Shipment consolidation is exactly what it sounds like, the grouping together of multiple deliveries into one. As with anything else in business, it’s done on account of money – saving money, to be precise. For example, let’s say a facility in New York City has to ship out so many widgets, all heading points north, west, and south. In each of those regions are any number of cities – Burlington, Portland; Sacramento, San Francisco; Atlanta, Fort Lauderdale. Now the New York facility can send six separate packages, with six separate tracking numbers and separate sets of paperwork along with whatever else is necessary – or it can group, or consolidate, the shipments into three packages, each bound for a regional distribution hub that will then forward each one accordingly.

How Shipment Consolidation Works for You

That’s one example of shipment consolidation, albeit crudely rendered for purposes of illustration. Now imagine that same set of circumstances, only on an international level, with shipments between countries, which often involve customs and other “speed bumps.” Grouping packages makes even more sense in such situations. On a more personal level, many online retailers offer the option of combining separate orders into one, so as to save on freight charges. It’s the same principle, only writ much larger.

However, shipment consolidation can sometimes appear illogical at first glance. Going back to our example, let’s say that the New York office only needs to ship one package this time, to Boston, up north. Oftentimes, however, that package will wind up going west first, to a processing center in Indiana, say. That’s really strange, on the face of it. Why should a package go out of its way hundreds of miles? How is that saving costs, or reducing delivery times?

It turns out that for that one single package, yes, it is a silly thing to do. But from a bird’s-eye view, with many, many packages bound for Boston from facilities all over the country (let’s imagine that this company is a big national one), it actually makes much more sense to group them all together before sending them on. From a systems-wide perspective, in order to get from Point 1 to Point 2, it helps to go through Point 1.5 first.

This is, in fact, how carriers operate in the modern world, going backwards first in order to go forwards, as it were. This isn't a controversial practice; it’s the accepted norm. It’s no theory, but fact, borne out by daily practice over decades now.

It’s an industry in itself, and is poised for even more growth in the coming years as the volume of international commercial transactions rises.

It’s shipment consolidation, and all the tasks associated with it, from merge-in-transit services to cross-docking, everything with the ultimate goal of reducing overhead and increasing operational efficiency.