As the business world grows increasingly competitive, companies are on a constant search for ways to streamline their operations and cut costs. One powerful solution? Pool distribution.
By consolidating multiple shipments with similar destinations into a single truck bound for a regional distribution center, rather than sending smaller less-than-truckload (LTL) loads separately, companies can optimize their supply chains and save on shipping costs.
Pool distribution is best suited for larger volumes of goods shipped on a consistent basis. It can be a particularly effective strategy for retailers, who have multiple stores in a given market and wish to combine loads for the majority of their time in transit before having them split at a regional hub or cross-dock. Another use case would be regional small parcel distribution service, for businesses seeking a more flexible and/or affordable alternative to big-name national carriers.
Third-party logistics (3PL) providers with expertise in this area can help companies plan and execute this game-changing strategy.
Unlock the advantages of pool distribution strategies with a 3PL vendor
With a wealth of experience, a 3PL provider can manage all the intricate logistics required to bundle multiple shipments into one cost-effective load. In many cases, the 3PL will consolidate shipments from multiple clients for maximum efficiency.
Once shipments have been consolidated into a single shipment, they’ll be transported to a strategically located regional hub or cross-dock, sometimes known as a pool point.
What is a pool point in the pool distribution process?
A pool point is the location where goods are further sorted, consolidated and shipped to other destinations by the shipper’s 3PL partner. At the pool point, the pool shipment will be offloaded, scanned, and organized by where the freight is headed. Shipments are then reloaded onto smaller, local delivery trucks or vans for their final mile delivery. These pool point facilities act as a vital intermediary between the shippers and the final delivery destinations.
A 3PL can also manage the process of reverse pool distribution, picking up goods from multiple locations (for example unsold goods at retail stores) and consolidating them into a single shipment back to the client.
Supply chain visibility makes pool distribution run smoothly
To successfully execute a pool distribution strategy, the 3PL vendor utilizes transportation management technology to track the chain of custody as the product is shipped, received at a regional facility, broken down into smaller lots, and delivered to customers across multiple locations. This level of supply chain visibility is essential to the smooth operation of what is otherwise a somewhat complex process.
Evaluating pool distribution experience and expertise
When evaluating 3PL pool distribution company for your pool distribution needs, it’s crucial to assess their experience in executing this strategy. Look for a provider with a proven track record of successful pool distribution and consolidation projects and a deep understanding of the unique challenges and requirements involved in this shipping method. As with any outsourced logistics solution, look for a vendor with a strong commitment to customer service, and the references to back up any claimed capabilities.
Assessing regional network and capabilities
Another critical factor to consider when choosing a 3PL for pool distribution is its regional network and capabilities. Do they have pool point locations that make sense for your needs? If they’re not already servicing the region, it may be more challenging to make the numbers work in your favor. A strong regional presence, along with a well-developed network of distribution centers and carriers, should ensure that your shipments will be efficiently consolidated and distributed within the target region.
The right fit to make pool distribution work
The benefits of pool distribution are only realized if there’s a sufficient volume of goods being shipped on a relatively consistent basis to justify the strategy. Retail pool distribution can be an effective use case. Regional small parcel distribution is another area where a 3PL can explore pool solutions.
An experienced 3PL can assess shipping needs and patterns, and identify opportunities for consolidation and pooled transit. By selecting the right 3PL provider for your needs, if conditions warrant it, pool distribution can provide significant supply chain savings when compared to LTL shipping. Learn more about pool distribution here. Want to know if pool distribution is a fit for your business? Contact Expak today.