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Consumer Goods Logistics Blog


LTL Consolidation in Food Logistics

Published by Alex Stark on March 26, 2015

You’ve been shipping your food products via less-than-truckload (LTL) carriers for years. Yes, they’re expensive, schedules are unpredictable and sometimes it’s hard to make sense of the bills. But you’re a smaller shipper in food logistics, so the faster, more reliable service of a refrigerated truckload (TL) carrier is out of reach because you can’t fill a trailer, right?

Hold on, Charley. There is a less expensive and better way.

These days, even smaller shippers can avoid the drawbacks of LTL shipping. They do it by calling upon the matchmaking capabilities of a 3PL to build multi-vendor truckloads for both region-to-region and last mile food distribution.

Collaborate and consolidate food logistics shipments

LTL consolidation strategies take advantage of the fact that 3PLs can combine shipments from several companies going to the same grocery chains. When a 3PL helps food shippers collaborate, those companies gain the freight density they need to drive down costs. And they don’t need to rely on costly refrigerated LTL carriers.

This simple “share the ride” concept, while nothing new, is surprisingly underutilized in food logistics. But more and more small shippers are starting to realize that their lack of freight volume doesn’t leave them without options.

consolidationdiagram-lowrezconsolidationdiagram-lowrez

Pool Distribution

Let’s say that several food shippers need to get their products from the Northeast to the West Coast for final distribution. In the past, each company would make a separate deal with an LTL network. But with pool distribution, all of them can ship their product down the road to a regional 3PL consolidation center, where workers combine those loads onto a single truck. The companies may be shipping to different customers in different locations, but they can still share the cost of the longest leg of the journey. 

Retail Consolidation for Last Mile Delivery

Consolidation opportunities don’t end with the linehaul delivery. Many food companies ship to the same mass retail and grocery chains. A 3PL can use transportation management software to review pending retail orders, comparing ship-to points and requested arrival dates for different vendors. Based on this analysis, the 3PL loads one truck with multiple vendor orders for the same retailer. The retailer benefits by receiving the same volume of freight in fewer shipments. You gain the economies of consolidation while still hitting all ship windows.  

LTL consolidation in food logistics can save 35%

While food shippers might battle for customer attention on the store shelf, their products don’t compete in the back of a truck. Collaborating on a share-the-ride strategy lets “passengers” split the freight costs, paying as much as 35% less than non-consolidated shipments.

Remember: the costliest miles for a truck are the first 50 and the last 50. LTL is expensive because it involves multiple first and last mile sequences – as many as six. LTL consolidation strategies combine freight from multiple 3PL customers to create direct, lower-cost truckload shipments.

Think airport shuttle. Why cab it when you can hop in a van and share the ride, and the cost, with five of your neighbors who are all headed to the same place?

LTL Secrets Revealed

Filed under: Collaborative Distribution| Freight Transportation