Companies with temperature-sensitive freight that don’t have the volume to ship direct, full truckloads must rely on a limited number of refrigerated LTL carriers. Because demand exceeds freight capacity, particularly in the chilled and frozen category, freight costs are high.
An alternative exists to address many of the service and cost shortfalls of temperature-controlled LTL networks. A pool distribution strategy for refrigerated trucking combines freight moving to the same place at the same temperature range. You can arrange this collaboration yourself, but most often it’s managed by third party logistics providers (3PLs) who have relationships with multiple shippers with like products and can play matchmaker.
The pool concept works at both origin (pool consolidation) and destination (pool distribution). At origin, 3PLs or carriers establish a regional consolidation center where companies ship finished goods from the factory for distribution to other regions of the country. The 3PL works with multiple shippers of temperature-controlled freight to fill freight capacity.
Companies moving full truckloads into a region can use local pool distribution to drive down refrigerated LTL freight costs. Pool distribution is ideal for short shelf life products, such as confections, that can’t afford to be stored for long periods.
With a pool strategy, retailers submit orders and requested arrival times and food shippers arrange delivery to meet these requirements. It’s the perfect strategy for a zero inventory model.
Benefits of Pool Distribution: