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Consolidation in logistics refers to the process of combining multiple shipments into one larger shipment. This practice is significant for several reasons. First, it can lead to cost savings because shipping larger quantities can reduce transportation costs per unit. By consolidating shipments, companies can maximize the use of space in transport vehicles and containers, which improves overall efficiency.

Additionally, this strategy can enhance delivery timelines and reduce the number of trips required to transport items. By grouping shipments together, logistics providers can optimize their routes and schedules, making the entire supply chain process more streamlined.

By contrast, splitting large shipments into smaller ones is not consolidation; it describes a different process known as deconsolidation. Enhancing individual cargo visibility focuses more on tracking and managing the status of individual shipments rather than combining them. Outsourcing delivery services refers to hiring third-party logistics providers and does not pertain to the concept of consolidation itself. Thus, combining multiple shipments into one larger shipment accurately captures the essence of consolidation in logistics.