International Shipping

How to Reduce Your Shipping Costs with Order Consolidation

Consolidated shipping is the process of shipping a number of individual orders together. This process is used by shippers to save costs and time.
How to Reduce Your Shipping Costs with Order Consolidation
Gayatri Bhaumik

By Gayatri Bhaumik

 

June 15, 2020

The modern, eco-friendly, and budget-conscious consumer demands speedy delivery at a great price with minimal impact on the environment. As an eCommerce retailer, you should be looking for delivery solutions that help you win more customers. From this perspective, consolidated shipping is a win-win. This style of shipping helps save on packaging and shipping costs, is more sustainable than other solutions, and meets customers’ delivery expectations.

Consolidated shipping may seem like a lot of work, but if you ship in high volumes, it’s often worth the effort. When implemented well, consolidating orders can save you money and help you optimize your fulfillment processes.

The net effect is that you’ll be able to give your buyers a positive fulfillment experience. To show you how exactly this can be achieved, this article will explain what consolidated shipping is, outline its benefits and how it works, and highlight the differences between direct injection and order consolidation.

What is Order Consolidation?

Order consolidation is the process of shipping a number of individual orders together. Shipments going to the same destination are grouped and shipped together in order to save costs and time.

Instead of going through the hassle of organizing different shipping solutions for each parcel, you can put all individual parcels in the same purchase order and send them together. Then, you can send an Advanced Shipping Notice (ASN) to the buyer to inform them of their order consolidation. Your parcels will be combined with parcels from other brands and companies to be sent to their destination country; once they arrive, they will be passed onto local couriers for last-mile delivery.

Consolidated shipping is useful for eCommerce retailers who often ship large volumes to a particular country; they can use the delivery method to save on shipping costs, reduce the use of packing resources, prevent product damage, and offer an overall better experience to their customers.

6 Benefits of Consolidating Shipments

The benefits of consolidated shipping can be huge; if done correctly, it can be a win-win situation for retailers, courier companies, and end customers. All the players in the order fulfillment process benefit in the following ways.

1. Reduced shipping costs
Consolidated shipping means that you use less packaging materials and fewer boxes, which reduces both the dimensional weight and the actual weight of your shipments. Consolidating orders also helps to reduce the handling fees per package, further reducing the shipping cost.

2. Less risk of damage  
When your shipments are consolidated, each item will require less handling and have less space to slide around while on transit, lowering the risk of damage.

3. Excellent consumer experience
By consolidating orders, retailers and suppliers can optimize supply chain efficiencies, which means that customers can receive their orders quickly and safely.

4. Sustainability
Consolidated shipping means you can use less packaging materials such as boxes, foam peanuts, and tape. This helps to reduce waste and environmental impact. Also, there is better cube utilization on trucks as more units are shipped in fewer cartons. That means vehicles require less fuel to ship more products, reducing carbon emissions in the environment.

5. Improved quality control
Consolidated shipping enables you to detect problems with your order or products before they leave the warehouse and put quality control measures in place before your goods are shipped.

How to Consolidate Multiple Orders to Save on Shipping

Consolidated shipping is a collaborative process involving business partners, distribution companies, and retailers. You also need a trusted shipping consolidation company.

A company offering shipping consolidation services receives the items that you want to ship, checks through your order to ensure that everything is in order, takes the goods out of their packaging (but leaving them in the retail packaging), and repackages them into a single box that is just big enough to hold them.

Here are the order consolidation best practices guidelines published by the GS1 US Apparel and General Merchandise Initiative that business partners should follow to ensure a successful consolidation process.

  • Agree on the business process: The full consolidation process should be determined upfront.
  • Review consolidation structure: This step entails reviewing the business and technical areas and how the structure differs from other order or shipment types
  • Preparing for implementation: This has to do with choosing test trading partners, sharing mapping guides, and creating test transactions.
  • Assess readiness to transact: At this stage, you’ll want to test the transactions, resolve issues, and review any changes in the process.
  • Review Initial shipments: In this step, test transactions are audited and tested again for compliance and accuracy.
  • Full implementation: This entails making a decision about whether to go ahead, notifying trading partners of consolidation, and assessing the benefits of the whole process.

If you’re looking to consolidate your shipment and you don't have the means to do it, Easyship can help. We can provide bespoke shipping consolidations services that will help you reduce shipping costs and product damages.

Direct Injection vs. Order Consolidation

Direct injection is a form of order consolidation. Like all other consolidated shipping services, direct injection involves grouping individual shipments together to be sent to the destination country, before being passed on to a local postal service for last-mile delivery.

The main benefit of direct injection over other consolidation methods is that you can access duty exemptions. In the US, the Section 321 exemption means that shipments that are valued at under $800 and arrive in the country through direct injection will not have duties levied on them. In the EU, the threshold is EUR150.

A few other points of difference between direct injection and other consolidated shipping services are:

  • Direct injection shipping always involves goods being shipped by air as bulk cargo; this doesn’t always apply to other consolidated shipments
  • Goods shipped by direct injection are required to clear customs electronically; this doesn’t necessarily apply in other consolidated shipping methods.
  • For shipments made by direct injection, the customer is the “importer of record” instead of the business; for consolidated shipping, the business can still be the “importer of record”

Will Order Consolidation Work For Your Business?

Consolidated shipping can help you navigate carrier rate, dimensional pricing rules, handling fees, and other shipping expenses such as customs duties.

Don’t forget that Easyship can streamline your whole shipping process with automatically generated shipping labels and customs paperwork, automated shipping rules, and branded tracking and packing slips. But, more importantly, we are highly experienced in order consolidation and direct injection and can offer plenty of advice and expertise if you want to use this method of fulfillment.

When you use the right tools, you can quickly implement consolidated shipping for your eCommerce store and begin to reap all the benefits of shipping multiple orders together. This will have a ripple effect on your buyers because you will be able to offer them a positive shopping experience with lower shipping fees.