Groupage transport, simply known as groupage, describes a special type of transport that consists of grouping goods shipped by several different companies in the same load. In international trade, the abbreviation LTT (Less Than Truckload) is often used to refer to groupage transportation. “Consolidation” is another term used. In practice, groupage transportation is the truck, container, etc. of a company that wants to ship goods. It is activated when there is no filling volume. For these companies, shippers specializing in groupage may offer to share any remaining space on their trucks among several shippers.
Groupage freight is a shipping method used when units of goods are transported in packages to form a consolidated shipment, i.e. it can also be considered as a combination of several small shipments in one full container. This shipping method is suitable for single pallets. For a larger pallet quantity, part-load shipping often comes across as a cheaper option.
About Groupage Transportation
Groupage offers many advantages for companies that use this type of transport to ship their goods. It allows them to save on transportation. It prefers groupage transportation and shares all transportation costs with the other sender. He no longer has to pay all delivery charges, as his goods take up only part of the available space in the truck. Groupage offers companies an easier option to ship their goods to different destinations without having to worry about the volume of goods allocated to each destination. Groupage transport increases the quality of service for companies as they benefit from a large number of services through their providers (such as a wider variety of routes).
However, groupage shipping requires more flexibility from shippers when it comes to loading and delivery times of products. The carrier must follow a collection route to collect all the goods before delivering them all, whereas full trucking consists of transporting only one type of goods from point A to point B. In the world of product shipping, groupage positions itself midway between standard delivery services (often a very expensive or inadequate solution to the characteristics of the goods being shipped) and more standard full truckload shipping.
The grouping process generally works as follows:
- General cargo is collected from various carriers and combined as groupage cargo at the warehouse of the intermediary agent.
- After delivery, it is separated again in the relevant warehouses.
Due to its cost effectiveness, shipping as groupage freight is a widely used procedure in logistics. The most important reason for this is that it is a method that directly has the advantage of mixing different shipments and therefore especially cost saving.
Characteristics of Groupage Transport
Groupage transport is particularly recommended for consignment of goods in the following cases:
- When the volume of goods to be shipped is not large enough to fill a full truckload,
- Groupage delivery takes significantly longer than standard delivery when shipping deadlines are not a key criterion, i.e. it requires several deliveries to be grouped together.
- When the shipped goods are on their way to be delivered in different countries,
- When the shipped goods can be easily combined on one or more pallets.
Examples and Practical Applications
For example, a company specializing in lamp production wants to export its production to several countries. Thus, it becomes possible to choose from several transport options, more or less expensive. To avoid large shipping costs, the company’s best option would be to not pay the shipping fee “for nothing”, that is, when a portion of the load is empty. When the volume it wants to send is less than the total load volume available on a transport vehicle, it can turn into a groupage operation.
To do this, the company needs to follow several established stages:
- Searching and selecting a provider specializing in groupage transport,
- Communicating the characteristics of the goods to be shipped, especially the product type, weight and volume,
- Notification of the location of loading and unloading areas,
- When it arrives at the carrier, it can guarantee the grouping of shipments to common destinations while optimizing the available space in the truck.
It is also a part of the sequence of requirements to give the shipment and delivery dates of the goods to the company in question.
Who Prefers Groupage Transportation?
Groupage transportation means that the shipments of many different customers are combined in a single transportation vehicle and shipped in the same direction. Therefore, it saves cost for less load and smaller orders, and offers customers more favorable prices.
Groupage transportation is a very popular option, especially for small and medium-sized businesses, because it offers the opportunity to reach a larger customer base with lower transportation costs. In addition, it is ensured that the goods are safer and less damaged during transportation. The method of transport, called groupage transport, can be carried out using different means of transport. For example, a pickup truck, truck or container can be used. Handling time and shipping cost may vary depending on the size, weight and distance of shipments.
Companies that provide groupage freight services often specialize in collecting and organizing customers’ shipments. These companies carry out the operations of collecting the goods of the customers at a certain center, loading them on the transport vehicle and delivering the customers to the specified address. As a result, groupage shipping is very popular today as a preferred shipping option to save cost and allow smaller loads to be transported more efficiently.
Advantages of Groupage Transportation
Groupage transportation is a logistics method where many customers are brought together to transport small loads on the same route. Of course, this method has many advantages.
Groupage shipping reduces shipping costs by making it easier for customers to move small quantities of cargo. Thanks to this method, customers not only share the cost of their own loads, but also share the cost of other customers’ loads.
Groupage transport causes less carbon emissions by using less means of transport, which is less damaging to the environment.
Less Storage Space
Groupage transport requires less storage space by combining loads. This helps businesses reduce storage costs.
Groupage transport enables more efficient routing and planning by combining loads. This provides faster delivery to customers.
Groupage transportation is a reliable method to meet the transportation needs of businesses. This allows customers to be assured that their cargo will be delivered safely and on time. All these advantages make groupage shipping the preferred shipping method for many businesses.