Transport of Groupage Cargo
What is LTL shipping in road logistics?
LTL transportation, or transportation of consolidated cargo, is a type of freight transportation where a shipment is formed from several batches. Individual cargo from different customers and manufacturers is most often transported to a consolidation warehouse, where a larger cargo consignment from different customers is formed. This consignment will then be loaded into the same vehicle and will follow the same route. Delivery of small batches of goods to distant regions can be costly and unprofitable. Combining cargo from different suppliers into groupage cargo allows saving money by reducing the overall cargo transportation costs. Delivery costs depend on the size of the cargo: the larger the size and the weight of the cargo, the higher the delivery cost. The cost of transportation also depends on the cargo destination. Delivery can either occur directly to the customer (“door-to-door” delivery) or to a temporary storage warehouse (TSW). In the latter case, the delivery cost will be lower.
The advantages of LTL transportation are:
- Efficiency. The sender does not have to pay for the whole vehicle, but only for the delivery of a specific small batch of goods.
- Ability to choose the delivery method. Cargo can be delivered in several ways: “door-to-door”, “door-to-warehouse”, “warehouse-to-warehouse” and “warehouse-to-door”. This allows to optimize transportation costs between the shipper and the recipient.
- Reduced risk of damage. Due to the fact that the carrier combines several shipments of goods into one vehicle and packs it more tightly and securely, the likelihood of damage is reduced.
There are also disadvantages of this type of delivery: the cargo must be compatible with each other; in cases where any part of the transported goods is subject to customs inspection, the entire batch is delayed, which may affect delivery times.
Delivery of groupage cargo can be organized by different types of transportation, such as road, maritime, rail, air as well as by combining these types.