Consolidation Fee
Definition of Consolidation Fee
A consolidation fee is a charge applied when several smaller shipments are merged into a single larger shipment. The consolidation process is typically handled by freight forwarders or logistics providers to optimise cargo space and reduce costs.
The fee covers the additional coordination, handling, and storage needed to combine different shipments into one container. It’s most commonly used in less-than-container load (LCL) shipping and air freight.
Why are consolidation fees important?
By grouping smaller shipments, companies can take advantage of the lower rates typically reserved for full container loads. Consolidation is especially beneficial for small and medium-sized businesses that do not have enough goods to fill an entire container.
How to get the consolidation fee
To reap the benefits of consolidation, businesses typically work with freight forwarders or logistics providers who offer consolidation services.
These providers handle the logistics of combining shipments, applying the consolidation fee in return for managing the handling, storage, and transport of the combined cargo.
When are consolidation fees used?
Consolidation fees are applied when smaller shipments, often from different shippers, are combined to create a full container load.
What are some examples of consolidation fees?
A typical example of a consolidation fee might involve a UK-based small business shipping products overseas.
Rather than shipping partial loads at higher costs, the business consolidates its goods with other shipments in a shared container, thereby paying a fraction of what it would have cost to ship independently.
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