Freight Consolidation - Meaning & Definition

Published in Operations and Supply Chain Terms by MBA Skool Team

What is Freight Consolidation?

Freight consolidation is a service offered by the shipping companies to lower the total shipping cost and to amplify shipping security. Consolidation service in general includes the cargo transportation to the filling point, filling and arranging of cargo in the container, shipping documents are checked via custom process and finally lag of re-packing the shipment for delivery.

Freight consolidation is also known as consolidation service, assembly service, and cargo consolidation.


What is Consolidation?

Freight consolidation is when various small shipments, all being forwarded to the particular location, are bundled, adjusted and shipped together to the pre-defined location. This service when done correctly can be profitable for both, the customer and the freight forwarder.


• There are quite a lot of cost advantages to freight consolidation, both for the customer and the shipping company. The first one is cost cutting; consolidating small shipments decreases overall fuel costs for the freight forwarder. The second one is that forwarding of the small quantities of shipments that in combination decreases the total shipping costs for the merchant.

• Freight consolidation also offers a lot of safety advantage over forwarding small shipments disjointedly. The more separate shipments there are, the elevated is the risk of something interrupting the delivery of at least one of the shipment. Consolidation in turn lowers this risk and enhances the delivery system of the firm.

• Freight Consolidation cuts the number of separate deliveries you receive. Thus forming a single channel of delivery. Goods from different suppliers can be bundled into a single pre-arranged delivery at a time convenient to the needs. Orders need only be signed for once and the companies can even take away excess packaging at no extra cost incurred. If cargo space is a constraint, firm can even have bulk stock held at the depot until they need it in the store.


Hence, this concludes the definition of Freight Consolidation along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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