Co-Loading Freight Defined
Similar to ride-sharing, co-loading freight is a fulfillment solution that transports pooled cargo from various companies through the same vehicle. Co-loading freight could be done in house, subcontracted, or a mix to ensure maximum flexibility and efficiency. As consumers and businesses expect faster shipping, greater customizability, and low shipping fees, freight forwarders must find new transportation methods to maximize their already thin profit margins.
What are the Advantages of Co-loading Freight?
Co-loading freight has numerous advantages and are highlighted below:
- Cost-effective: According to researchers Wang, Kopher, and Gendreau (2014), co-loading freight can hedge against rising transportation fees and reduce costs by an average of more than 10%. Co-loading freight analysis by C.H. Robinson points to an average of $30 saved per load.
- Reduced transit time: Reduced time by shipping goods directly to customers, eliminating the time that goods are sitting idly in fulfillment centers.
- Lower carbon footprint: Shipping full containers reduces CO2 emissions.
What are the Requirements for Co-loading Freight?
Despite its benefits, there are several components needed for a co-loading fulfillment solution to work. These requirements are highlighted below:
- Shipment compatibility: Cargo must be distributed in the same way. For example, all the goods must be delivered together by truck.
- Right compatibility: Small and large less-than-load shipments should be used in parallel to maximize fulfillment load.
- Geographical proximity: Pooling is only effective when goods are nearby.
- Delivery schedule alignment: Careful coordination through big data is needed to guarantee maximum effectiveness. According to C.H. Robinson, a delay from the point of origin can lead to a 15% decline in on-time deliveries by the fourth stop.
How can GoFreight Help You?
As previously mentioned, co-loading freight is an effective transportation solution given the right circumstances. However, it requires careful planning through data collection, analysis, and coordination with partners. This task is hard to accomplish and time-consuming. A simpler and faster way to maximize profit margins is to digitalize. Click here to learn more!