Parcel vs. LTL? Sendflex and ConnectShip Take the Guesswork out of Parcel Consolidation

In an era where "free" and fast delivery shapes consumer expectations, many companies are looking for innovative ways to maintain their margins while optimizing the delivery experience. Parcel consolidation is a key component in emerging strategies, giving shippers the ability to merge individual parcels into a single LTL shipment to reduce costs and enhance efficiency.

Through an innovative collaboration, shippers now have the tools to consolidate parcels early in the order fulfillment process using Sendflex TMS planning optimization and then process LTL shipments using ConnectShip. This strategic partnership is setting new benchmarks in shipping efficiency, enabling businesses to deliver exceptional customer experiences while protecting profit margins.

Why Parcel Consolidation

B2C eCommerce fulfillment is quickly evolving, driven by a surge in online shopping and changing consumer expectations. The demand for same-day delivery is set to soar by more than 20% in 2024, reaching a market value of nearly $10 billion. With Amazon set to expand its same-day delivery capabilities in the year ahead, it is imperative for other businesses to adapt their shipping strategies or risk falling behind.

In response to these evolving market demands, shippers are adopting more innovative shipping strategies to gain a competitive edge. These may include carrier diversification to offer more delivery options and mitigate the risk of service disruptions. Or use cartonization technology to maximize packaging efficiency while reducing waste and unexpected dimensional fees.

Parcel consolidation is another shipping strategy that allows shippers to combine multiple parcel into a single LTL shipment. Once consolidated, the shipment is labeled and documented for transportation to its destination, which could be directly to the end customer or to a hub for sorting and dispatching for final mile delivery.

Parcel Consolidation Benefits

Parcel consolidation offers numerous benefits that can significantly enhance operational efficiency and cost-effectiveness. Here’s a closer look at how leveraging parcel consolidation can be a game-changer for businesses.

Reduce Shipping Costs

Shifting from individual parcels to consolidated LTL shipments can offer financial relief. This mode switch capitalizes on lower LTL costs per pound and reduces the impact of parcel surcharges that have multiplied in recent years. When comparing parcel to LTL, it's important to consider the logistics: although parcel shipments undergo more checkpoints, increasing the risk of loss or damage, they allow for closer shipment tracking. Conversely, palletized LTL shipments ensure goods move and arrive together, reducing handling and the potential for damage. Despite fewer checkpoints and tracking updates, the consolidated approach significantly cuts costs for shipments bound for the same geographic region.

Faster Transit Times

The conventional view of LTL shipping as slow and inflexible is quickly becoming outdated, especially when considering the strategic advantages of parcel consolidation for deliveries in the same area. By employing LTL carriers for drop shipping parcels, businesses can bypass local parcel carrier hubs, streamlining the delivery process. Innovative zone-skipping services, such as those offered by Maergo, exemplify this shift. Maergo leverages commercial jets to transport consolidated parcel loads to distant zones (5-8) in just 2-3 days, matching ground shipping prices. This approach not only accelerates transit times but also maintains cost efficiency, challenging the traditional perceptions of LTL's limitations and presenting a viable, speedy alternative for parcel delivery.

Fewer Damage Claims

Parcel shipping is essential for eCommerce and retail logistics, but it carries a significant risk of product damage, with estimates of damage rates varying between 2% to 11%—a figure that jumps to an alarming 21% for oversized deliveries. The repercussions of damages extend beyond the immediate cost of replacement products and return shipping, as they can deeply impact a brand's reputation and potentially erode customer loyalty over time.

Parcel consolidation offers a strategic advantage in mitigating damage risks. By moving goods as a single consolidated load, parcels have fewer touchpoints throughout their journey, significantly reducing the chances of damage typically associated with multiple handling and transfers within parcel hub networks. This method ensures a safer transit, helps maintain a brand's integrity and customer satisfaction, and lowers the logistical costs associated with damaged goods.

Reduced Environmental Impact

Consolidating parcels into fewer, larger shipments is a strategic move towards more sustainable logistics, as it can significantly cut the number of vehicles needed for transport. This subsequently reduces fuel consumption and minimizes greenhouse gas emissions to align with corporate initiatives for environmental responsibility. As businesses grow more conscious of their environmental impact, adopting parcel consolidation practices can help them achieve a smaller carbon footprint and demonstrate a tangible commitment to reducing the ecological effects of shipping.

Sendflex's Parcel TMS Streamlines Parcel Consolidation

Navigating the complexities of parcel consolidation requires a sophisticated approach, given the myriad of factors involved in the order allocation (OMS) and warehouse management (WMS) processes. Factors include minimum load sizes, destination zones, carrier incentives, customer preferences, promise dates, SKU attributes, and shipping costs. Traditional parcel shipping systems, primarily designed for label printing post-conveyor, fall short in automating these complex decisions.

Sendflex is the next-generation parcel management technology that helps shippers automate decision-making in complicated eCommerce fulfillment environments. Sendflex Parcel TMS features a no-code parcel optimization engine designed to automate complex carrier selection processes, including load consolidation upstream from shipment processing. With Sendflex, shippers can effortlessly navigate the intricacies of modern eCommerce logistics, ensuring decisions are optimized for efficiency, cost, and customer satisfaction.

ConnectShip Automates Parcel and LTL Shipment Processing

ConnectShip is a wholly owned subsidiary of UPS and a leader in automated multi-carrier shipping technology. ConnectShip's cloud platform extends its shipping capabilities across 50 origin countries, supporting a wide array of carriers such as UPS, DHL, Purolator and Purolator Freight, TNT, Canada Post, DPD, GLS, the U.S. Postal Service, Endicia, and FedEx. Beyond small package shipping, ConnectShip makes a direct connection to 48 LTL carriers, facilitating rating and bill of lading processing for shipments originating from the United States, Canada, and Mexico.

Leveraging Sendflex’s advanced capabilities in automating parcel consolidation during order optimization, ConnectShip users gain unparalleled flexibility in processing both individual parcels and consolidated parcels via LTL and air carriers at the shipping stage. This integration represents a significant leap in shipping technology, streamlining the logistics process for shippers worldwide.

Sendflex and Connectship at Work: Intelligent Parcel Consolidation

Sendflex's parcel TMS optimization engine automates consolidation planning upstream from shipment processing. This (video) demonstrates how Sendflex looks across orders to identify consolidation opportunities and generates actionable plans that integrate seamlessly with ConnectShip for execution. This complex process is significantly simplified through the powerful synergy of Sendflex and ConnectShip:

• Select the orders and initiate the planning with a “Create Plan” click.
• Configure the carriers and business rules, including carriers under consideration and specific instructions such as consolidation weight minimums, delivery areas, and carrier incentive plans.
• In the video example, the order optimization plan specifies shipments from a Dallas facility and applies cartonization and consolidation instructions calling for minimum of 150 lbs., use of UPS and LSO services, while adhering to UPS tiered incentives.
• Run the plan, and Sendflex's high performance optimization engine cartonizes, rates, calculates times in transit, and applies instructions at 20k/second.
• Compare plans to visualize the savings.Transportation cost savings can be easily seen where parcel consolidation is enabled.
• Release the plan to shipping.Once a plan is selected, it can be released to Connectship for shipping execution.

This sophisticated integration exemplifies how Sendflex's parcel optimization tools enable shippers to make informed decisions, balancing cost, efficiency, and adherence to carrier incentives. In conjunction with ConnectShip, this partnership paves the way for intelligent, cost-effective shipping solutions.

Sendflex and Connectship Combine to Automate Smarter Decisions

The parcel consolidation use case is another example of how Sendflex and Connectship set new standards for cost-effective and efficient parcel management.

"This partnership will give our joint customers the ability to use our carrier compliance engine with the optimization tools from Sendflex for a complete supply chain solution. Companies have better visibility, control, and a broader choice of carriers by leveraging the joint technologies."

-ConnectShip Channel Management

For a deeper dive into how Sendflex can optimize your shipping operations and explore tailored solutions for your business needs, we invite you to schedule a consultation with our experts today.

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