Our Vice President of Corporate Development, JP Wiggins, spoke to Adrian Gonzalez of Talking Logistics and discussed the use of pool distribution to gain additional LTL capacity. JP and Adrian covered three main aspects, including, what is pool distribution, why is it worth considering in today’s transportation environment, and how a transportation management system (TMS) helps enable pool distribution. Keep reading for an overview of JP and Alan’s conversation, along with a link to the podcast video.
What is Pool Distribution?
Pool distribution is a way to leverage cross-docking operations by sending loads to regional shipping terminals, known as a pool point, for final delivery by the LTL carrier. The most effective way is by consolidating LTL shipments into a full truckload and sending that to the shipping terminal of a regional LTL carrier. From there, the regional LTL carrier breaks the full truckload into LTL shipments to send on to the final destinations. Shippers can also send LTL shipments to regional LTL shipping terminals, but this is more expensive than consolidating your original LTL shipments into a full truckload.
Pool distribution is more efficient than the alternative interline approach, which involves sending separate LTL shipments through your regional LTL carrier, who then hand it off to a different regional carrier at a cross-dock within the final delivery geography.
Why is Pool Distribution Worth Considering?
The driving factor of using pool distribution is that it provides you with more carrier options and helps solve carrier capacity constraints. When effectively executed, pool distribution also consolidates separate LTL shipments into one full truckload during the first leg of the journey to save additional money.
As national LTL carrier capacity crunches continue, shippers are becoming more strategic in the way they send their products. Finding different TL and LTL carriers combinations at both the national and regional levels maximize a shipper’s option to operate cost-effectively. Additionally, if it’s possible to wait on an LTL shipment, then it’s more affordable to combine LTL shipments into a full truckload and leverage the regional LTL carriers for those final delivery legs. The difficulty with pool distribution is that it’s tough to see any ROI with manual execution. To experience the most value, shippers should leverage a dynamic transportation management system that can plan pool distribution routes automatically.
How can a Transportation Management System Help Enable Pool Distribution?
A TMS, like 3Gtms, can completely automate pool distribution from the point that an order is received through to the financials. Logistics managers just need to input the carriers they’ve contracted with and which shipping terminals fall within their contracted geographies. From there, the TMS should factor in cost and time by evaluating items like carrier rates, accessorials, demurrage, reliability, custom constraints, capacity, and others. The system also needs to provide visibility when shipments are in transit with statuses and status changes, so all stakeholders have complete awareness.
The other key element is automating the financial side of the shipment. A dynamic TMS performs freight auditing to track the quoted costs and audits the bill against items like prorating, custom charges, markups, cross-dock fees, and more.
When executed successfully, a solid pool distribution strategy is a wonderful pathway toward shippers alleviating carrier capacity concerns and high shipping costs. It’s also a function that modern TMS software automates so that logistics managers can easily identify the best terminals and regional LTL carriers for each load.
Do You Think Pool Distribution Could Help You?
Contact us to learn how 3Gtms can arm you with the technology you need to leverage pool distribution in your operations.
Or, read our recent article about overcoming LTL capacity challenges with a TMS that delivers a robust carrier network, automatic rate shopping, and automation tools.
For more information, visit www.3gtms.com, call 203-567-4610, or email email@example.com.