Why Cooperation is a Profitable Business Model not only during a Pandemic
While at present some transport companies are losing orders, others are inundated with special and extra trips – the Corona crisis has the logistics and transport industry firmly in its disinfected grip. Especially in such extreme situations solutions have to be found with wise and clear minds. And sometimes the answer is not so unknown or so distant. Together we can fill the truck.
We are in a time that most of us have never experienced before: borders were tight, the retail sector remained partly closed and some restaurant kitchens are cold, factories and plants produced on the back burner or not at all. In short: The global economy has stalled. While other industries have come to a complete standstill, the transport and logistics industry has so far gotten off with a slap on the wrist. Although many companies in our sector are recording losses and requesting short-time working due to declining orders, colleagues in other sectors – especially in the food and pharmaceutical industries – are hardly able to comply with the requests. After all, supermarket shelves and medicine cabinets must remain full even during a pandemic. Here it becomes clear how systemically relevant our job is. For us, that means: Pushing extra shifts, opening up new supply channels, establishing secure supply chains. Making optimum use of the available resources is more important than ever during times like these.
A tried and tested answer to this modern challenge is groupage transport – the joint transportation of many different relatively small shipments as a groupage in the main leg of a transport chain. The advantage? Cost saving! Both for the client and for the forwarding agent. On the one hand, the main leg of the transport is better utilized and on the other hand, the client shares the transport vehicle with various other customers. This makes it more attractive for all parties involved. Due to its economic efficiency, groupage freight is a common procedure. This service is frequently used in the forwarding industry as well as by courier, express and parcel services (CEP).
Pre-carriage, main carriage, post-carriage
With groupage transport, the shipping forwarder first collects the goods to be transported from the various clients in the source area and collects them in his transhipment warehouse. There the individual items are combined into tours. This is done on the basis of factors such as volume, weight, urgency and whether the goods have an identical destination or at least the same traffic direction. Once they have arrived at their destination, the loads are now broken up again and split into its individual shipments. Only now do the general cargoes set off on the final journey to their actual recipients.
From A with X, Y and Z via B to C – can that work?
This particular forwarding service therefore involves a whole range of players: the original sender, who commissions the consolidator, who in turn organizes the groupage and puts together the individual shipments; a possible carrier, who – if the shipping forwarder does not take this over himself – takes over the main carriage and transports the goods to their destination; and last but not least, the deconsolidator, to whom the groupage is delivered and who then takes care of the distribution of the individual shipments to the final recipient.
In order to create an effectively working supply chain, it is up to the consolidator to plan the tours in a logistically sensible way in advance, taking into account time and traffic. The utilisation of the cargo space capacity of the means of transport, the correct loading of the cargo space, possible mixed loading prohibitions and delivery priorities along the route should also be taken into account. Furthermore, the groupage shipping company is responsible for creating and dispatching transport documents, invoices and transport accompanying documents. To ensure a smooth flow of data, the various parties are at best connected to each other via interfaces using forwarding software.
Grouped Towards the Future
Although groupage transport is a complex process, it also represents modern transport and sophisticated logistics. What one lacks to order a whole truck, the other fills up. Lean Logistics: no empty runs, no solo efforts, no truck too many on the roads. A method of transport that will become increasingly important even beyond Corona times.