For those not immediately familiar with the term package consolidation, perhaps the best comparison one can make is to Russian matryoshka dolls. Multiple dolls of different sizes can fit into one space and comprise an entire set. It’s pretty much the same principle with package consolidation: several individual parcels are carefully stacked together in one box, and then shipped to a customer. In these scenarios, client businesses pay an added cost to their logistics provider, so that the service can be done on top of transporting the goods.
The rationale behind package consolidation is simple—it’s done primarily to save costs on shipping. Businesses in fast-moving, highly competitive sectors like ecommerce favor package consolidation for the savings they achieve on transport, fuel, and packaging, as well as other resources. But is it the right approach to use for all types of products?
This feature will help you understand the role of package consolidation in logistics: why sellers often choose it, what certain situations it may not be applicable, and what are the current challenges in the logistics industry that are currently being met by third-party logistics (3PL) solutions, just like Red Stag Fulfillment, a reliable ecommerce fulfillment services. If you’re an ecommerce entrepreneur, this will help you get to know the process—and learn when to use it for your shipments.
The Positive Impact of Package Consolidation
The main advantage of consolidating packages, as opposed to shipping them out one after another, has to do with transport costs. While it may take several trips for individual packages to make their way safely to a customer, one big box will require a single journey. That means that sellers will find themselves spending less to move hundreds of customer orders via land, air, or sea. Imagine how it would be if you were able to limit your shipments to one box per customer—by the end of the year, you could be saving thousands of dollars.
Package consolidation also helps sellers leave a smaller environmental footprint. Fewer individual packages to be shipped out also means less use of foam padding, bubble wrap, cardboard, plastic film, and tape. Now that the market is more concerned with green practices and sustainability, it would be a good move for you to reduce your consumption—especially in a resource-heavy process like logistics.
Lastly, consolidating bigger packages may also save the recipients grief from their customs officials. One box containing several items will attract less attention than individual packages sporting big-name brands. The less trouble your customers encounter when they receive their packages, the better it will be for your business.
Some Risks to the Method of Consolidating Packages
There are, however, a few drawbacks to consolidating packages. First off, using bigger boxes by default isn’t a guarantee against damage. If the logistics provider uses packaging material of inferior quality, the box could get severely beaten up while en route to the customer—and the customer may find their items in bad condition.
It’s also commonly understood that consolidated packages demand a longer wait time from customers. The box won’t be shipped until all items from the order are assembled inside. As such, package consolidation is not ideal for customers who need their goods ASAP.
Lastly, consolidation works best if none of the items are fragile or temperature-sensitive. If one product requires more special treatment than the rest of the products in the order—for example, if it’s breakable or has an expiry date—then it’s best to push for individual shipment.
How Logistics Companies Are Stepping Up to the Challenge
It may be overwhelming for sellers to consider every step of the consolidation process. But happily enough, the true innovators in the logistics industry are getting better at filling the gaps. With the threefold goals of (1) reducing both volumetric and gross weight, (2) sorting products wisely, and (3) demonstrating large cost savings to clients as compared to other order fulfillment models, logistics companies are re-adapting their processes—and this is to the benefit of everyone else in the supply chain.
That said, if you’re an ecommerce entrepreneur, you’ll want to partner with a shipping company that possesses such expertise. A neat and compact shipping box, just like a matryoshka doll set, may impart great satisfaction on behalf of your customers.