As a shipper, you will constantly be looking for ways to improve your bottom line. Shipping expenses can quickly add up and ultimately affect delivery times.
Pool distribution is much like less than truckload (LTL) shipping because you can ship products on a single truck with other orders. But what’s the difference between the two? For starters, pool distribution doesn’t require you to share the truck with other companies.
Instead, you’ll send multiple shipments of your product. Keep reading to find out exactly how this works and the many different ways it can benefit your business.
How Does Pool Distribution Work?
Multiple shipments going to the same geographic region are typically consolidated and then picked up from your distribution center. To optimize trailer space, the shipment is loaded floor-to-ceiling before being sent to a regional terminal.
Upon reaching the terminal, the shipment is offloaded so it can then be scanned and organized according to the location of the package’s final destination. If need be, the packages will also be shrink-wrapped and placed on pallets before being reloaded onto local delivery vehicles for transport.
What Is Load Pooling?
Companies don’t always have enough product for pooled distribution to work in their favor, so they may decide load pooling is a better option. This is when the company splits the truckload cost with another organization’s pool traveling to the same region.
Example of Pool Distribution
Let’s say you have a few LTL-sized shipments that need to go to the Southwest region of the U.S. After arranging a pick-up date and time with your carrier, the shipments will be picked up and loaded onto a truck that is driving to the specified region.
Once the load reaches the Southwest region distribution center, it will be offloaded. Each package is scanned and sorted based on their delivery addresses. Packages are then reloaded onto local delivery trucks or vans and delivered to the end user.
Benefits of Pool Distribution
Pool distribution is popular because it saves time and money, but there are other benefits the strategy provides to shippers. Here are the top five reasons you may want to take advantage of this service.
There is always a lot of overhead involved when you don’t consolidate your shipments. By using multiple trailers, you’ll need more staff in order to load and unload shipments.
Depending on the shipment size, you may need to pay your workers overtime to have the items delivered within the shipping window. The first and last few miles of the trip are the most costly for the truck.
That’s because they have to make multiple stops in order to pick items up and then drop them off. When you use pool distribution, there’s no need for the driver to make multiple stops on the journey, thereby saving time as well as money.
Improved Supply Chain Visibility
Pool distribution allows you to track the shipment through each leg of its journey. This is important because if an issue arises, you can do what’s necessary to correct the matter right away. That type of supply chain visibility can help you avoid difficulties with the end user.
Lower Carbon Footprint
Pooling your shipments means you’re not placing multiple trucks on the road, which is great for the environment. Many companies are looking for ways to lower their carbon footprint, which is one of the most obvious and simple ways to do so.
Fewer stops along the route mean the shipment will reach its destination quickly. Each time the truck stops at a distribution center, it will be unloaded so that the workers can retrieve the load that is supposed to be dropped off.
The truck is reloaded before it heads to the next stop, where the same process will occur. As you can imagine, this can be time-consuming, making it one of the reasons many opt for pool distribution rather than LTL shipping.
Calculating shipping costs for pool distribution isn’t a convoluted process that requires a degree in mathematics to figure out. The costs are based on weight and miles, so there’s no complex formula used to determine the rates.
Why Pool Distribution Might Not Be Right For Your Business
There are plenty of reasons why pool distribution works for many small companies, but that doesn’t mean it’s right for you. Let’s examine why this strategy may not be best for your business.
For you to take full advantage of the benefits of pooled distribution, you must have a consistent stream of LTL-sized shipments to fill the truck. If not, you won’t see the value in this service.
Do you ship items that require special handling? Are the products fragile and require special packaging? If so, make sure you don’t ship them with heavy washing machines or other appliances that can shift during travel and ruin your product.
If your company ships different products, make sure the items pooled are similar to minimize the possibility of damage. If the items are too dissimilar, pool distribution may not be the right option.
The Right Partner
Your partner should have a well-established network within the region your products are shipped and where your factory or distribution center is located. If they don’t, the logistics will get complicated, which defeats the purpose of pool distribution.
Everyone does not readily welcome change, and some companies find that integrating a new process isn’t worth the hassle. The overhaul of their business may take months to implement, and they may risk losing business during that period.
Employee schedules may have to change to accommodate the new process, which may not fit with the lifestyle of some employees who may leave the company. The volumes shipped may also change, requiring a new budget to be written. Many companies won’t see any benefit in making the switch.
Pool Distribution vs Pool Consolidation
Pool distribution is when the shipment is being prepared for its final destination. The shipment is scanned at the distribution center and loaded onto a vehicle to be delivered to the end user.
Pool consolidation refers to the first half of the trip when multiple vendor shipments are merged with other loads. These shipments are picked up from different locations or one distribution center and loaded onto one truck.
Jump In The Pool And Test The Waters
If you think pool distribution is right for your business, the best way to find out if this is true or merely just a hunch is to test the waters. Speak with other shippers who handle products and volumes similar to yours. Then, find out who they use for pooled shipments.
Finding a reliable partner that utilizes state-of-the-art equipment to transport your goods is important. Pool distribution is a straightforward process that will save time and money in the long run.
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