Co Loader

Co-Loader: The Ultimate FAQ Guide

In this guide, you will find all information you need about co-loader.

So, if you want to learn everything about co-loader read this guide.

So enjoy the read…

Who is a Co-Loader?

Loading ship

Loading ship

A co-loader is a third party who transfers consolidated cargo to another carrier.

Depending on the circumstances, co-loader can either be a consolidator or a freight forwarder. The third party is usually a freight forwarder.

The third-party pays for the process of transferring the consolidated cargo.

What does a Co-Loader do?

The primary function of a co-loader is to consolidate cargo. This is usually LCL cargo which the co-loader consolidates to fill a container.

A co-loader must search for a consolidator or a freight forwarder. Such a consolidator or forwarder should handle the same goods as your co-loader.

This is to enhance the safety of your goods. The last function is to transfer the shipping rights to either the consolidator or freight forwarder.

This facilitates the shipping process to your destination.

What is Consol Goods?

When you purchase goods that cannot fill a container, your forwarder will consolidate them with other shippers. The consolidation process helps in filling a full container before the shipping process begins.

These goods are consol goods and are usually of the same characteristics in packaging and palletization. This helps in their safe shipping to your destination.

What are the benefits of Co-loading in International Shipping?

Co-loading has various benefits to the different parties involved in international shipping. These parties are shippers, recipients of the goods, and the environment.

Using co-loading has the following benefits if you are a shipper

Shipping Cost

A co-loader consolidates all goods before handing them to a forwarder. The effect of this is you pay for the space that your cargo occupies within the container.

This cost is less compared to the cost of hiring a whole container. You, therefore, pay less for shipping your goods.

Safety of Goods

The consolidation process involves goods of the same packaging procedure. This reduces damage to your goods hence ensuring there is a safe shipment of your cargo.

Reduces Shipping Lead Times

Consolidation involves your co-loader packing goods heading in the same direction together.

This facilitates the unloading process at the various destination ports.

This reduces the shipping lead times due to the faster unloading of goods. You can therefore plan for your shipment in advance.

The main benefit you expect as a recipient when using co-loading is it helps in reducing your inventory. This is because you can estimate the duration to expect your goods and the stock you have.

You don’t have to stock up for fear of the late arrival of your shipment.

To the environment, co-loading helps in reducing carbon emissions by reducing the number of shipments. This is by consolidating several goods into one shipment.

What is Co-loading in Shipping?

Co-loading in shipping is the process of consolidating goods from different shippers to fill a container. When the container is full, the co-loader hands it to either a vessel operator or a freight forwarder.

How does Co-loading work?

The co-loading process starts when you contact your co-loader. They are responsible for reserving a space on the shipping container for your goods.

Once you have contacted them and they have your goods, they search for other shippers and consolidates their goods with yours.

This process continues until they fill a particular shipping container.

The next step is handing the container either to a freight forwarder or a shipping vessel. They do this by paying a fee for shipping the container.

The fee varies depending on the size of the container and other factors.

What is the role of Co-Loading Freight Forwarding?

The function of co-loading in freight forwarding is the consolidation of various goods to fill a container. This facilitates the shipping process while reducing the overall cost.

By consolidating the goods, they help in loading a shipping vessel hence reducing the shipping time.

Co-loading also helps in lowering warehousing costs since your co-loader consolidates your goods immediately you contact them.

This reduces the overall cost of shipping which reflects a lower cost of the goods. Through co-loading, the customs clearing process is fastened.

The co-loader presents the goods to the customs authority, and you submit the original documents hence facilitating customs clearance.

Is Co-Loading similar to LCL and LTL?

Yes. Co-loading is similar to LCL and LTL.

These methods intend to fill a container before shipping starts. A co-loader or a freight forwarder can carry out the loading processes under LCL or LTL.

How do I pay Charges owed to the Co-Loader?

The choice of the payment method to use on your co-loader depends on the agreements you have with them.

Standard payment methods that you can use are; letter of credit and cash payment.

What is the difference between Co-Loader and Freight Forwarder?

The main difference between a co-loader and a freight forwarder is the handling of the goods.

A co-loader usually consolidates the goods and hands them over to a freight forwarder.

A freight forwarder can choose to consolidate the goods or hire a co-loader to do that on their behalf.

In essence, a freight forwarder can be a co-loader, while a co-loader is not necessarily a freight forwarder.

How and where does a Co-Loader get Loading and Discharging Rights?

A co-loader gets the loading and discharging rights from a vessel operator or carrier.

They get these rights after paying for slots that are available onboard the particular vessel.

Is Co-Loader in Ocean Shipping and NVOCC the same?

Yes. A co-loader and an NVOCC are the same.

This is because they don’t operate their shipping vessels. They instead hire space in shipping vessels from where they ship their customers’ goods

Most co-loader and NVOCC have their container where they load their customers’ goods before shipping.

However, there is a freight forwarder who acts as a co-loader, and they own their vessels.

Do Co-Loaders Control Vessel Operations at Shipping Ports?

No. co-loaders do not control vessel operations at shipping ports. They only have the right to load and unload from these vessels, which they get after paying.

Does Co-Loader mean carrier?

No. a co-loader is a party whose job is to consolidate cargo to fill a container.

A co-loader can either be a consolidator or a freight forwarder. A carrier is a vessel that carries various containers from the port of origin to the port of destination.

A carrier can either be an aircraft, a ship, or a truck.

Is Co-Loader the same as Slot Charterer, or is there a difference?

No. there is a difference between a slot charterer and a co-loader. A slot charterer usually has their equipment, including the shipping vessel.

A co-loader does not own a shipping vessel, and their function is to consolidate the goods before handing them to either a carrier or a freight forwarder.

Why is the Original Bill of Lading important in Co-Loading?

Figure 2 Bill of lading

Bill of lading

An original bill of lading is vital in co-loading since it indicates the nature of goods, the ownership, and the quantity.

It helps in understanding the proper procedure of handling your goods during the loading and unloading process.

You must present this document to your co-loader before they accept the receipt of your goods. The bill of lading helps in calculating the charges to levy on your goods by your co-loader.

Suppose I don’t have any Original Documents Including Bill of Lading; What should I do?

Shipping documents

 Shipping documents

Failure to have proper documents leads to the customs not releasing your goods once they arrive at the port of destination.

You should therefore contact your shipper for these documents before heading to the customs.

The disadvantage of customs holding your goods is the warehousing fee increases which means you have to pay a higher amount.

Delay can also affect the demand of your gods since your customers can start looking for alternatives.

What does ‘Back-to-back’ mean in Airfreight?

Back-to-back air shipping refers to a freight forwarder booking space on the air carrier for your goods only.

The shipping process under back-to-back involves the use of a single master air waybill.

Back-to-ack shipping reduces damage risk to your cargo while ensuring timely delivery.

However, it is a costly option for shipping your freight.

Which is Better Between ‘Back-to-back’ Transportation and Consol (C-Loading) for Air Shipments?

The choice of which is better between back-to-back shipping and consol shipping depends on your preference. Each of these methods has its benefits and limitations.

Back to ack method involves shipping your goods under one master air waybill.

Air waybill

Air Waybill

This implies you’re your forwarder books space on a carrier to ship goods exclusively belonging to you.

The advantage of this is it reduces damage risk on your goods during the shipping process.

It is also timely, which helps in reducing the lead times for your goods.

However, it is an expensive method to use since you have to pay for the entire space that your forwarder books.

This is so especially when your goods cannot fill the space.

Consol option involves consolidating goods from various shippers before the shipping process starts. Each shipper has their house airwaybill.

It is a cost-effective method of shipping since you only pay for the space that your cargo occupies. The advantage of this method is the destination of all the consolidated goods is the same, which reduces the loss of goods.

However, the chances of damaging your goods are high, meaning you have to counter-check the goods when unloading.

Will I have to pay Import Duty and VAT for Consol Shipments?

Yes. You have to pay import duty and/ VAT for consol shipments.

This is because consol goods are just like any other imported goods which attract a specific levy.

The amount to pay depends on various factors such as the volume of your cargo and the nature of the gods you are importing.

Apart from the Co-Loading Fee and Import Duty, what other charges do I have to pay for Consol Shipments?

Other charges that you should expect for your consol shipments are:

Insurance Fee

You must pay this levy as it covers loss or damage to your goods while in the hands of your co-loader. Given the nature of loading and unloading your cargo y the co-loader, you must pay this charge.

Administration Fee

Your co-loader is responsible for handling your goods before they hand them over to a 3PL or a forwarder.

During this period, they should administer authority over your goods, and you have to pay for them.

The administration fee covers things like the protection of your goods, the loading and unloading processes.

Documentation Fee

There are various documents that you have to sign before handing your goods to your co-loader. These documents indicate that you are allowing your co-loader certain rights over your cargo.

You, therefore, have to pay for these documents before they accept your goods.

Service Fee

Different co-loaders offer varying services for goods. For instance, some offer packaging and labeling of your goods before loading.

For special goods, such as perishables, you have to use special containers.

These services attract a specific charge depending on your co-loader, which you have to pay.

How are Co-Loader Rates determined?

There are various determinants of co-loader rates depending on multiple jurisdictions. Some of these determinants include:

Size of the Cargo

The cost of consolidation depends on your cargo size and the space that it occupies on the container. The higher the volume, the more you are going to pay.

Services

There are different services that your co-loader can offer to your cargo. for instance, packaging and labeling your shipment as per the shipping procedure.

Packaging can be problematic, especially if you don’t know the type of material to use. Using the wrong material can add up the overall shipping cost for your cargo.

You, therefore, need some of these services which your co-loader can offer. However, these services come at an expense which you have to cover.

Demand

Shipping depends on the seasons and demand for your various goods. During the off-peak seasons, most co-loaders offer incentives to lower the shipping cost.

This means you pay less during the off-peak seasons. However, during the peak season, demand is higher, which results in co-loaders increasing their prices.

Documentation Fee

International trade involves several documents which you have to sign to authorize the shipping of your cargo.

For instance, when you hand your co-loader the goods to handle, and you have to sign an authorization document.

These documents come at a fee which you have to pay your co-loader.

Government Regulations

This factor depends on the rules governing a particular geographical location.

There are levies and taxes in certain jurisdictions that you have to pay your co-loader before handling your goods.

What Paperwork is needed to Customs clear my Consol Shipments?

Consol shipment is like any other import, which has to go through the standard customs clearance procedure.

You, therefore, need to have standard custom clearance documents before you receive your goods.

These documents include:

However, you can expect the customs documents to request additional documents if you are shipping restricted goods. This varies depending on your port of destination.

What are the Criteria for Co-Loading Shipments?

The criteria for co-loading shipments facilitate their safe shipping process. Such criteria should consider the following:

Product Compatibility

Co-loading involves packing goods with the exact requirements in one container. This facilitates proper handling of the goods and ensures the goods are in the best condition on arrival.

For instance, you can consider refrigerated goods to be in one container since they have the same conditions.

Palletization is another compatibility aspect that you can consider.

Goods that require palletization can be in the same container for adequate packaging.

Container Packing

Co-loading works best if you can ship all your goods in one container. This reduces the overall shipping cost compared to shipping in different containers.
Before co-loading, you can check on the nature of your goods and f they can fit in one container.

Geographical Destination

You have to align all the goods under co-loading to head in the same geographical route.

This helps in the timely and safe loading and unloading of your goods.

While packing such goods, those whose destination is near the port of origin should be packed last. This facilitates the unloading process.

Scheduling

You should align the arrival of the goods in a particular sequence for effective loading. The loading process should consider the unloading dates for the various products.

Best practice involves those goods whose destination port is last arriving first for loading. This allows for unloading goods whose destination is near the port of origin.

Should I take the DIY Approach for Co-Loading or hire a 3PL?

The choice of which approach to use depends on your preference.

However, both DIY and hiring a 3PL have their benefits and limitations.

A DIY approach is best suited for larger organizations that understand the shipping process. Such organization can leverage their data and networks to find a suitable partner for co-loading.

DIY yourself approach can be time-consuming and expensive if you are a small organization. If your organization cannot match the resources required for a DIY approach, you can use a 3PL.

Involving a 3PL is cost-effective and time-saving. This is because your only responsibility is to find a potential 3PL and leave the rest for them.

Most 3PL have existing networks and shippers who want to use their services. This makes it easier for them to operate the co-loading process on your behalf.

The only problem with this is you have to select a 3PL who can effectively handle your shipping.

Do I need to change my Processes and Systems to get started Co-loading?

Different factors determine the choice of whether to change your processes before co-loading. For instance, the type of co-loading and the destination.

Active co-loading requires you to change your processes, while passive co-loading does not need you to do so.

However, it would help if you inquired from your co-loader in advance to avoid issues during the shipping process.

What are the Drawbacks of Co-Loading?

Figure 5 Co-loading model

 Co-loading model – Photo courtesy

The main drawbacks of co-loading are:

Nature of Goods

Co-loading is not ideal for all goods, which limits its use. for co-loading to be effective, you have to check on the nature, size, and dimensions of the goods.

Goods that are not of the exact dimensions, nature, or size are not suitable for co-loading, limiting their use.

Complicated Scheduling

As a co-loader, you have to make prior arrangements for the goods before shipping. This involves making several contacts for goods to fit your container.

You also have to check on the availability of these goods.

If possible, you have to reschedule the timing for all the goods to coincide with the shipping date.

This can be tiresome and requires patience, especially if the goods have varying arrival dates.

Delayed Shipping

Delayed shipping is a result of rescheduling the co-loading process. This can imply the arrival schedule of your goods.

Such an arrival delay can affect the demand for your goods.

What Type of Shipments is suitable for Co-Loading?

Co-loading is effective if the goods are of the same handling procedure. This is in terms of packaging and loading.

Such a procedure helps in minimizing damage to the goods and effective utilization of space on the container.

You can consider co-loading for goods which are of the same size.

These goods are easy to maximize loading on a container. This reduces the overall shipping cost while offering safety.

You can also consider co-loading goods from the same industry.

This is because these goods have the same handling process, and you can also maximize the space on your container.

Other types of goods that you can co-load are goods that are heading in the same geographical route.

When packaging these goods, you start with those whose destination point is further away from the port of origin.

This helps in the safe loading and unloading of goods, which is vital in enhancing the safety of your goods.

What are the Different Variations of Co-Loading?

The different variations of co-loading are:

Passive Co-loading

This type depends on the coinciding of different shipping factors like time, direction, and shipment size.

If the various cargoes coincide with these factors, then your co-loader loads them in the same container.

The main limitation of this type of co-loading is the availability of goods that align with the shipping factors of your goods.

This can lead to a delay in the shipping of your products,

Active Co-loading

This type involves your co-loader understanding and planning in advance for co-loading.

This is because there is a specification for the shipment of particular goods on a specific date.

Active co-loading is cost-effective and predictable.

This is because you are sure of the shipment of your goods hence reducing the warehousing cost.

How does Co-Loading Impact my Supply Chain?

Co-loading has different impacts on your supply chain, including:

Reduce Inventory Cost

Co-loading offers a quicker shipping option for your goods. This is because your co-loader consolidates the goods before handing them for shipment.

Faster shipping reduces the lead time hence which reduces the warehousing costs.

Reduces Overall Price

Co-loading helps in reducing the shipping cost. This is by paying for the space occupied by your cargo in a container.

Reduction in the shipping cost translates to reduced prices of your imported goods

Is Co-Loading with more than two Freight Forwarders suggestible?

Co-loading with more than two freight forwarders is not an ideal option. You have to pay for the related charges, which can be expensive.

You can get incentives if you choose a single freight forwarder. The best option is to shop around for an ideal freight forwarder before engaging them.

How do I find a suitable Co-Loader for my Supply Chain?

You should consider the following factors when finding a suitable co-loader for your supply chain:

Co-loader Rates

Different co-loaders offer varying co-loader rates, which you must factor in before you engage an ideal one.

You can request different quotations before deciding on which co-loader to select.

When selecting a co-loader with the best price, you should also check on the quality of their services. This is because safe handling of your goods is critical.

Services

The services of different co-loaders differ depending on the needs of the market.

For instance, there are co-loader who will accept your goods after you have packed them while others offer to do this for you.

An ideal co-loader should offer you all the services you want for the safe shipment of your cargo.

Such services include finding space on the container, proper packaging of your goods, and finding the best forwarder.

Certified

You need to check on the certification aspect of your co-loader before engaging in business with them. This is to eliminate chances of working with a rogue or fake co-loader.

Certification also helps in knowing where to start in case there is a dispute to resolve.

Network

Networking is critical in international shipping, especially for a co-loader.

They should be in a position to have a good network of freight forwarders who can assist in shipping your goods to your destination.

Such a network also helps in finding the best price for your shipment.

At BanSar, we will help you with all your freight forwarding needs from China.

Just tell us what you want and we will find a perfect solution for you – contact us now.

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