Agility for export efficiency–the benefits of a consolidation strategy

Source: UPS

The end goal of any consolidation strategy is simplicity, efficiency and cost effectiveness.

Supply chain consolidation is when you combine shipments to reduce costs and make shipping more efficient. It typically involves multi-modal services with either train, truck or sea transport being part of the mix.

Consolidation is all about being flexible and choosing whatever suits your needs at any given time. It will provide value to you and your customers — and ensure a cost/service balance more aligned to your business goals. Typically, it allows you to reduce transport costs and maintain profit margins. In many cases, it also allows you to offer a broader range of services and a more positive customer experience.

Finding the right partner to facilitate the process

A smooth, seamless and affordable consolidation strategy requires the right partner to carry out an initial audit and develop a tailor-made strategy, the engineering expertise to build customised solutions, and the network to manage the entire process — from collection and transport to customs clearance and billing.

A global partner like UPS, for example, has all the necessary expertise plus a transport fleet — including our own aircraft — that offers a huge range of options and the technology to provide complete shipping visibility.

Consolidating the process from door to door

Some of the most common ways our customers keep costs down are:

  • Sending multiple packages for multiple receivers as a single consolidated shipment which clears customs as one shipment before being deconsolidated and delivered to individual receivers
  • Sending package shipments as LCL (Less-than-Container Load) that are combined with shipments belonging to other exporters to make up a Full-Container-Load (FCL)
  • Consolidating multiple LCL shipments into one FCL shipment for delivery to a single customer

Cutting costs and improving inventory management

The objective of supply chain consolidation isn’t to shorten delivery times — though that may be possible. Rather, it’s to develop a strategy that fulfils key business objectives. Foremost among those is cutting costs and better managing inventory levels.

Savings can be considerable. Our Europe to China rail network can cut the cost of delivering to the Far East by as much as 65% compared to air freight, and is much faster than sea freight. Meanwhile, in the US, considerable savings can be achieved by using the country’s comprehensive road network.

Leading online Italian fashion company YOOX grouped their deliveries for one country into a single shipment. This reduced costs for warehousing, inventory and shipping, and produced more consistent and timely deliveries worldwide, which improved customer satisfaction.

When one US SME consolidated their freight forwarding business with UPS, they realised an initial 30% year-on-year saving, with a further 15% cost reduction when small package shipping was bundled with freight.

Transformation is seldom effortless, but it doesn’t have to be painful and it is a simple way for many businesses to increase their agility and impact their bottom line.

Get in touch with one of our logistics experts, and find out how agile solutions could help with your personal export challenges.

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