Advancements in the supply chain management
Introduction
Advancements in the supply chain management had led innovation to devise ways of revolutionizing the logistic department. The need to reduce cost and increase the reliability of shipment has been the main objective of consolidating transport. The present dynamic market conditions have been engaging companies to think that would not only reduce the cost of the product but also make the goods available to the consumers. Zhou, Van Hui and Liang (2011) comments that both developed and developing companies have been using freight consolidation because it seems more necessary than ever. For instance, the expectation of clients has been on the rise where they would always want to receive their ordered products on the same day. To achieve the goal of same-day delivery to clients, companies have been using the freight consolidation to improve faster shipment of goods that would as well affect the time of delivery to end-users. Besides, retailers always need small but frequent orders where they cannot achieve this by packing goods for each consumer for shipment (Zhou, Van Hui & Liang, 2011). Thus, using freight consolidation have been useful in packing different clients orders in larger containers and then repackaging later for final delivery to the clients. This paper will examine the concept of freight consolidation as well as some of the recent technology applied in freight consolidation.
Significance of freight consolidation
The freight consolidation programs seems a simple concept. However, it might be having several complexities in the execution process. The idea has been a significant game-changer, especially on the profits registered by retailers in the distribution channel. The competition that online buying has been giving most of the retailers all over the universe has led to a decrease in the profits registered by the retailers. However, the competition has been effective in raising the understanding of retailers on consumer demand, thus compelling them to apply freight consolidation in reducing their order sizes. Retailers have been ordering for shipment of product according to the demand of consumers (Moon, Cha & Lee, 2011). This allows them to ship the fewer product at an affordable cost that would as well let them make a profit from the distribution channel. In the flight consolidation concept, each freight does not limit itself to full pallet consolidation. This allows companies to combine shipments, which would save not only time but also save money. In 2015, many logistic companies started charging dimensional weight for grounded packages, which ended up increasing the cost of shipping. However, additional of these packages to trucks heading to a retailers destination has been effective in reducing the cost.
Freight consolidation has shortened lead times in transportation. Before the rise of ecommerce and online shopping, the shipper had longer lead times, which were allowing them to build up pallets and organize a single shipment to a particular retailer. However, in the recent past, lead times have been reduced to align with more reactive changes in the demand for products. The shorter lead times have been limiting the ability of the shipper to consolidate their individual freights. However, the concept of freight consolidation allows multiple shippers to combine the product going to a retailer. This idea results in faster building up of volume, and shippers can still manage to beat the deadline for urgent deliveries at a reduced cost. Besides, the freight always travels directly to the retailer instead of multiple parcel sort stations, which has an impact on the reduction of transit time.
The compressed margin of goods shipped has been compelling logistic companies to reduce the cost of shipping products. For instance, most shippers lack the regular volume of goods to achieve full truckload shipment regularly. This situation has been creating a constant battle from bot shippers and ecommerce companies as these companies have also been feeling the pressure of free shipping service from their consumers (Zhou, Van Hui & Liang, 2011). Besides, retailers have also been looking forward to improving the profit margin by placing the same pressure on shippers to reduce their shipping costs. However, freight consolidation program has been effective in solution to the problems faced by ecommerce companies and retailers by securing a rate that is lower than traditional shipping costs. The payment has currently been on the amount of space occupied by a freight. Therefore, reducing the cost of ferrying goods from the manufacture to the retailers and direct clients.
Challenges of Freight Consolidation
Despite the ability of freight consolidation, allowing companies to send good frequently, the time taken for the goods to reach their destination is still an issue. The logistics involved in the consolidation process is complex, which consumes more time than expected. Planning of the shipment consumes much time because of the limited control on the shipping schedule. For instance, a shipper will have to draw a trajectory of offloading the products on each destination because of the numbers companies that teamed up in the shipping of the different product. This concept is different from a Full Truck Shipment (FTL) because a shipper only thinks about a single destination (Quak & Tavasszy, 2011). The need to reduce the time of shipping products using the freight consolidation method has been an excellent issue for companies adopting this method. However, shippers believe that it would be sufficient to spare some time in shipping that increases the cost of shipping product. The online shopping companies have been countering this challenge by assuming the clients the exact time they would have to receive their ordered goods. The concept of putting consumers informed allows consumers to know the exact time they would be receiving their order products. Besides, it aids increasing demand for the products.
Locating the right carrier has been an issue affecting most companies in the freight-shipping program. Not all carriers offer consolidated shipping. Besides, the carriers offering such services might be in a position to provide the best deal that would favor a shipper. Some of the carriers might end up damaging more goods in the process of shipping which would be on the cost of the shipper (Moon, Cha & Lee, 2011). The high number of damaged goods would translate to a massive loss on the shipper.
Technology in Freight consolidation
Monitoring of the shipment on the flight consolidation program has advanced in the recent where all shippers in the consolidated programs have the information on the real-time they should be expecting their deliveries. Application of the RID technology remains one of the most relevant technologies that define the monitoring process in transportation. For instance, shippers would know the location of their goods from their computers as well as approximate the exact time to receive their products (Quak & Tavasszy, 2011). The machine-to-machine (M2M) equipment allows shippers to track their cargo by communication with the logistic company to receive information as well as conditions of their load. The shipper would receive information on any excepted delay emanating from the uncertainties of transportation. This improves the level of communication, which allows efficient shipment cargo.
Recent technology has also been able to reduce the theft of cargo that was rampant in the past. M2M tightens cargo security by sending alarms when anyone cuts the bolts. These M2M devices operate on ZigBee, which a wireless communication platforming is using the radio waves connected to M2M technology. Companies can track the data, which always display on a map application similar to the prominent google maps (Behrends, 2011). The SaaS program installed used by many shippers allows them to view the location of cargo on different dimensions based on land and ground schematics.
Recommendation
Countering the challenges facing freight consolidation comes from the parties involved in the consolidation agreement. A shipper should conduct a comparative assessment of the right carrier. The choice of the carrier would depend on the cost of shipping products. For instance, a shipper would agree with a carrier on a price that is effective for both parties. Besides, they would like entire into a contract that would define the cost of sharing damage costs in the transportation process. These measures would be useful in selecting the most reliable carrier that would ensure safety as well as the timely delivery of the cargo. A shipper who does not have significant information on a carrier might end up losing the goods to thieves or register a high number of damaged products. Analysis of the trips made by a carrier as well as the recommendation from the clients served by the carrier would be useful in understanding the quality of services of a carrier as cited by Olsson, and Woxenius, (2012). Besides, it raises the trust of a shipper, as they do not have to be worried about the condition of the cargo during the transportation process.
Application of modern computer technology in the planning process of freight consolidation would be useful in the reduction of errors and reduced the time wasted in the planning stage. Most of the shippers complain about the complexities involved in the freight consolidation process that affect the entire process of adopting the freight technology program. The attempt taken in reducing the time taken in the planning stage would be useful in shortening the time that a carrier would take to deliver products too different locations. Besides, faster processing of freight logistics would allow the carrier to start earlier transportation where they would deliver goods in all locations without complaining about the time issue from their clients (Moon, Cha & Lee, 2011).
The technique deployed in the packing containers would as well be one of the most effective ways that would aid a carrier limit instances of wasting time. Packing the containers with the idea on the route and destination in mind would allow effective programming of goods inside a container. For example, products which will be the last to offload should be the first in the container with the sequence decreasing to the goods that would be first to be delivered to a shipper (Moon, Cha & Lee, 2011). This concept would as well aid in reducing offloading time.
Conclusion
Freight consolidation is one of the most applied transportation programs in the recent past. The rise of ecommerce companies that favor online buying has been transforming the transportation industries with sippers thinking of teaming up in transportation. The consolidation program has been effective in the reduction of cost to many shippers, which explains the reason behind most of the shippers adopting this kind of application. The aspect of technology in the running of the freight consolidation program has been effective in increasing the effectiveness of the program by eliminating errors and improving the tracking of cargo.