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Consolidated Freight Terminology
If you are thinking of using consolidating freight delivery to ship your merchandise faster and more cheaply, there are a few things to know about the process before beginning. Consider the following terminology before choosing to work with transportation and delivery companies.
Consolidating Freight Company - First, to ensure your understanding of the genre, a consolidated freight company is one that groups together several independently consigned cargo shipments to create one larger shipment. This saves both the companies and the consumers money.
Consignor - The consignor is the person or business entity who is requesting that the cargo be shipped. This can be the owner of the merchandise or an intermediary who is brokering the delivery on behalf of another carrier service.
Consingee - The consignee is the person or business that receives the delivery. This person or representative typically needs to provide some sort of documentation to complete the transaction.
Tariff - For international transportation of goods, there are often rates that are charged to all air, land or sea liners. These charges are due to customs for the final destination country and are worked into the cost of shipment throughout the industry.
Transshipment - Often, goods can be transferred from one consolidated freight company to another in an effort to expedite delivery. This is referred to as transshipment. Temperature controlled, fragile, or perishable items are not recommended for transshipment routes.
Valuation Charges - Shipping companies carry liability insurance for damaged or lost goods. However, if a consignor claims a value that is greater than the carrier's liability coverage, valuation charges will be applied.
The main idea of freight consolidating shipping is to save everyone involved money. If the company shipping the product is able to transport more in one cargo load, then this lowers the overall cost for production. This lower cost is sometimes then reflected on the consumer price of the product, which leads to more purchases and a boost in the industry. Often a broker is employed to act as an agent for the company and find the cheapest shipping method.
Freight consolidation can be done in a number of ways. The most common way is by truck carrier, where the cargo load is driven across country for delivery. This method is reserved for cheaper goods or goods that have less chance of spoiling if they are employed solely. This carrier is often the least expensive way to ship since there are less people involved in logistics (dispatch and driver mainly), but it takes the longest since drivers have to rest and truck motors can't run continuously for days. Often trucks are utilized on a smaller scale to help manage flats after they have been transported by a larger agent.
Another way to transport on land is by railway line. This is faster than a truck with less stops along the way, but the rate of cost increases with speed. With trains, you still need to have someone pick up the goods from the station and forward them to the purchasing company. In order to forward consolidating goods to other countries across the oceans, sea freighters are employed. This method takes shipping containers longer than sending by air, but is less expensive since more goods can be shipped at the same time. Transporting goods by air is the fastest method, but probably the most expensive since planes have smaller cargo holds.