As we near the completion of our Chicago Consolidation Center expansion, we’ll touch upon several reasons why frozen food load consolidation programs, such as Velocities MVC, are considered best practices.
Lower Overall Transportation Costs
Load consolidation can significantly reduce overall shipping costs because manufacturers no longer pay for the inefficiencies of single LTL rates. Instead, their orders are paired with those of other manufacturers with similar LTL shipping needs (all have orders going to the same retail distribution center) to create multi-vendor truckloads. According to many industry estimates, transportation costs can be reduced by up to one-third by moving from LTL to consolidated TL.
Greater Consistency in Order Delivery
Being more efficient in shipping translates to better optimization of the overall supply chain. Having the critical mass of collaborative food processors is the foundation of a success consolidation program; one that can offer scheduled national deliveries. On a macro level, the global supply chain for food manufacturers is also better optimized as manufacturers work together to remove waste from their individual supply chains and reduce overall shipping costs.
Closer Ties with Key Customers
Load consolidation can also significantly improve food manufacturers’ relationships with retailers, wholesalers and other buyers by helping ensure that order requirements and preferences are met. Consolidated shipping is a receiver’s preference. Retailers benefit from reduced dock congestion, improved on-time delivery, improved purchase order compliance and shorter lead times, all of which allow for more frequent orders with reduced inventory carrying costs.