The Benefits of Pooling Distribution
by Pathlie Lee Business consultant
What is pooling distribution? It’s a rather simple logistics strategy that involves a group of shipments destined for the same general region. It’s similar to the concept of a carpool where several people ride together to save time and money on gas. So individual shipments are pooled together to fill delivery trucks or trailers. If done in the beginning of the shipment this is called pool consolidation, or if done near the end of the shipment, it’s called pool distribution. Here are some of the main benefits to consider if this process is a fit for your business.
This is probably the biggest benefit, since you are maximizing space and not transporting with half empty truckloads. Paying for several individual shipments as opposed to one full shipment can cost a lot more. But with pool distribution, you can maximize efficiency and end up paying less money per miles shipped. “Less-than-Truckload” (LTL) is a common term in the industry to define shipping trucks that do not carry full cargo. LTL can involve several individual legs and handoffs throughout the delivery process, which can also end up costing you more money.
LTL rates can become quite complex since they are calculated based on many different variables such as weight, dimensions, shipping origin and final destination, calculating the freight, and the number of units or pallets being shipped. So it’s not just a simple calculation of mileage or time. However, the pooling method is usually based on weight and miles to determine the final rate. It can be much easier to know exactly how much shipments will cost, allowing you to plan accordingly.
Pool Distribution Speed
LTL shipments usually go through several hubs or warehouses before reaching their final destination. This can add a significant amount of time to the entire delivery process, especially if the shipment changes trucks at each stop This method can sometimes take twice as long as pooling distribution. Reducing The number of times shipments change hands, can also help prevent loss or damage, which can also end up saving a lot of money over time.
Higher Level of Service
Pool distribution shipments can result in a much higher level of service for your end customer, since there is a higher level of delivery accuracy, time management and tracking ability. It also allows you to give more personal attention to your customers’ needs and expectations. Higher shipping quality is becoming more and more of a priority for customers who are more comfortable ordering products, including higher-priced items that require more attention and care during the entire shipping process.
Create and Establish a Solid Network
Pooling involves working with other companies and service providers, so it’s a treat way to build business relationships in different regions. This allows you to get more flexible and creative when serving and reaching your customers. This can help open up other markets and regions to expand business, finding ways to mutual benefit others along with your business.
Created on Mar 25th 2019 13:13. Viewed 77 times.