Do you know your carriers from your forwarders, and your brokers from your consolidators? Global logistics can be a complicated industry. Let’s take a look at the role of consolidators.
Consolidation in Logistics
A consolidator is a business that combines cargo consignments belonging to multiple shippers into full container loads. This economical way to transport goods internationally helps the shippers by giving them a cost-effective way to do so. By eliminating the costs associated with renting and transporting a shipping container that they cannot fill, individual exporters are spared the expenses. The consolidators play an important role in the logistics process, while serving both the interests of the shippers or consignors and the carriers. They work with a wide range of manufacturers, businesses, and shipping companies to identify shipment requirements and connect consignors to the right shipping companies on account of their budget and transport requirements.
A consolidator performs the following duties
- Less-than-Container-Load (LCL): Small and medium-sized companies may find it hard to enter foreign markets due to the lack of financial and infrastructural resources of TNCs and multinational companies. Small businesses may have less than container load (LCL) shipments and may be able to be accommodated by consolidators or groupage operators.
- Freight Forwarding: Even though freight forwarders and consolidators are often synonymous, they often offer separate services as well. In many ways, consolidators resemble freight forwarders, and they typically assist customers in many ways beyond their trucking expertise. Many firms provide a variety of services to enhance supply chain management.
- Facilitating Foreign Buyers & Suppliers: To put it simply, consolidators carry out a wide range of duties including broker, export firm, agent, and even consortium. It is hard to fully describe their logistics and supply chain management function in terms of services. They can handle orders from multinational corporations and international customers in addition to local manufacturers and suppliers. Consolidators are well-versed in the demands of each marketplace and are capable of helping SMEs save money and obtain efficient delivery solutions. They can tailor logistics to each region rather than focusing on one.
- Assisting SMEs: Consolidators are familiar with the shipping networks, logistics regulations, and commerce rules of foreign destinations. SMEs are assisted by consolidators in a wide variety of ways. They work with consolidators and brokers who bring them a range of shipments from various businesses. Foreign buyers employ consolidators to ensure the quality and safety of the shipments.
ProConnect Integrated Logistics for your Business
You’re not the only one thinking of outsourcing part of your operations to a 3PL, many companies and shippers agree and rely on us to efficiently support them. Optimizing supply chain is not easy, it requires tying lots of activities and ends together, opting for an experienced 3PL like ProConnect Integrated Logistics can offer many benefits – thanks to their expertise, experience, resources and of course, their network, which can reduce your supply chain risks marginally. You may or may not have a supply chain department of your own, but you still need a trusted team to identify and avoid potential risks and problems that can affect your supply chain operations. Therefore, a 3PL is often turned to and appointed by large companies as well as SMBs.
For any questions or evaluation, get in touch with us.