Groupage transport, simply known as groupage, defines a special type of transport consisting in grouping together goods dispatched by several different companies into a same load. In international trade, the abbreviation LTT (Less Than Truckload) is frequently used, referring to groupage transport. “Consolidation” is another term used.
In practice, groupage transport comes into play when a company wishing to dispatch goods does not have a large enough volume to fill a truck, container, etc. For those companies, transporters specialized in groupage can offer to share any space remaining in their truck between several senders.
For companies resorting to this type of transport to dispatch their goods, groupage offers several advantages. It enables them to save money on transport. By opting for groupage transport, the company shares all transport costs with the other senders. It no longer has to pay all the delivery fees, as its merchandise only occupies part of the space available in the truck. Groupage offers companies an easier option for sending their merchandise to different destinations, without having to worry about the volume of goods dedicated to each destination. Groupage transport improves service quality for companies, as they benefit from numerous services via their providers (such as a wider variety of itineraries).
This being said, groupage transport requires more flexibility from senders regarding the products’ loading and delivery times. The transporter must first run a pick-up route to collect all the goods before delivering them all, whereas full-truck transport would simply consist in shipping one type of merchandise from a point A to a point B.
In the world of product shipment, groupage positions itself halfway between standard delivery services (a solution often too expensive or poorly-suited to the dispatched goods’ features) and more standard full truck load transport.
Groupage transport is particularly recommended for dispatching goods when:
The volume of goods to dispatch is not big enough to fill a full truck load;
Dispatch deadlines are not a key criterion (groupage delivery is considerably longer than standard delivery, as it requires several deliveries to be grouped together);
The dispatched goods are aimed for delivery in different countries;
The goods dispatched can easily be combined onto one or several pallets.
A company specialized in the manufacture of lamps wishes to export its production to several countries. It can thus choose between several transport options - that are more or less expensive. To avoid major transport expenses, the company’s best option would be not to pay transport “for nothing” (with part of the load empty). When the volume it wishes to send out is smaller than the total loading volume available in a means of transport, it can turn to groupage.
To do so, the company must follow several set stages:
Searching for and selecting a provider specialized in groupage transport;
Communicating the features of the goods to be shipped (type of product, weight, volume, etc.);
Communicating the location of loading and unloading sites.
As for the transporter, it will make sure to group together shipments to joint destinations, whilst optimizing the space available in the truck. It will then provide the company in question with the goods’ loading and delivery dates.