Containers are essential units used for transporting goods across various modes of transportation, such as ships, trains, and trucks. When shipping goods from China, choosing between shipper-owned containers (SOC) or leveraging carrier-owned containers (COC) can pose a challenge.
This article covers the fundamentals of SOC and COC containers, highlighting their disparities. By understanding these distinctions, you can make a well-informed decision regarding whether investing in owned freight containers aligns with the needs of your business.
What is a shipper-owned container?
A Shipper-owned Container (SOC) is a metal shipping container exclusively owned by an individual or business. Typically, the shipper has complete ownership of it and arranges transport for cargo containers by purchasing slots on the carrier’s vessels.
In most cases, large importers dealing with significant and regular cargo volumes, such as IKEA, Walmart, and others shipping from China, often possess SOC containers.
Furthermore, SOC offers a tailored approach, enabling shippers to utilize them as needed, aligning with their specific shipment schedules and cargo requirements.
What are the benefits of SOC containers?
- A SOC container holds the potential to reduce freight costs for shippers or businesses with stable shipping needs by eliminating container rental fees.
- Furthermore, SOC containers aid in avoiding unforeseen demurrage (DEM) and detention (DET) costs resulting from delays in customs clearance, port congestion, etc.
- Using a SOC becomes pivotal in regions where carriers are unable or unwilling to provide containers or offer them at exorbitant rates. Shippers can independently source cargo in those remote areas with it
- SOCs enable shippers to reduce reliance on external container providers, enhancing operational autonomy throughout cargo transportation.
What is a COC container?
A COC, also known as a Carrier-owned Container, refers to a shipping container held and managed by the container liner or carrier. In contrast to SOC, COC containers belong to the carrier’s container fleet.
When employing a COC, shippers pay the carrier an all-inclusive rate for transporting cargo from point A to point B, with the carrier handling intermediary processes, including container provision.
Upon delivery completion, COC containers should be returned to the carrier, who then leases them to another shipper.
It’s important to note that additional charges, such as demurrage and detention fees, may apply when utilizing a COC shipping container, depending on the circumstances.
What are the pros of using COC containers?
Carrier-owned containers are commonly used for standard shipments along high-traffic routes, providing flexibility to shippers in FCL and LCL shipments.
It can be more cost-effective and simple if the shipper negotiates a fair deal with the carrier for end-to-end container shipping with COC. Because shippers only need to make a freight payment to the carrier for the international transportation of their goods.
On the other hand, there is little incentive to use your container if the carrier has an ample supply of container boxes available.
Moreover, shippers return COC containers to the carrier upon cargo delivery, eliminating the need to manage empty containers. It relieves the shipper from container maintenance, repair, and regulatory compliance responsibilities.
What is the difference between SOC vs COC containers?
Firstly, in terms of ownership:
SOC containers are owned outright by the shipper or cargo owner, whereas COC containers belong to the carrier or shipping line.
Secondly, regarding operations:
When shipping with SOC containers, you should locate a suitable container and submit its certificate information to the shipping company in advance for shipment application. Once the container arrives at the destination port, follow the container leasing company’s instructions to return it to their specified yard.
Conversely, with COC containers, you only need to go to the designated yard to pick up or return the container based on the carrier manifest or return list. In addition, the container and cargo space are integrated, requiring no extra application or operational steps.
Thirdly, concerning cost implications:
Generally speaking, paying for cargo space in SOC containers is more economical than using COC containers. However, the extent of cost savings depends on the required space by the customer, the carrier container availability, and the expenses related to container return.
Is it worth buying your own container?
Owning a SOC container can be advantageous for businesses that frequently ship goods, particularly on specific routes or with consistent volume. Additionally, for cargo stored in containers for extended periods, utilizing SOCs can be cheaper as there’s no need to pay for demurrage and detention fees.
However, the purchase of SOCs can incur significant expenses. A used 20-foot container may cost between $1,500 to $3,000, while a used 40-foot container could range from $2,500 to $5,000. Moreover, there are maintenance, storage, and management costs associated with SOC containers.
It’s essential to evaluate the cost-effectiveness of purchasing a container. For this, you can calculate potential savings by considering the frequency of shipments, rental fees, and the expected lifespan of the container.
How does ASLG help your container shipping?
Whether with SOC containers or COC containers, our ASLG can offer competitive pricing and cost-effective logistics solutions. We have access to a diverse range of containers, allowing you to select containers tailored to their cargo requirements, such as standard dry containers, refrigerated units, or specialized containers for specific goods.
In addition, ASLG operational support can extend to handling customs procedures, managing container returns, and addressing any logistical challenge during shipping. And we support visibility management for tracking and monitoring the containers.
