At Cole International, we believe that the more you know, the better your goods will go. Our Explainer posts provide valuable information you should know about before making your next move.
We understand that the logistics industry involves complex processes, regulations, and definitions that can be overwhelming to navigate. Cole's Explainer series breaks down key concepts into bite-size knowledge that's easy to consume.
In this Explainer, we’ll examine load optimization in logistics, including a look at how it works and the available business benefits.
Load optimization is the most efficient use of available logistics resources for shipping, including available operators, vehicles, and storage space. Typically, the objective of optimization aims to achieve the largest possible volume of load capacity, without compromising safety, customer satisfaction, and compliance. A variety of logistical elements and data points must be considered when engaging in load optimization. Software plays a significant role in simplifying the process and maximizing the benefits of optimization.
The way that businesses achieve load optimization will differ from one company to the next. After all, every business has its own network of suppliers, shipping capabilities, and supply chain partners. In general, the procedures that drive load optimization include the following steps:
An initial step of load optimization involves collecting data and feeding it into your software. Data includes product dimensions, container space, product weight, weight capacities, and other relevant shipping information.
After feeding data into the system, the software can work on calculating the best way to pack items and utilize space. You can run simulations, adjust shipping requirements, and make any required changes to the plan before the deliveries start.
Using the load optimization plan as the guide, your logistics team then performs the deliveries according to the instructions provided by the software. At the same time, the system can collect feedback on the outcome of each delivery for future use.
You can adjust your load optimization system based on the feedback collected by the software. Fine-tuning your load planning algorithm and adjusting to changing business requirements can make the most out of the system’s capabilities.
Companies can realize a variety of business benefits by leveraging load optimization for their logistics operations. Some of the primary benefits include:
Maximizing the utilization of available container space allows companies to fit more items into each shipment.
Optimizing shipping loads can reduce costs in multiple ways. For example, companies can reduce the number of trips that vehicles must make to complete deliveries, reducing fuel expenses and vehicle maintenance.
Companies can use software simulation to help discover different improvements in load planning. These simulations can help to determine the best way to plan and arrange goods for each trip, reducing the amount of time spent loading and unloading goods while ensuring on-time delivery.
Businesses that deal with restricted or hazardous goods must often comply with regulations designed to protect consumers and prevent dangerous accidents. Load optimization can take into account the need for vehicle operators with specific certifications, or prioritize the shipment of dangerous goods at specific times, streamlining the compliance process.
Supply chain trends and logistics challenges represent a dynamic, constantly changing landscape that shippers must adapt to. Businesses can stay flexible and respond quickly to change by accurately adjusting the allocation of logistics resources via load optimization.
We invite you to continue growing your knowledge base by exploring our earlier Explainer posts:
Explainer: How do Schedule B numbers, HTS codes, and HS codes work?
Explainer: Why businesses work with Customs compliance consultants
Explainer: Importer Security Filing (ISF) for Canadian importers