Air Freight Consolidation: The Good, The Bad and The Ugly
In the world of logistics, the term “consolidation” shares the same definition across all modes of transportation. It is the concept of taking freight from multiple origins going to the same destination, and putting them together for transport. While every mode of travel has different benefits and problems, I am going to focus here on exporting from the U.S. via air freight.
The Good: If you are simply looking for the best rate possible and not concerned with the travel time, then consolidation could be a good option for you. For a smaller shipment you are ok with a longer transit on, you would want to contact your freight forwarder about possible consolidation pricing as you could see marginal to large cost savings on your air freight charges. The extent of savings available will depend on the destination.
The Bad: Air freight consolidations typically are done on a weekly basis and export only on the weekend; plus, you carry a low priority with the carrier because you are asking for the lowest price possible. So, if you give a shipment to your forwarder on Monday, then the transit time will look long for air freight as it would not arrive until early to middle of the next week. If you plan ahead and consolidate customer orders on your end for the same destination, then also be sure to consolidate all the way up until the last day you can tender to the forwarder for export.
The Ugly: Consolidating air freight seems like a good idea all the time because you are saving money, but many customers expect air freight to arrive quicker and this can cause customer service issues for some companies. If you miss the date for giving a consolidation to your forwarder, you will likely be looking at the next week’s consolidation if you want to keep the same rate. So, you could be stuck with over a week transit or pay more than planned to find an alternate option and get it there sooner.
Air freight consolidation used to be the norm in the logistics industry – even as recently as 3-5 years ago – but the last few years we have seen the pricing for air freight go down and therefore the cost savings aren’t as valuable as they used to be. Most companies are now planning enough ahead to use ocean freight as the primary logistics mode, and this cost savings is usually much greater for ocean than air freight consolidations. Please always keep in mind that if a customer has chosen air freight as the mode of transport, they are likely to expect a certain service level that might not fit for consolidations.
Questions? Comments? Please feel free to contact me Tim Acord tacord@supfrt.com Air Export Manager with Superior Freight Services, Inc.
Also check out blog: Aircraft Containers Sizes
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