The dynamic growth of e-commerce means that logistics and transport are becoming one of the key elements of competitive advantage. Customers expect fast, cheap and reliable delivery, while at the same time the costs of handling shipments are rising.
The transport of small shipments of varying weights and dimensions poses a particular challenge. It accounts for a significant portion of the costs in online commerce.
Optimising the costs of groupage transport is a real opportunity to increase the profitability of an online store and improve customer service.
Jasek Transport offers proven logistics solutions for businesses. Our transport services are based on the commitment of our drivers, care for the cargo and safe delivery.
Trust our knowledge and experience in groupage transport – contact us to reduce delivery costs in your e-commerce business.
In this article, we explain how groupage transport can reduce delivery costs in the e-commerce industry.
What is groupage transport?
Groupage transport is the transport of relatively small and light shipments that do not require the entire cargo space of a vehicle. In practice, this means combining multiple parcels from different senders into one collective transport. This solution is commonly used in e-commerce, where individual orders or small batches of goods predominate.
In logistics, a distinction is often made between groupage transport and full truckload (FTL) transport. In the groupage model, shipments from different senders are consolidated at transhipment terminals and delivered to multiple recipients on optimised routes. This solution works well for smaller loads that do not require the entire space of the vehicle to be reserved.
Full truckload (FTL) transport, on the other hand, involves the use of the entire cargo space by a single customer — the vehicle travels directly from the sender to the recipient, without transhipments or additional loads from other customers.
In e-commerce, groupage transport is crucial because it enables flexible deliveries, reduces unit shipping costs and allows you to reach a wide range of recipients. It is also a solution that better responds to changing demand related to seasonality or promotional campaigns in online shops.
Challenges in e-commerce logistics related to groupage transport
Groupage transport offers great flexibility, but at the same time generates a number of challenges that affect costs and customer service quality. In e-commerce, the following are particularly important:
1. A large number of shipments with low unit value
Online shops often fulfil many individual orders instead of large batches of goods. This increases the cost of handling each parcel and requires precise organisation of the process.
2. Consolidation and sorting of shipments
Combining parcels from different customers into a single shipment requires efficient warehousing and transport systems. Lack of effective consolidation leads to delays and additional costs.
3. Demand volatility and seasonality
Promotions, holiday periods and sales cause a sharp increase in the number of orders. Companies must flexibly adjust their transport and warehouse resources.
4. Last mile costs
The most expensive part of delivery is the so-called last mile, i.e. delivering the parcel directly to the customer. A large number of addresses and small shipments make this stage of logistics particularly costly.
5. Customer expectations
Buyers expect fast delivery and attractive prices. This puts pressure on online shops, which have to find a compromise between service quality and profitability.
Consolidation of shipments
Consolidation involves combining multiple smaller parcels into one larger transport batch. This allows for more efficient use of cargo space and reduces the unit cost of delivery. In practice, this means that instead of sending several small parcels separately, they are transported together and only sorted at the sorting facility or local distribution warehouse.
Consolidation is particularly important in e-commerce, as it reduces the number of trips and minimises empty vehicle mileage. Online shops can use it both in-house (e.g. combining orders placed within a short period of time by the same customer) and by using the services of logistics operators who offer advanced consolidation solutions.
Benefits of consolidation:
- lower transport costs,
- shorter shipment handling times,
- better use of cargo space,
- less environmental impact thanks to a reduction in the number of transports.
Negotiating rates and selecting the appropriate carrier
The costs of groupage transport largely depend on the rates agreed with carriers. Online shops that generate a larger volume of shipments have the opportunity to negotiate prices and terms of the contract. It is worth comparing offers from several transport companies, paying attention not only to the price, but also to delivery time, reliability and quality of service.
It is good practice to match the carrier to the type of shipment and the specifics of the market. For example, in the case of light parcels, courier companies with a developed network of collection points often work better, while for heavier loads, companies specialising in groupage transport may be more advantageous.
Flexibility is also important in e-commerce – the ability to offer customers several delivery options. This not only reduces costs for the shop (by choosing the cheapest solutions in specific situations), but also increases buyer satisfaction, as they can decide for themselves whether they prefer faster or cheaper delivery.
Benefits of choosing the right carrier:
- lower average unit costs,
- better alignment of services with customer needs,
- greater reliability of logistics processes,
- flexibility and scalability as your shop grows.
Automation of logistics processes
One of the most effective ways to reduce groupage transport costs is to automate processes. Manual management of shipments, labels and documentation is time-consuming and increases the risk of errors. Implementing the right IT tools can streamline order processing and reduce operating costs.
In practice, the most commonly used tools are:
- TMS (Transport Management System) – supports route planning, transport cost control and shipment consolidation.
- WMS (Warehouse Management System) – facilitates warehouse management, order picking and stock tracking.
- Integrations with carriers – automatic generation of labels, waybills and real-time shipment tracking.
Automation speeds up processes, allows for better use of resources and reduces the cost of handling a single parcel. What is more, it enables data analysis and logistics optimisation based on actual indicators, such as delivery time or last mile costs.
Benefits of automation:
- reduction in operating costs,
- fewer errors in order processing,
- faster delivery,
- better control over logistics processes.
Packaging optimisation
Packaging has a direct impact on groupage transport costs. Boxes that are too large in relation to the size of the product waste loading space and generate additional transport costs. What is more, carriers often charge based on the dimensions of the parcel, not just its weight.
Well-fitting packaging allows you to:
- minimise empty space – so that more parcels can fit in a single shipment or on a pallet,
- reduce transport costs – smaller volume means lower transport rates,
- increase the safety of goods – sturdy and appropriately selected materials reduce the risk of damage,
- meet customers’ environmental expectations – lighter and smaller packaging means less material consumption and a lower carbon footprint.
In practice, online shops are increasingly investing in systems for automatically adjusting the dimensions of boxes or using modular packaging that can be flexibly adapted to different products. Such solutions not only reduce costs, but also improve the brand’s image as an environmentally conscious company.
Flexible delivery options for retail customers
Offering a variety of delivery methods is a way to reduce transport costs and increase customer satisfaction at the same time. Flexibility is very important in e-commerce – buyers want to decide for themselves whether to choose a faster or cheaper delivery method.
The most commonly used solutions are:
- collection at points and parcel lockers – this option reduces last mile costs and allows for more efficient route planning,
- economical delivery with longer lead times – customers who do not need their shipment ‘tomorrow’ can take advantage of a cheaper option,
- free delivery for orders above a certain amount – this encourages larger purchases, which improves profitability and reduces the unit cost of delivery,
- diversification of carriers – integrating several transport companies makes it possible to match the shipping method to the type of product and customer preferences.
The introduction of such solutions allows online shops to flexibly manage the costs of small parcel transport and at the same time respond to growing consumer expectations.
The benefits of well-planned groupage transport
Well-planned groupage transport in e-commerce not only reduces expenses, but also improves overall customer service. Effective shipment management translates into tangible business benefits:
- Lower unit delivery costs – thanks to consolidation, optimal packaging and process automation, each parcel generates a lower financial burden.
- Greater customer satisfaction – flexible delivery options, predictable delivery times and fewer delays create a positive shopping experience.
- Scalability of logistics – an efficient transport system can be easily adapted to the growing number of orders, which facilitates the development of the shop.
- Better control over processes – the implementation of IT tools and cooperation with appropriate carriers allow you to monitor costs and respond more quickly to changes in demand.
- Strengthening the brand image – eco-friendly packaging, punctual deliveries and transparent logistics communication have a positive impact on how customers perceive the store.
Groupage transport in e-commerce – summary
Groupage transport is one of the pillars of logistics in e-commerce. When properly organised, it not only reduces costs, but also ensures convenience and predictability of deliveries for customers. The key factors here are shipment consolidation, the right choice of carrier, process automation, packaging optimisation and flexible delivery options.
Online shops that invest in optimising small parcel transport gain a competitive advantage. Their deliveries are cheaper, faster and better tailored to the needs of their customers. This translates into higher profitability and a better shopping experience.
