LTL into Truckload Shipments
Building complete truckloads (optimizing the cube and legal weight) is a transportation best practice that nurtures efficiencies and economies in the best of times and the worst of times. Transportation of America offers four (4) types of LTL Consolidation services for our customers…
- Direct Consolidation West to East; East to West
- Common Carrier Nationwide
- Expedite (Just in Time) Nationwide
- Load to Go Nationwide
Converting less-than-truckload (LTL) shipments to full truckloads (TL) helps our TOA customers optimize and reduce their transportation costs, rationalize asset utilization, gain niche capacity and provide better service to their end customers. Fluctuating demand, variable capacity, and speed-to-market requirements often challenge the best of shippers to find economies of scale. However, by consolidating freight & pooling like shipments together TOA can help mediate and sometimes completely alleviate all of these same volatilities.
Fundamentally, consolidation drives simplicity and shipping consistency. Companies often leverage this balance to underpin business process improvements that have far-reaching impact elsewhere in their supply chain. By merging shipments and delivering more frequent truckload volumes, shippers can increase turns and reduce inventory. This flexibility drives just-in-time, continuous flow strategies-from production to sale-allowing business to pull product at each pooling point and more efficiently match supply to demand. Why have two trucks deliver half-full when one can carry the entire load? Partnering with TOA and shipping LTL freight within our network is a very simple way for shippers to net considerable savings.
Load consolidation is far from novel. It became trendy in the 1970’s when the LTL market was regulated, non-competitive, and therefore expensive. Consequently, consumer product goods (CPG) companies built campuses to share warehousing and transportation resources. In the 1980’s and 1990’s, as merger and acquisition activity picked up and TL volume ran rife, many businesses began using large single-box warehouses to anchor their distribution networks. Today, retailers and wholesalers are turning back the clock and turning to each other to more efficiently allocate and manage resources. TOA see’s collaborative warehousing and distribution as the continued wave of the future as shippers and consignee’s look to reduce inventories and save money. The same may hold true for collaborative transportation. Today 40% of our TOA customers place their inventory with us (in our managed facilities) and we ship it out in real time as demand dictates. The other 60% of our TOA customers work on a more demand driven, JIT basis, and cross-dock their product into the network. For these shipping customers, TOA provides local trucks that will go and pick up the freight from our customers dock and bring it back to our consolidation terminals.
Load consolidation saves money in two different ways: it improves TL utilization resulting in lower costs per shipment; and it converts LTL shipments into less-expensive TL shipments. Freight Companies like TOA can purchase freight transport costs anywhere from 10-35% Less by successfully converting LTL shipments into TL shipments or by means of extreme tariff discounts with preferred carriers. Sometimes TOA rates can be discounted upwards of 85%+ from listed public pricing! In terms of trailer utilization, efficiency has been realized over the 40% mark and this concept is the core of TOA Nationwide Forwarding and Consolidation Programs.
Beyond TOA offered economies of scale, working within a consolidation-minded transportation network like TOA allows companies to tap into a greater pool of carriers (ground, rail, air), which is critical when capacity ebbs and flows. While the value of consolidating shipments is inherently simple and patently clear, it sometimes invokes a latent fear that it means holding product until inventory builds up. For consignee’s with ultra-tight delivery windows, such infrequency would be intolerable. With TOA rest assured our experienced customer service team fully embraces the responsibility of routing orders and scheduling appointments with all retailers and end-customers of our customer.
Concerns about predictability and cycle time consistency also arise for shippers. If orders drop at the last minute, shippers know that it can sometimes be difficult to consolidate these anomalies with other products. These apprehensions, when played out, are largely transparent. Therefore, as a shipper works with their customers, TOA, and possibly other shippers to execute freight consolidation programs, together we can all often aggregate, then massage some of these inventory and visibility inconsistencies, while uncovering other deep-rooted inefficiencies within a customer’s supply chain. And, aside from transportation cost efficiencies realized through TOA, leveraging TOAs Nationwide consolidation capabilities empowers our customers to reallocate resources, better manage inventory and improve their own business of creating and marketing products.
For medium to large sized shippers, working with TOA demands a willingness to collaborate and share information in order to maximize shipping results. We want to develop a system that manages each partner’s asset needs and customer delivery requirements, therefore pooling or consolidating larger volumes of freight requires a higher level of customer, manufacturer, and carrier communication than does a single transactional shipment from one manufacturer to a customer. As a team we need to truly understand all lead times, required delivery dates, specific customer shipping requirements, seasonal flows and surges. The TOA team will also be glad to discuss and explore eCommerce opportunities between our two companies as more volume in TOAs system creates exponentially greater opportunities for us to build full truckloads and deliver all of our customer’s shipments even more frequently/ redundantly than we already do today.
It must be noted that end customers are welcome beneficiaries of TOA LTL consolidation programs too! TOA holds all of our carriers and vendors in compliance to specific transportation requirements, so whether it be your customers preference for TL shipments or their use of required specific routed carriers only, TOA helps your customers meet their own inventory replenishment needs. TOA LTL programs can also give shippers a customer service advantage by increasing the number and frequency of customers shipments to specific customers. Shippers can do this with TOA by leveraging their incremental tonnages to amplify their shipment frequencies into specific regions of the country, from one or two times a week to four, if necessary. Buyers are equally engaged in supporting their vendor’s delivery needs and retailers no doubt know there is a real value in consolidation as they run some of the biggest programs in the world.
Transportation of America helps our shipper customers scale any growth they are realizing by matching their demand with our existing resources and network. Some businesses that are scaling supply to demand or balancing growth or reduction options against available resources, are considering the participation in a shared transportation networks, or “COLLABORATIVE” consolidation programs that tap the collective whole to optimize the individual parts. Gathering critical mass among a local group of like companies is becoming very popular and whether it be shared pain or shared gain, businesses are finding greater strength in numbers. The confectionary industry is a prime example due to their sensitive shipment nature. Temperature-controlled transportation is expensive and a robust national refrigerated LTL network does not exist to support broad coverage, therefore gathering critical mass among a local group of like companies is becoming very popular. While organization hubris can ambush attempts at collaboration, the potential rewards are measureable and considerable.
As with other logistics fundamentals, embracing any form of load consolidation as a best practice invites other opportunities to affect change. No matter what your distribution network looks like or end customer requires, TOA can help to bring your shipping chaos into organizational and sustainable efficiencies.