In this guide, you will find all information you’re looking for about cartage.
So if you want to learn more about this freight term, this is the right guide for you.
- What does Cartage mean?
- What is the Difference Between Freight and Cartage?
- Is Cartage the same as Drayage?
- What are Freight and Cartage Expenses?
- Is Cartage a Direct Expense in International Shipping?
- What is the Meaning of Paid Cartage?
- What is the Cartage Fee in Logistics?
- How is Cartage Cost Calculated?
- Who pays Cartage Fees?
- Can you Encounter Multiple Cartage Fees in a Single Shipment?
- What is the Difference Between Cartage and Wharfage Fees?
- What is Cartage Advice?
- Can Cartage Fee Documentations be Considered as Contract of Carriage?
- What does a Cartage Agent do?
- How do you choose a Cartage Agent?
- Do Freight Forwarders offer Cartage Services?
- What is Cartage Outward?
- What is the Difference Between Cartage Outward vs. Cartage Inward?
- What is the Difference Between LTL and FTL Freight in Cartage?
- Are Cartage Fees included in the Overall Shipping Fees?
- Do you use Incoterms during Cartage?
- Does Freight Weight Matter when Calculating Cartage Fees?
- What is a Cartage Vehicle?
- How do Cartage Companies Work?
- How does Cartage Affect Shipping?
What does Cartage mean?
Cartage is the process of transporting goods (either by road or train) to a container freight station (CFS).
For goods to be shipped, they must be transported from the supplier to a CFS.
Container Freight Station
The cost incurred in transporting the product from the supplier to the holding dock is referred to as Cartage.
What is the Difference Between Freight and Cartage?
Freight refers to goods being transported, usually for commercial purposes.
Cartage is the process of transporting goods over short distances by either road or rail.
Is Cartage the same as Drayage?
In shipping, the terms Cartage and drayage are often used interchangeably, and sometimes a shipper may be confused about their meaning.
Drayage refers to the transportation of a container’s entire content over a short distance, usually within a metropolitan area.
Mostly, drayage involves picking up freight and delivering it to the shipping port or vice versa.
On the other hand, Cartage is transporting freight by rail or road from a supplier to a container freight station.
Cartage involves shipping all kinds of cargo in bulk – from food products, clothing, chemicals, etc.
It also consists of the removal of waste.
In this, goods are loaded into large trucks or carriages and hauled from one point to another.
What are Freight and Cartage Expenses?
Freight and Cartage expenses are generally the cost of shipping goods from the supplier to a customer’s final destination.
The expenses, in this case, are freight and Cartage expenses.
They include both local transportation at origin (Cartage) and international shipping expenses (freight).
Is Cartage a Direct Expense in International Shipping?
Understanding the kind of expenses you incur for international shipping can significantly help determine your profits.
Because Cartage expenses are directly attributed to the goods being shipped, they are therefore direct expenses.
Suppose you are importing, and you incur inward Cartage expenses.
You will record them on the expense side of the trading accounts.
However, if they are outward, then the recording will be as expenses on the profit and loss statement, which means that they are a direct shipping expense.
What is the Meaning of Paid Cartage?
When importing a product, you only budget with the product once it has reached your warehouse.
Paid Cartage refers to the Cartage passed to the customer.
When you purchase a product and deliver it to customers, Cartage cost is included in the product’s price.
And when the customer pays for the product, Cartage becomes an income rather than an expense.
What is the Cartage Fee in Logistics?
Depending on the incoterm and shipping term you use, you may encounter Cartage fee when moving your products once in a while.
Cartage fee in logistics is a sum charged by transporters for the service of delivering your products through rail or road.
In this case, the emphasis is on short inland distances.
How is Cartage Cost Calculated?
After understanding what the Cartage fee is, the next thing is to know how transporters arrive at it, lest they charge you heavily.
There are several factors in play when calculating the Cartage fee.
Your transport company can decide to combine several factors in determining the Cartage costs or use a single factor.
Nevertheless, some of the factors include;
· Mode of Transportation
Depending on the transporter, transportation by road can attract a higher Cartage cost than using a train.
When it comes to logistics, distance is of the essence.
The Cartage costs increase with an increase in the delivery distance.
· Weight and Size
Weight and size also dictate the Cartage costs.
Heavy and bulky packages tend to attract higher Cartage fees than small and lighter loads.
· Type of Product
Type of products can be in terms of perishability, shape, value, or Hazmat products.
There is no fixed Cartage cost, and the amount due will depend on your transporters rate and the factors above.
HAZMAT and perishable goods often require special handling and transportation equipment.
Due to this, the cost of hauling them is usually higher than other products.
Who pays Cartage Fees?
Just like freight charges, incoterms tend to dictate Cartage fees and payments.
For instance, if you are shipping under CIF incoterm, your supplier pays all the transportation costs until you receive the goods.
Nevertheless, after receiving the goods and you want to deliver them at your doorstep, say from the port, you will be liable for the Cartage fees.
Can you Encounter Multiple Cartage Fees in a Single Shipment?
The shipping process forms a long chain with numerous participants, including consignees, shipping agents, port operators, suppliers, inspectors, etc.
Therefore, instances of multiple Cartage fees exist depending on how many hands your package goes through.
For example, at the port (mostly busy ports), there are several processes that your goods must undergo, either before shipping or after.
During the movement of your goods from one place to the other within the port, you will incur Cartage fees.
If your products undergo an export inspection, you will also incur an additional charge.
What is the Difference Between Cartage and Wharfage Fees?
There is a distinction between Cartage and wharfage fees, and not necessarily must you pay both.
If you are shipping and you have chartered your vessel, you must encounter wharfage fees.
You are charged wharfage fees for using the port’s harbor in loading or unloading your consignment.
Conversely, Cartage fees are typical for moving products within the port and are charged by port operators.
What is Cartage Advice?
Sample Cartage Advice
Usually, before having a transporter delivering your products from one point to another, there is a legal agreement.
This legal agreement is referred to as Cartage advice.
Cartage advice, therefore, is a legal document showing details of the product being transported.
It also serves as an acceptance letter at the destination affirming the receipt of goods.
Can Cartage Fee Documentations be Considered as Contract of Carriage?
Contracts of carriage contain information about the parties involved in this case;
- The consignee
- Logistics provider
The contract of carriage should also specify the nature of the product being transported.
Additionally, it should show the fulfilment of transportation as per the agreement.
When Cartage advice spells out all of the above aspects, it is considered a carriage contract.
What does a Cartage Agent do?
A Cartage agent picks up goods from point A and facilitates its haulage to point B.
They offer transport services.
And those who don’t, contract-specific Cartage companies to transport client’s products as advised.
In this case, during Cartage, the responsibility of goods always lies in the Cartage agent’s hands.
Also, note that these agents use their paperwork while transporting the goods.
How do you choose a Cartage Agent?
Every shipper desires convenience in the delivery of a product up to the selected delivery point.
However, specific reasons hinder shippers from fulfilling these desires.
Cartage agents come in handy to ensure no destination is unreachable.
Despite serving your business needs, it is essential working with a reliable Cartage agent.
This is because not all of them are worth serving your business.
To find a reliable Cartage agent, consider the following factor:
Location is an essential factor when choosing a Cartage agent as it determines how fast your shipment gets from point A to point B.
Agents who are much closer to major transportation hubs such as seaports and airports are considerably better suited.
Such agents are not limited by time or distance and thus can pick up and deliver your cargo without scruples.
When considering the location, always ask the agents about their location concerning the pickup point.
This way, you can rest easy knowing that your package will be transported on time.
Not only does experience come in handy in navigating local routes, but it also saves you money.
A good Cartage agent should have positive reviews from their previous clients and mastery of the local laws.
Other than the experience of the company, the drivers too must be experienced.
Getting your goods from or to local areas can be challenging because of roads and hostility.
To be safe, the drivers must have adequate driving knowledge in any weather or terrain.
· Reliable Customer Service
Reliability is vital when choosing a Cartage partner and you can judge this from their customer service.
Quality customer service involves prompt communication, responses to concerns, dispute resolution, and adhering to the terms of the agreement.
Putting your products under the care of a Cartage agent requires more than trust.
It would help if you felt safe and relaxed because you are sure the Cartage agent will deliver.
A good agent should have an elaborate communication and tracking system.
You can check reviews, testimonials, and affirmations from those who have worked with the Cartage agent in the past.
· Warehousing Options
This is particularly important when importing products.
Other than offering transportation services, the Cartage agent should care for the goods while under their custody.
It will help to seek clarification from the Cartage agent if they have their warehouse.
This will save you a great deal in storage costs.
Do Freight Forwarders offer Cartage Services?
Freight forwarders’ role in international shipping is significant.
It goes beyond booking a vessel and presenting customs clearance documents.
Forwarding agents handle Cartage services, though only under special contracts.
They either use their means of transportation or hire from others.
To help save on costs and having many people handling your products, you can settle on a freight forwarding expert who arranges or offers Cartage services.
What is Cartage Outward?
Cartage outwards is the cost/expense of transporting products from your warehouse to the customer.
It is recorded on the profit and loss account when importing products.
What is the Difference Between Cartage Outward vs. Cartage Inward?
Both Cartage inward and Cartage outward refers to the costs of transporting products over shorter distances, usually within the same metropolitan areas.
Nonetheless, the two differ when it comes to making an entry in the books of accounts.
For Cartage outward, you make the entry in the profit and loss account.
While for the Cartage inward, you record the entry in the trading account.
What is the Difference Between LTL and FTL Freight in Cartage?
The choice between Less Than Truckload (LTL) and Full Truckload (FTL) can be confusing, especially when booking Cartage services.
The choice between LTL and FTL depends on the quantity of your cargo, price, and delivery time you desire.
FTL vs. LTL
· Less than Truckload
The LTL freight option offers an opportunity for low budget shippers with truckload weighing between 100 and 10 000 pounds.
Under this method, you only need to pay Cartage costs that equal the space your products occupy.
For example, if your shipment occupies only a quarter of the whole truck, your Cartage fee will be a quarter of the truck’s total Cartage fee.
Though economical and practical, under the LTL method, the delivery time is longer.
The truck will not depart if it’s not full, meaning that you have no control of the delivery time.
· Full Truckload
When shipping, the delivery time has more weight in ensuring you meet your customers’ demand.
The FTL means that you will hire the whole truck space for your transportation.
Regardless of whether your products occupy the whole truck space, you can still hire the truck.
In this case, your products stay undisturbed until they reach the delivery point.
Though the Cartage fee is high under the FTL method, your products are safe, and the delivery time is shorter.
Before settling on either LTL or FTL, consider your budget, shipment volume, and how fast you want your goods.
Otherwise, where Cartage cost is not an issue, FTL is your best choice.
Are Cartage Fees included in the Overall Shipping Fees?
When computing the overall shipping fees, you must include all the expenses used to deliver the product to the desired delivery point.
Cartage fees are significant, and when realized, it is impossible to ignore them as shipping fees.
Do you use Incoterms during Cartage?
Incoterms are important in shipping because they define both the buyer and the shipper’s obligations in settling shipping costs.
Because incoterms spell who is responsible for costs of delivering products, they apply for Cartage costs.
Depending on the incoterm in play, either the supplier or the buyer (importer) pays for the Cartage costs.
For example, under DDP incoterms, the seller is responsible for all transportation costs until they reach the buyer.
This means that the seller will handle Cartage costs of delivering the goods at the port and the final delivery point.
Conversely, under EXW incoterms, the seller only avails the goods at the pickup location.
After that, the buyer handles all other costs, including Cartage costs.
Does Freight Weight Matter when Calculating Cartage Fees?
Yes, it does. Some products are too heavy for ordinary trucks to transport.
Therefore, the Cartage fee will increase with an increase in weight.
However, other factors also come in handy, like the size and shape of the product.
Your product’s freight weight can be higher, but the space it occupies is smaller.
Depending on your transporter, you can incur the same Cartage fee as another product with a lighter freight weight with the same size.
What is a Cartage Vehicle?
You have already known that Cartage is the process of moving products over short distances.
To do this, Cartage companies use special trucks or trains known as Cartage vehicles.
How do Cartage Companies Work?
Cartage falls under the service industry, and the whole operation can involve a single Cartage vehicle with one owner or many Cartage trucks owned by one company.
The Cartage companies’ purpose is to deliver products from one point to another (usually short distances).
Cartage companies require specific qualifications to operate.
· Licenses and Permit
By law, all companies have to pay taxes so do Cartage companies.
The drivers must have a Commercial driver’s license and permits.
For drivers hauling sensitive products such as corrosives, they must undergo special training.
· Office Operations
Because Cartage companies operate in the service industries, planning and scheduling are needed.
As an importer, you have to place your request, receive feedback, and make your delivery payments.
· Collection of Necessary Details
Drivers operate under special routines and specifications pegged on provided details.
You should give the needed details to reduce any mistakes.
A Cartage company can choose to specialize only in transporting specific products.
In such a case, the Cartage Company must have the right set of employees.
If, for example, it deals in Cartage of security products, it can hire armed guards to secure the product during transit.
How does Cartage Affect Shipping?
Cartage is responsible for the delivery of products at several stages of the shipping process.
It could be to a CFS for customs inspection, a shipping terminal, or the customer’s address.
Generally, timely Cartage ensures timely shipping, while Cartage delays can also lead to shipping time delays.
When it comes to the overall shipping costs, an increase in the Cartage fees increases the shipping fee.
As you can see, Cartage has a lot of impacts on your business.
It requires more than just a Cartage company.
At Bansar, we can help with your Cartage needs to give you a seamless delivery of goods – contact us now.