Floor Loading VS. Shipping On Pallets. Which Makes More Sense?
A floor loaded container is a shipping container stacked with freight that has been loaded from the floor up without utilizing shipping pallets. In other words, a floor loaded container is a shipping container wherein all of the freight has been stacked onto the floor, instead of on to a wooden pallet. Containers may be loaded this way when they are filled with stock lots from overseas, or when it is more economical to floor load without pallets to get more closeout inventory in the shipping container. Closeouts have become more expensive so it may be better for excess inventory buyers to floor load in an effort to save money on shipping. Companies that buy overstock and product liquidation deals are forced to save money where they can.
Just about every article of freight larger than an Amazon package is loaded utilizing a shipping pallet. Shipping pallets of closeouts enable loading and unloading crews to utilize forklifts and pallet jacks to easily move, load, and organize any product liquidation easily. Excess inventory buyers prefer liquidations be loaded on pallets rather than floor loading because it is much easier and faster to load and unload. However, shipping pallets are heavy. They add weight and volume to the freight which in turn costs more money to ship. Companies that buy overstock have to weigh all these pros and cons when shipping.
Most shippers are restricted to either floor loading or pallet loading due to the specific shipping restrictions placed on their freight. A company that ships freight that consists of glass components would not be advised to floor load their shipping containers due to the likelihood of it breaking. However, if you are buying or selling closeouts of pillows and dog beds, these may be floor loaded because they are lightweight and bulky. Sometimes companies sell unwanted inventory for this very reason; high cube products with little value may be dead stock that sits in the warehouse taking up valuable space that could otherwise be used for new products coming in.
A more durable freight class such as used tires requires no such precaution and can be floor loaded from floor to ceiling in nearly any shipping container. Excess inventory buyers are familiar with all the different categories they are buying and they know what can be floor loaded vs. palletized. If a 3PL warehouse is shutting down they may not want to take the time and effort to floor load containers since everything is already probably loaded on pallets. When a company liquidates merchandise they are already losing money and may not want to spend even more money floor loading containers.
Floor loading is less common, and more difficult than other loading methods. Freight that is floor loaded must be carefully sorted and loaded on to the container by hand. Closeouts already being sold at a loss may not be worth floor loading unless the buyer is willing to pay for the additional cost. Shippers are advised to consult the National Freight Motor Classification to confirm their shipments freight class and to determine whether floor loading is an option for their product liquidation and overstock inventory.
Otherwise, a shipper runs the risk of securing a carrier that is not adequately equipped to carry a floor loaded shipment. In fact, most shippers, and many carriers refuse to ship, carry or load floor loaded freight due to the added layer of liability that comes with a shipment that consists of multiple floor loaded items and components. Liquidation companies may have to purchase additional insurance to be sure their inventory of liquidation stock is properly covered. Damaged inventory is difficult to do anything with, and these may not even be considered closeouts or abandoned freight, as much as distressed inventory.
Most of the freight that is shipped today is palletized because palletizing adds a layer of protection and accountability to the freight. Freight that includes multiple small closeouts can be secured to one pallet and shipped as one shipment, instead of numerous items that must be sorted and accounted for by hand. However, there are a number of different types of freight that are typically floor loaded due to their manufacture, perceived durability, and individual shipping requirements. Surplus inventory of housewares, sporting goods, toys and electronics will almost always be on pallets. Overstock buys of pillows, dog beds, furniture and other large cube items may be loaded on the floor to save money. Because the individual freight items of a floor loaded shipment are not bound together on a pallet, they are more susceptible to load shifts and potential damage.
Floor loaded shipments require load bars and straps to be strategically placed throughout the load to prevent it from shifting. Floor loaded shipments may also require added heat, cold and weather insulation due to the lack of protection. Deals made on closeout websites are almost always shipped on pallets, but surplus buyers should always ask the seller how the closeouts will be shipped prior to confirming.
Most importantly a floor loaded shipment has to be properly distributed throughout the container to prevent a load shift and excessive fees associated with an overweight container. Companies like Amazon, who frequently utilize floor loaded containers filled with closeouts and excess liquidation inventory also utilize “Vehicle Sizing Software” which enables their Shipment Coordinators to “build” evenly distributed, profitable floor loaded shipments that utilize every available inch of the container, and rake in the most possible revenue per floor loaded shipment. Smaller companies that don’t have all these tools can be put out of business due to the increase in shipping costs. It is not uncommon for importers to shut down their 3PL warehouse and liquidate entire inventories due to increased costs.
Some shippers have a choice when it comes to floor loading freight; they can choose to save money and sacrifice efficiency by floor loading, or they can increase efficiency by pallet loading their freight, at a higher shipping cost. But small companies will likely always go for the cheapest method of shipping. This can create a problem when liquidating inventory that is time sensitive or seasonal. If goods arrive late, they may lose all or some of their value and will have to be liquidated because they missed their sales date.
How a shipper decides to load their freight will ultimately be determined by the type of freight they ship, their shipping budget and how efficiently they can load and unload a floor loaded container filled with excess inventory and closeouts of toys, housewares, home accessories, and lawn and garden products.
The choices that shippers have for shipping their freight is full truckload (FTL) and less than truckload (LTL). In most cases, the customer is not given the choice of whether to use palletized systems of floor-loaded ones. Nevertheless, the difference between these two approaches has significant implications. Therefore, it makes sense for shippers to understand how both LTL and FTL can effect your Ecommerce closeout fulfillment process and the associated costs. This article explains some of the key aspects of FTL and LTL. It also allows customers to make informed choices about floor-loaded and palletized shipments of overstock inventory, discontinued products and other liquidation stock.
Something to remember is that floor-loaded items reduce freight costs. The reason for this is the fact that the entire container is used to load products, rather than also having to pay for pallets. You are likely to require fewer containers to ship your product. This allows you to sell closeouts cheaper than your competition that may choose to take excess inventory on pallets.
The downside is that this type of loading is not suitable for all products. For example, it is too risky for more delicate or fragile products. The chances of damage are increased in these cases. Instead, this system is used for heavy and bulky products such as tires, carpets, and pipes. Bear in mind the additional labor costs that are involved in packing and unloading a freight shipment off the floor. There is also a time consideration because this is an involved process. Closeout businesses must do a cost-benefit analysis in terms of time and labor cost before taking this option. All the shipments must be loaded and unloaded by hand in this case. Liquidators for inventory of this nature may choose pallets due to the overall cost savings in labor and time. Excess inventory buyers that buy closeout furniture are more likely to floor load than closeout buyers accustomed to taking overstock liquidations of toys, housewares and home accents.
Most shippers tend to use pallets when sending cargo across the world, including the USA. Through palletization, it is possible to turn many smaller boxes into a single large unit. This unit is stronger than each individual box. That is why some consider this to be a more secure way of handling cargo. Overstock toys are normally sent on pallets because they go to smaller specialty shops who cannot buy full containers. These smaller retailers count on closeouts and special overstock inventory for discounts.
Another advantage of pallets is that they elevate the cargo from the floor of the container during transit. This is a protective measure in case there is a water spillage into the container. Moreover, the fact that the pallets are standardized means that they can easily fit into containers since they have extremely specific dimensions. Also, if you are shipping a large closeout warehouse that distributes to many smaller stores, it would be better to already have everything on pallets for cross-docking.
The calculations of how many pallets are required are pre-set and there is no need to develop a complex algorithm for this purpose. Besides, the pallets are easy to move from place to place as you are loading or docking. Moreover, palletization can work for both LTL and FTL freight. It is important to note that there are restrictions that are put in place by UPS and FedEx for those selling closeouts in the USA. These couriers will not pick up any closeout pallets unless the shipment has used its in-house freight service. Moreover, FedEx Freight has made palletization mandatory for its transit services. However, UPS is still able to accept unpalletized boxes if you are using its in-house freight service.
Merchandise USA is an overstock liquidation buyer that can help you liquidate your business inventory and close your 3PL warehouse. We specialize in selling obsolete inventory at liquidation auctions. We have been closeout wholesalers and closeout distributors since 1984. Make us your surplus inventory buyer when looking for a liquidation partner.
