What is consolidated shipping, why does shipment consolidation matter, and how can order consolidation help you save?

You’re doing everything you can to incentivize your customers to shop

You’re running online email campaigns. You’re offering checkout coupons in different channels. You’ve got influencers driving TikTok sales! You’re creating small, targeted opportunities to shop. And it’s causing chaos in your facilities.

Each order is a unique event, but what if they are all for the same person? It’s not uncommon for a savvy customer to hit all these channel deals and generate 3 separate packages.

That’s additional shipping costs, time, materials, and effort for you. The consumer doesn’t even like receiving 3 separate boxes! When they do, they assume that the cost of fulfillment is baked into the price somewhere, and rightly so.

What if your fulfillment system could detect these overlapping demands and ensure they are handled as a single request? That’s consolidated shipping.

What is consolidated shipping? 

Also known as order consolidation, consolidated shipping is a standout shipping management capability of modern order management systems (OMS). Consolidated shipping allows retail and ecommerce businesses to combine orders into a single shipment, which can drive significant cost savings and improved on-time delivery rates. 

Instead of shipping multiple packages to the same destination, you can send a single shipment to slash your packaging and shipping fees.

This OMS feature provides a single response to diverse demand signals. Without order consolidation, businesses that receive thousands of orders daily must process and ship each order individually, the negative impact of which has reached a fever pitch.

Why consolidated shipping matters

Old or manual order processing technologies lead to longer delivery times, higher packaging and shipping costs, and higher labor costs. With intelligent order consolidation in an order management software system, there’s no reason for any business to send multiple packages to the same location from the same warehouse.

Shipment consolidation solves today’s biggest problem: “Do I focus on delivering customer value or being profitable?” Most think you can’t have both, but an OMS with order consolidation changes this.

Consolidating orders going to the same location offers rapid, substantial benefits, including significantly lower shipping expenses and better use of your staff’s time before the package ever leaves the building. The net benefits of consolidation shipping include:

  • Lower shipping costs
  • Increased order accuracy
  • Fewer chargebacks
  • Reduced labor costs
  • Better customer experiences, leading to higher sales and repeat business

How order consolidation works

Order consolidation strategically holds orders to allow shipments going to the same location to be collected, packaged, and shipped together. Several factors can drive this, but the simplest are lead time and service level agreements.

An example

If you can ship an order to a customer in 3 days, and your SLA allows for 5 days, then it makes sense to hold that order for 24 hours to see if more orders come in. During this time, marketing can push add-on offers in email, coupons to other channels, or wait for FOMO purchases to come in.

How much can consolidated shipping save?

On average, order consolidation saves ~$5.50 per additional shipment eliminated through reduced package spend, elimination of duplicate work, and efficient fulfillment processes.

In a trial, one of our customers was able to remove 140,000 shipments in a year using a 24-hour consolidation window. That’s $865,000 saved by working smarter.

How to ship multiple packages cheaper (and greener)

The easiest way to ship multiple packages cheaper is to incorporate an OMS such as Deposco’s Bright Order, which offers order consolidation as part of its integrated, AI-driven shipping management solution. Bright Order is a game-changer for businesses looking to enhance operational efficiency and reduce costs.

In addition, order consolidation benefits your business in the areas of customer satisfaction and environmental responsibility. Fewer shipments mean less packaging waste and lower carbon emissions, which appeals to the growing consumer demand for sustainable business practices. Read more about technology’s new role in ESG-friendly business.

As the retail landscape continues to evolve, investing in an OMS with consolidated shipping capabilities is not just a smart move—it’s a necessity.

At Deposco, we understand the importance of customizing your order flow to create labor and shipping efficiencies. Our intelligent order consolidation OMS solution allows you to easily combine similar customer orders to reduce shipments, shipping costs, and labor hours – all things every business wants to put back into its bottom line.