Groupage shipment is a cost-effective and efficient solution for businesses engaged in international trade. In this post, we will discuss the groupage shipping meaning and its benefits, helping you understand how this shipping method can streamline your logistics operations.
What are groupage shipments?
Groupage shipment also knows as consolidated shipping. It is a logistics solution that takes multiple smaller shipments from different shippers into a container. This method maximizes container space utilization and allows businesses with smaller shipping volumes to benefit from cost-effective sea freight.
Who is a groupage operator?
A groupage operator, also called a consolidator or freight forwarder, specializes in managing groupage shipments. They coordinate the collection of shipments, arrange transportation, and ensure smooth customs clearance.
Throughout the international shipping process, the groupage operator serves as a point of contact for shippers, providing updates, answering queries, and offering customer support. They maintain clear communication and ensure smooth coordination between all parties involved.
The groupage operator’s expertise and logistics management play a vital role in successfully executing groupage shipments. An expert groupage operator like Airsupply also enables businesses with smaller volumes to benefit from cost-effective and efficient logistics solutions.
How does groupage shipment work?
Groupage shipment involves cargo consolidation from different shippers at a warehouse or logistics facility. These goods are then packed and loaded into a shared container for transportation.
Then the groupage operator will handle all the necessary documentation for the consolidated shipment. They also will arrange transportation, either by sea, air, or land, depending on the agreed mode of shipment.
At the destination port, the container goes through the customs clearance process. The groupage operator handles the customs documentation, declarations, and compliance procedures on behalf of the shippers.
Once the container is through customs clearance, it will be dispatched to the destination warehouse or logistics facility. The groupage operator separates the individual shipments and arranges for the delivery of each shipment to its respective consignee or destination address.
What are the advantages and disadvantages?
Opting for groupage shipping offers several advantages:
Cost savings
Groupage shipping allows businesses to share container space and transportation costs with other shippers. You can access competitive shipping rates by consolidating smaller shipments into a single container.
Flexibility and scheduling
Groupage shipments often have predefined schedules and regular sailings. It provides businesses with flexibility in choosing shipment dates and frequency. It allows them to align their shipping activities with production schedules, customer demands, and inventory management.
Simplified customs clearance
With groupage shipping, all consolidated shipments go through a single customs clearance process. It simplifies paperwork, reduces the number of customs declarations, and streamlines the customs clearance procedure.
Environmental sustainability
Groupage freight contributes to environmental sustainability by optimizing container space utilization. Because fewer containers are needed, resulting in lower fuel consumption and reduced carbon emissions.
While groupage shipping offers several advantages, there are also some potential disadvantages. These include:
Longer transit times
Groupage shipments may have longer transit times than full container loads (FCL). As the container needs to be consolidated with various shipments, there is additional time for collection, consolidation, and deconsolidation at the destination.
Limited flexibility for special requirements
Groupage shipping may have limitations when accommodating specific requirements of individual shipments. Shippers with specialized needs, such as temperature-controlled goods or fragile items, may find it more challenging to meet their shipping requirements within a groupage shipment.
How to calculate groupage shipment?
To calculate the cost of a groupage shipment, you can use the following formula:
Total Cost = (Individual Shipment Weight or Volume x Groupage Rate) + Additional Charges + Destination Charges
Here’s an example to illustrate the calculation:
Let’s say you have three individual shipments that need to consolidate into a groupage shipment:
Shipment 1:
Weight: 200 kg
Groupage Rate: $5/kg
Shipment 2:
Weight: 150 kg
Groupage Rate: $5/kg
Shipment 3:
Weight: 100 kg
Groupage Rate: $5/kg
Additional Charges: $100
Destination Charges: $200
To calculate the total groupage shipments cost:
Total Cost = (200 kg x $5/kg) + (150 kg x $5/kg) + (100 kg x $5/kg) + $100 + $200
Total Cost = $1000 + $750 + $500 + $100 + $200
Total Cost = $2550
In this example, the estimated total cost for the groupage shipment would be $2550.
Documents required for shipping by groupage
When shipping via groupage, there are several essential documents.
Commercial invoice
It provides a detailed description of the shipped goods, including their value, quantity, and total cost. It is used for customs purposes, calculating duties and taxes, and ensuring accurate shipment declaration.
Packing list
The list specifies the contents of each package or carton within the shipment, such as the item description, quantity, etc. It helps in the identification and tracking of goods during consolidation and deconsolidation.
Bill of lading
It is a contract between the shipper and the carrier that acknowledges the receipt of goods for shipment. Groupage Operator will issue a House Bill of Lading (HBL) to the shipper, and the freight carrier will offer the Master Bill of Lading (MBL).
Certificate of origin
It is an official document that indicates the country where the goods are produced. Typically issued by the country’s Chamber of Commerce, it serves as proof of the origin of the goods.
Dangerous goods or HAZMAT certificate
When shipping dangerous cargo, the shipper must provide a HAZMAT declaration. This declaration contains all relevant information about the hazardous goods, ensuring compliance with regulations and enabling proper handling and transport.
If you are unsure about the comprehensiveness of your shipping documents, feel free to contact the Airsupply team for expert advice.
When to use groupage transport?
- Delivery deadlines are not crucial, as groupage shipping requires grouping several deliveries together, which will cause longer shipping times.
- If the dispatched goods aim for delivery in different countries, groupage transport allows for efficient coordination and consolidation of shipments destined for various locations.
- The goods can easily be combined into one or several pallets, optimizing space utilization within the transport vehicle.
- Considering the above circumstances will help you determine whether the groupage transport match for your shipping needs.
How can Airsupply help you?
With Airsupply’s worldwide network of trusted carriers, you can gain reliable partners specialized in groupage transport. They not only support enough cargo space but also offer dedicated consolidation services at competitive prices.
Whether you want to ship by sea, trucking, air shipping, or railway transport, Airsupply provides valuable guidance on best practices. Their expertise ensures a smooth and compliant shipping experience. Click below the button to request quotes, compare rates, and select the most suitable option for your groupage shipment.
