Shipment Consolidation ROI Calculator — Fewer, Larger Shipments

Calculate savings from consolidating frequent small shipments into larger batches. Freight rate savings vs inventory holding cost — find the optimal shipment frequency.

Quick answer: Shipping weekly instead of daily reduces freight cost 30–50% (larger LTL shipment = lower class, better rate) but increases average inventory by ~3.5 days. On $200K/year freight, weekly consolidation saves $60K–$100K vs $15K extra carrying cost.

📦 Shipment Consolidation ROI Calculator

Current Shipment Frequency

Proposed Frequency

Current Annual Freight Cost ($)

Expected Freight Rate Reduction (%)

Larger shipments = better rate/unit. Typically 25–50%

Average Inventory Value ($)

Annual Carrying Rate (%)

Annual Net Saving

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Freight Saving

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Extra Holding Cost

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How to Use This Calculator

Select current and proposed frequency — daily → weekly is the most common consolidation opportunity.
Estimate freight rate reduction — larger consolidated shipments get better LTL rates or move to FTL. 35% is conservative.
Enter inventory value — less frequent replenishment increases average inventory — this holding cost offsets freight savings.

Worked Example

Daily → weekly, $200K freight, 35% rate reduction, $800K inventory, 25% carrying rate.

Freight saving: $70,000
Extra cycle days: (7−1)/2 = 3 extra days
Extra carrying: 3 × $800K × 25% ÷ 365 = $1,644/yr
Net saving: $68,356

Freight savings almost always dominate inventory carrying cost in consolidation decisions. The holding cost concern is real but small compared to the freight rate improvement. Consolidation wins strongly here.

Frequently Asked Questions

Customer service expectations ("I need it daily"). Order management systems not built for batching. Supplier lead time uncertainty making batching risky. And internal politics — sales promises daily delivery, logistics pays the freight bill. Solve with data: show customers weekly delivery at lower cost is possible and preferred.

Negotiate LTL rates based on consolidated shipment size (larger = lower class, better rates). At high enough volume, consolidation enables FTL instead of LTL. Use a freight consolidation service or pool distribution for regional delivery points.