Consolidation is the process of combining multiple smaller shipments, orders, pallets, or cargo lots into one larger shipment for more efficient transport. In logistics, consolidation is commonly used to reduce freight costs, improve container or trailer utilisation, simplify handling, and move goods from multiple suppliers or origins together. Consolidated freight may later be deconsolidated at a warehouse, container freight station, distribution centre, or destination hub for final delivery to individual consignees. It is the foundation of LCL ocean freight and groupage air freight.
How Consolidation Works
- A freight forwarder or NVOCC collects LCL cargo from multiple shippers
- Cargo is brought to a CFS and loaded into one container
- The forwarder issues individual house bills of lading to each shipper
- A single master bill of lading covers the full container
Benefits
- Enables smaller shippers to access ocean freight without paying for a full container
- Reduces per-unit shipping costs
- Provides access to more frequent sailings on high-volume trade lanes
Related terms: Co-Loader.
