In this series, we highlight six more areas where the proper use of technology improves operating performance and profitability.

Part 3: Consolidation

For decades, carriers have consolidated shipments to improve utilization, enhance efficiency, lower costs, and improve margins.

Load consolidation, or optimization, is performed by tools that analyze a group of shipments to recommend different combinations of the most efficient loads.  This can be done at either the micro (2-4 shipments) or macro level (up to 1000s of shipments) and transforms high volumes of smaller, less cost-effective shipments such as parcel, LTLs or partials into larger modes (truckload, intermodal) to provide cost-saving opportunities.

Small orders can also be combined into multi-stop truckloads to see even greater opportunities for savings as well as a reduction in overall transit time.

When you automate consolidation:

Do: Look to utilize consolidation tools across multiple customer shipments.

Don’t: Forget to utilize cost-savings data from shipment utilization. You are saving your customers a bunch of money, they should know it!



Part 1: Sourcing Capacity

Part 2: Track and Trace