Updated: Aug 7, 2021
As the major US Logistics providers struggle to add the capacity required to handle the unprecedented shipment volume in the US, their pricing must increase to pay for the infrastructure needed to support this demand. Rates have increased by as much as 60% for some services as a result. Where they make it up in droves, however, is whenever a shipment crosses a border.
Whether a shipment is destined to a neighboring market here in North America like Canada, Mexico, or another point around the globe the cost to ship for a small to midsized shipper who would like to expand into to another market can be cost prohibitive. Even a 10 lb. shipment can cost upwards of $100 to send to another country. So, what can a small to midsized shipper (and many large volume shippers) do to mitigate the high cost of shipping to points outside of the US? The answer is to use one of the logistics industry's best kept secrets - that is, that almost all small package and freight carriers offer a "consolidation" service. But what exactly is consolidation, and how difficult is it to access these services?
First, it is important to understand that your shipments are already being consolidated by the logistics companies you are using today. Companies like FedEx, UPS and major LTL and Air Freight companies use a "Hub and Spoke" system to get your package from point A to point B. Shipments that are picked up at your location are "consolidated" with other companies’ shipments at a local branch office, then forwarded to a central hub where they are sorted and "re-consolidated" to their destination and delivered. In short, you are already buying a consolidated service, but paying as if your shipment was picked up and sent directly to your customer. They do offer expedited direct services for a premium, but they are expensive and used primarily by Life Science, Medical or Industrial firms with critical deadlines that can be lifesaving or keep a factory running. So, you already use consolidated services, but are paying as if your shipment was being sent direct.
So, how do I save money? Well, first, if you have as few as 5 individual shipments to one country (like Canada, Mexico, the UK, etc.) companies like FedEx, UPS and other international/cross border companies offer services that can consolidate these into one air, ground and ocean freight shipment, customs clearance, and provide direct delivery to multiple addresses within a destination country... the benefit is your pickup, linehaul, customs clearance are all rated as one shipment... and destination delivery is rated as if your shipment originated in the local country. The savings are substantial as a result. The brand names for these services are Trade Direct (UPS), International Priority Direct Distribution (FedEx); and while many cross border and international forwarders offer similar services under different brand names the concept is the same.
The territory salespeople for your shipping company may not be familiar with these services, or reluctant to introduce you to them as it reduces their revenues (and commissions). If this is the case, try reaching out to their Logistics or International specialists who will be eager to introduce you to these services.
Or contact us and we will be pleased to help assess your shipment profile and source a carrier offering these services so you can compete and profit from the significant growth in global trade.
John T. Costanzo
Founder & CEO
LDK Global Logistics