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    1. Littleflower's Avatar
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      #1

      Buying container loads- What, Where and why

      Iíve been hearing about container loads. Iíd like to see if this is something that would profit my company and if I can access them. What exactly are they and where can I get a container load? Why would a business use them?
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      #2
      Anyone anywhere can potentially use a container load. It’s conceivable that almost any product bought in bulk could be shipped via container.

      A full container load is referred to as “FCL” and usually consists of a container that is 20 by 40 feet in length. You can also get a 40 by 40 foot container if you just need that bit of extra stock. The advantage here is the lower freight rates that a container affords. A container allows you to buy in massive bulk quantities, say, thousands of t-shirts, and ship them in a much more cost-effective manner than individually boxed shipments. It’s usually assumed that a container load must be full before shipment(and that’s the best way to get your money’s worth), but it is now common to also ship less than the container load (LCL).

      Containers are shipped by air, sea, road, and/or train, depending on the port of shipping and the port of destination.

      In addition, almost anything can be shipped via container load, as there are multiple types of containers:

      • Ventilated
      • Insulated
      • Open sides (aka “Flat Rack”)
      • Refrigerated (aka “Reefer”)
      • Open top

      Container loads are cheap because they can hold the most quantity of goods out of any other packing and shipping method. FCL is more cost effective than LCL when you factor in the price per unit with shipping.
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      #3
      I’ve used a shipping agent for most of my container loads. Often, I can order less than a container and still get the shipping cost for a FCL because the agent will take the orders of several clients and combine them into one container, instead of shipping it LCL.

      The agent also works to make sure that packaging will hold up in transit. Packaging is a vital consideration because there is so much going into the container, and you want it to fit as space efficiently as possible. You want to get the most goods in for shipping, and that means pretty much cramming the goods into every nook and cranny. To avoid damage during transport, there has to be enough packing to protect the merchandise as well.

      A shipping agent can also handle clearing customs, unloading and storage. For me, it’s an easier process to pay a shipping agent than to do all of this on my own or assume the supplier’s shipping agent has my best interest at heart.

    4. Randy is offline

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      #4
      I’m kind of leery of sharing container loads. Sharing means there isn’t any one entity that is responsible for packing the goods. If you don’t have a good agent involved in the details, the goods can be damaged in transport.

      Another thing to consider before sharing a container is the fact that the entire contents of a container have to clear through customs. So if one company is shipping fake goods, customs holds up the entire container and nothing clears, which means you’ve just wasted massive amounts of time and will invariably suffer a loss, all because you shared a container.

      I wouldn’t share a container, but I am able to combine orders from several suppliers within the same region or country. In that way, the agent combines my orders into a container at the shipping port, and instead of paying for two LCLs, I just have to pay for one.

      If you decide to use an agent, I recommend carefully screening the agencies you’re thinking of using so that you get an agent that fits your needs. If you know where you’ll generally be shipping from and to, make sure the agent is familiar with and has access to those ports. The agent should be knowledgeable about clearing customs and the different guidelines for each country and port.

      One final thing is to consider if the agent(s) that your suppliers use are affiliated with the shipping agent you are going to use. If they aren’t affiliated, you could potentially find yourself in a battle of agents, with each one blaming the other for any problems or arguing about shipping methods. Believe me, you don’t want to go there. Affiliated agents give you more control over the shipping process.

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      #5
      In the excitement over your earth-shattering deal on the container load and the money you’re saving on shipping, it’s easy to forget the impact on your business when ordering a container load. There are costs and storage issues to consider.

      1. Cost

      You know you’re going to make more money per unit, but to order a container your business generally needs to have a lot of buying power. You have to put up a lot of money initially to order the product and pay import, tax and shipping fees where applicable.

      Ordering a container ties up money from the time you order, especially if you order from a factory that only begins to make your order once you place it. This could take up to 4 weeks, and shipping will take another 4 weeks. Factor in clearing customs, delivery and unpacking the product and you can add another week. By the time you receive the goods onsite, you probably need to order another shipment to remain stocked. This requires a substantial cash flow from your end.

      If you’re able to cover the amount of money needed to purchase containers of stock, the money you save on shipping is amazing. If you sit down and figure out a system of ordering and have the cash flow, you can save a lot of money. Compared with shipping via air, the savings for FCL is around 150%.

      2. Storage

      Container loads also create an impact on your storage facilities and capabilities. If you have to stock heavy for a competitive market in which you must fulfill orders immediately, then you need a place to store the goods. There are two options here.

      • Get your own warehouse. Unless you’re dealing with a consistently high volume of goods, this can be costly. You have to hire staff, pay for utilities and rent, insurance, and other unforeseen costs.

      • Use third-party storage. This is a warehouse that basically rents out space, an ideal situation for companies with fluctuating stock, or for companies that don’t have that much volume yet. Using third party, you only pay for the space you need each month. Some companies will also pull orders and pack them as needed.

      Additional fees are generally charged for picking up orders from the port of delivery; per pallet or container; and for any items that are shipped out.

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      #6
      You should also know that when you receive the container load, it’s best to have a quick turnaround for unloading. Depending on the carrier, you generally have about a day or two to unload. After that, you’re charged a “demurrage” fee, which basically means you’re renting it to hold your goods for however long you have it. The demurrage is a slight nudge for quick turnaround times. They want their container back, after all.

      If you don’t have the resources or time to address unloading when the container arrives, third-party storage or another carrier can unload it at the port or quickly deliver it to your premises and unload it.

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