For all companies, effective and efficient shipping strategies are crucial to increasing conversions, retaining customers, and achieving sustainable growth. However, managing shipping processes, particularly on a global scale, is often complex, time-consuming, and expensive. 

In recent years, the cost of international shipping has continued to skyrocket, thanks to issues with inefficient cargo ships, limited partner options, and even geopolitical conflicts. 

As of September 2024, the average cost of a 40-foot container is now 180% higher than it was in 2019, before the pandemic. Although companies in different industries and environments may need to implement a range of strategies to reduce shipping costs, freight consolidation with FCL shipping is one of the most effective ways to minimize expenses and unlock a range of other benefits.

Understanding Freight Consolidation and FCL Shipping

Freight consolidation is the process of combining multiple units, products, and packages into one larger shipment, rather than moving units individually. On a small scale, most companies already leverage consolidation practices by combining multiple items in an order into a single package.

The same concept can also be applied on a larger scale for businesses with FCL, or “full container load”, shipping. With FCL shipping, companies can fill an entire container with products, rather than hiring small amounts of space in a container every time they need to move goods overseas.

Although some smaller companies may argue that they don’t ship enough cargo overseas to necessitate FCL shipping, there are various methods and strategies organizations can use to take advantage of this consolidation practice and reduce shipping costs. 

Reducing Shipping Costs with Consolidation

Ultimately, while the amount of product you ship overseas will have an impact on your logistics costs, the frequency at which you ship products has an even greater influence. The more shipments you need to pay for, the more expensive your freight becomes. 

That’s why it makes sense from a financial perspective to look for ways to implement freight consolidation strategies. Even if you ship fewer goods overseas than some larger companies, you can still access the benefits of freight consolidation to reduce shipping costs by:

Making Larger Purchase Orders

Provided you have enough space to store additional inventory in your warehouse environment, making larger purchase orders can be a great way to reduce overall freight costs. Rather than buying the same products regularly from the same providers and paying shipment and import fees every time, you can purchase top-selling items in bulk.

You might even find that you access additional saving opportunities because suppliers and vendors offer greater discounts on large volume purchases. Plus, you’ll be able to ensure you’re adequately prepared for peaks in sales numbers throughout specific seasons.

Collaborating with Other Companies

If you don’t have the funding or inventory space to purchase additional goods from a supplier, or you’re not shipping enough products overseas to facilitate the need for FCL shipping, you could consider collaboration. Working with other companies in your area can be a great way to split the cost of a full container between multiple parties. 

Splitting Inventory Between Locations

Another option is to consider shipping a large amount of inventory to different locations, providing each region you serve with additional stock. This is a great way to ensure that when customers do place an order with your company, they’ll be able to access faster delivery speeds. 

Depending on your chosen freight provider, you might be able to distribute parcels and palettes from your shipment among multiple locations throughout that provider’s chosen route. 

Beyond Cost Savings: The Benefits of Cargo Consolidation

Cargo consolidation and FCL shipping aren’t just great ways to reduce shipping costs. Taking this approach can lead to numerous additional benefits, such as:

• Greater customer satisfaction: Because FCL shipping reduces the number of trips involved in filling your warehouses with inventory, it also decreases transit times and ensures you always have the stock you need available to serve customers and deliver items promptly. 
• Reduced risk: Freight damage and loss is a significant concern in global shipping. Consolidation minimizes handling requirements for products and increases security. Fewer handoffs can reduce the risk of mishaps, and fewer transfers mean that you benefit from a lower chance of errors in the supply chain.  
• Sustainability: Freight consolidation helps to reduce the number of vehicles you need to use to transport goods around the world. By reducing the number of trucks and cargo ships you use, you can improve your carbon footprint and build a more sustainable business.  
• Improved partner relationships: Investing in FCL shipping can help you build stronger relationships with freight partners and suppliers. The relationships you build with these partners can give you access to better shipping rates and volume discounts over time. 
• Better visibility and control: When you ship a large number of products overseas in a single container, it’s much easier to keep track of all of your inventory. Logistics and freight companies can even provide direct access to tools you can use to monitor your products throughout the shipping process, giving you more peace of mind and control. 

Improving Shipping Strategies with Consolidation

Ultimately, managing the costs associated with shipping will always be a challenge for companies shipping products overseas, or ordering supplies from international vendors. As shipping costs continue to rise, it’s becoming increasingly important for businesses to explore intuitive ways to keep costs low, optimize efficiency, and reduce risk. 

Freight consolidation and FCL shipping strategies can be a fantastic way to not only reduce the operational expenses associated with shipping but also enhance your overall supply chain. Used correctly, these strategies will help to make your business more cost-effective and sustainable, improve visibility into your logistics strategy, and enhance your relationships with customers and partners.