Chapter 1: Co-loader and Freight forwarder; an Overview of different shipment services
You want to deliver your cargo that is less than a container to your desired destination. But you are perplexed about the service that you need to choose for your delivery.
No worries! Go through the overview of both the services to have an idea of their scope of work. It will help you decide which one is the right one for you.
1. What does a Co-loader do?
Co-loader is the third party whose main responsibility is to consolidate the cargo.
This cargo is most often the LCL ((Less than container) shipment that is meant to deliver from China to other destination countries.
Since the cargo is less than a container, the best way is to consolidate it which means the co-loaders merge this cargo with other cargo to fill up the container.
For this purpose, the co-loader has to find a consolidator or a freight forwarder.
And one thing they have to keep in mind is that these consolidators or freight forwarders must handle the same kind of cargo as theirs.
This is to ensure the safety of items of cargo. Another responsibility of the co-loader is to pass the rights of shipping to the concerned consolidator or freight forwarder.
The transfer of shipping rights facilitates making the shipping process smooth and error-free.
2. What does a freight forwarder do?
A freight forwarder can be either an individual or company whose primary function is to coordinate the shipment of cargo from one destination to another destination.
They ship the cargo through either a single carrier or multiple carriers.
Freight forwarders offer different delivery routes that are via rail, air, road, or sea. They make sure to deliver the goods to your requested location in good condition.
The freight forwarders aim to make your cargo delivery smooth and hassle-free. They offer a broad variety of services to make your experience a pleasant one.
Following are the main areas of their service offers.
They negotiate the freight charges.
Prepare the required shipment documents.
Make the arrangements for cargo insurance and monitor the shipment.
They book the storage or warehouses in advance.
Make the bookings to reserve space in the containers of carriers.
Make sure the cargo is properly packaged, labeled, and transported.
Offer expert consultation on the best routes suitable for you including charges, custom laws, trade laws of the country, and other needed instructions.
Keep in contact with the customs agents of the destination country to ensure that the customs regulations are complied with.
3. Are Co-loader and NVOCC the same?
The co-loader and NVOCC are the same. NVOCC stands for Non-Vessel Owning Common Carrier. They are the enterprises that do not own transportation vessels of their own.
Instead, they offer transportation services for other transporters. They are the same because both co-loaders and NVOCC don’t operate their shipping vessels.
They work by reserving space in the other shipping vessels through which they transport the cargo of their customers.
Most of the co-loaders and NVOCC do not own shipping vessels but own containers where they load and consolidate their customers’ goods before transporting them.
NVOCCs mainly act as brokers who are qualified to book the vessel space with the carrier companies.
On the other hand, the freight forwarders have their shipping vessels and containers.
4. How to find a Co-loader in China?
When you are new to this process, you probably don’t have any idea how and where to find suitable co-loaders for your cargo delivery.
As China is the major engine for global trade so there is a vast variety of services of co-loading operating in mainland China which makes it difficult to choose any one service.
In that case keep the below factors in mind to aid you in finding the most suitable co-loading service for you in China.
Different co-loaders will offer their services at different charges, therefore you must find the one that is ideal for you, before finalizing any one of them.
The best way is to ask them to quote their prices ahead, so you can compare all the rates and decide the one that suits your budget best.
And keep in mind, not only rates, but the quality of service is also important. So if you decide on a certain rate, their service must be of high quality without any compromise on the handling and safe delivery of cargo.
Always give priority to the co-loader who is certified. The certification aspect is important to check before you engage in any kind of business deal.
This will help you to eliminate the probability of getting scammed by a fake or scamp co-loader. Another benefit of checking certification ahead of time is that you always have a common point for resolving any kind of dispute regarding work.
This will make your work smooth and error-free.
Scope of services
Co-loaders offer distinct services according to the charges and demand of the market. Some only offer to consolidate and transfer the goods, while you have to do the packaging yourself.
While some offer complete services from packaging, finding space in containers, consolidating to finding the most suitable forwarder for you.
The ideal co-loaders is the one that offers a complete package of services so you don’t need to bother hiring another service for the remaining tasks.
Choose the co-loader who has good networking within the shipment industry. Networking is critical because, such co-loaders have strong connections with various carriers and freight forwarders, hence can recommend you the best of the services.
Networking helps you find the best deals at the most reasonable prices.
It is particularly helpful for new people who do not have a lot of know-how of the industry and need assistance in shipping goods to their destination.
5. How to find a freight forwarder in China?
Among all the Asian countries, China is the leading wholesale market, thus the country has so many freight forwarding services that ship cargo from China to other countries.
Foreigners often struggle to find the most suitable freight forwarder because of the language barrier and other constraints.
If you are also struggling in finding a freight forwarder, keep in mind the following factors while you evaluate different services. It will make the process easy for you.
Legally registered company
Always choose the freight forwarder who is a legally registered company and thus is a legal entity. Registered companies eliminate the chances of fraudulence and scam because there have been such incidences in the past.
To save yourself from such incidents, always go for registered companies. This will also help you protect your goods if there is any dispute in the future.
Good in communication
The major obstacle in the way of foreigners while hiring different services in China is language.
So when you are about to finalize a freight forwarding company make sure they have a customer representative who knows both languages, Chinese and yours.
Besides language, the way of their communication should be clear and swift to avoid any miscommunication in future business.
If any of these attributes is missing, don’t hire such freight forwarders because effective communication is the key to good business.
Reputation tells you a lot about the services of any freight forwarding company. Choose the ones who have a good reputation and are in the business for quite some time.
A great way to check this is that reputable services have the membership of the International Federation of Freight Forwarders Associations (FIATA) or World Cargo Alliance (WCAworld).
Both organizations are international representatives of freight forwarders. Members of such organizations are worth trusting and have strong services and financial records.
Diverse supply chain network
A good freight forwarder has a strong supply chain network. Their networking with custom agents, logistics providers, and various industry representatives helps them get their job done easily.
All these network connections enable the forwarders to offer the best rates to their clients like you along with quick and accurate documentation, smooth clearance from customs, and many more advantages.
Chapter 2: Pros and cons of Co-loader and freight forwarder
If you decide to hire either a co-loader or freight forwarder for your cargo shipment, keep in mind that both kinds of services come with their advantages and disadvantages.
Give these pros and cons a thorough read, so you can decide which one is suitable for you.
1. Pros and Cons of Co-loading:
Pros of Co-loading
Co-loading offers various advantages to the shipment industry. Other services that benefit from co-loading include shippers and good receivers. You will get the following benefits from co-loaders;
Less Cost: Co-loader will consolidate the goods for you within the container. So you don’t need to pay for the whole container instead you only pay for the space occupied by your cargo in a container.
Safe Transportation: Co-loaders make sure to consolidate the goods after safe and sound packaging of the cargo. This ensures the safe shipment of goods inside the cargo.
Less time: Since all the consolidated goods are meant to go in the same direction, this eliminates the need for unloading at various spots thus reducing the overall time of shipment.
Reduced Pollution: consolidated cargo plays its role in reducing environmental pollution by reducing CO2 emissions. It also reduces road congestion.
Cons of Co-loading
Co-loading also has some drawbacks that you need to keep in mind if you want to hire this service. The cons of co-loading are;
Shipment Criteria: Not all kinds of goods can be consolidated. Shipment goods need to meet certain criteria to be aligned together. They should be compatible enough to be loaded on the same container.
Complex scheduling: The shipment schedule is often complicated as it requires input from various service providers including carriers and shippers as well. Getting all of them on one page requires time but once done it’s a smooth process.
Reverse logistics:Co-loaders not only consolidate shipment for delivery but also do this job for the items that are returned. This keeps the co-loaders often occupied.
Short lead time:One of the major issues co-loaders face is that they have to meet the short lead time demanded by consumers. They need to comply with the retailer’s priority immediately and consolidate the goods as per demand.
2. Pros and Cons Freight Forwarding
Freight forwarders make your cargo shipment quick and safe. But all good things come at a cost so there are some disadvantages of the service as well.
Pros of freight Forwarding
The benefits of hiring freight forwarders for your business include;
On-time delivery: Freight forwarders offer professional services of timely pickup and delivery. Their team of professionals keeps a tab on every process and plans the transportation thoroughly.
Systematic Tracking system:Cargo takes quite some time to reach its destination. In the meantime, freight forwarders have an efficient tracking system in place for keeping a track of the goods along the route.
Secure and cost-effective:Freight forwarders make sure the stuff is properly packed, and then sent to reliable carriers. They deal with fragile items with utmost care. Also, they offer a very reasonable price for the delivery service.
Correct documentation: Shipment between two countries needs complete documentation. Thus professional freight forwarders help you with the complete legal procedure and accurate documentation required for shipment.
Cons of a Freight Forwarding
Here are some downsides of hiring freight forwarders.
Authorization issues:You are entrusting your valuable goods with a company that you don’t have any control over. So many times business owners find it hard to find a good freight forwarder that they can trust since all of them claim to be the best.
Incomplete data:If freight forwarders do not take complete data from the client, or the data is lost because of inefficient translation, it affects the delivery time. According to stats, data deficiency causes 15% of the shipments to delay.
Overcharging: If you do not properly file all the documentation, or if you are new to the process, you might get scammed by the fraudulent forwarders who charge you according to their will.
Loss of product: Product loss is an inevitable part of the shipment process that happens sometimes. If you hired a reliable company, all is good but if you hired an inept service, you can experience huge losses as you don’t have any control over how they pack and deliver.
Chapter 3: Key concepts about Co-loader and freight forwarder
Co-loaders consolidate your goods while freight forwarders deliver your shipment from one destination to other.
Freight forwarders can hire co-loaders for the consolidation service or can consolidate themselves.
That is to say, a freight forwarder can be a co-loader but a co-loader cannot be a freight forwarder. Read the basic key concepts below to get further clarity on the topic.
1. How does Co-loading work?
Their work starts from the point you hire them. You provide them goods after contacting them. The next thing they do is to reserve space in the container for your cargo.
Next, they search for reliable shippers and consolidate your goods with theirs. They do this until a particular container is filled.
Next, they load the container to the freight forwarder vessel and pay the charges for the container shipment. The charges are determined by the container size and delivery time.
2. How does freight forwarding work?
First, you find a reliable freight forwarder service in China and hire them for your cargo delivery.
Next up, they pick up the cargo from your location and then determine the freight charges according to the mode of delivery which can be air, land, or ocean freight.
Then they pack the cargo, consolidate it if needed and load it on the shipping vessel. They also clear the customs, both at origin and final destination beforehand if you paid for this.
Next, your freight forwarder will transport the cargo from the final destination to the warehouse. The final step is unloading and delivery to your desired location.
3. What are the different types of co-loading?
Co-loading has two variations, each of them operates in their way.
Active co-loading is also called planned co-loading. In this co-loaders get to decide the shipment time and size which can be changed according to the client’s requirement.
This type of co-loading is difficult to coordinate as every factor needs to be controlled by co-loaders.
Passive co-loading is also called opportunistic co-loading. In this case, co-loaders consolidate the shipment, whenever the shipment time, size, and other factors coincide.
That means co-loaders take the advantage of the opportunity, whenever there is one.
Is co-loading the same as LTL?
LTL means Less-than-truckload. It is similar to co-loading because, in both, the cargo is less than a truck thus different companies share space on the same vehicle.
Both of them are advantageous because consolidated cargo reduces the lead time. It also eliminates the need for multiple distributions at different centers.
Co-loading and LTL are safe delivery options because the process involves fewer touches.
4. Why cheapest freight forwarders aren’t the best?
When looking forwarders many business owners get thrilled when they are offered the cheapest prices from the Chinese forwarding companies.
However, you need to be cautious in such cases, because if your freight forwarder is quoting a price that is hard to believe, then don’t believe it because there might be something wrong with their service.
There is a great possibility of them being a scam. To prevent getting scammed, compare different prices to get an idea of the average market rate. If anyone is offering below that rate, don’t accept them.
Chapter 4: Co-loading V/S Freight forwarding: Which one to choose?
Freight forwarding and co-loading aren’t the same. Co-loaders consolidate the cargo and deliver it to a third party which can be a freight forwarder.
While a freight forwarder with a diverse range of services offers to ship the cargo from one location to another. Here are the main differences between both the services;
Co-loaders are responsible for the consolidation of your cargo with other companies’ cargo. They also reserve space in the shipment containers and search for reliable freight forwarders for the shipment of your goods. Co-loaders are more like a middleman who works for shippers.
Freight forwarders are responsible for handling different activities related to the transportation of cargo including organizing the shipment of cargo from one destination to other using different modes. Freight forwarders are like agents to the shippers.
The co-loaders may or may not issue their bill of lading. However, their bill of lading is generally not of any global standard.
The freight forwarders issue their necessary shipping documents including the bill of lading. All these documents are internationally standardized as recognized by FIATA.
Co-loaders do not own warehouses. They transport the cargo to third parties like carriers or freight forwarders who own warehouses.
Some of the big freight forwarder companies own and operate their warehouses, which adds value to their service for clients.
Co-loaders also do not own containers most of the time. However, some big co-loader companies might own containers.
Freight forwarders do not own or operate any container because they make use of the shipping lines for cargo delivery.
Co-loaders usually operate individually within China. Though they have strong networking with other industry services such as carriers, customs, and freight forwarders.
Freight forwarders have a strong network around the world who often cooperate while handling cargo on the global level. This cooperation may be exclusive or non-exclusive.
Chapter 5: Frequently Asked Questions
1. How to decide which method is better, Co-loading or freight forwarding?
The main difference between co-loading and freight forwarding is the way they handle the goods. So it depends on your conditions, which one suits you better.
If you can hire a co-loader they will consolidate the goods for you and then transfer them to a freight forwarder.
However, if you hire a freight forwarder they will either hire a co-loader or consolidate the good themselves. After that, they will ship the cargo to the desired location.
The services that co-loaders offer are limited to the consolidation and reserving container space for your goods.
While the services offered by freight forwarders are vast including, goods collection, packaging, consolidation, custom clearance, shipment to the warehouse, unloading, and final delivery.
If you opt for forwarder’s additional services you have to pay accordingly.
2. Is there any difference between Co-loading and LCL?
No there is no big difference between co-loading and LCL (less than container load). These are two different terms with the same processes behind. Co-loading and LCL both intend to fill a container before it is shipped.
This service is most suitable the business owners who want to ship cargo from China that is less than the size of the container.
These services will consolidate your goods in the container along with other company’s goods.
So you don’t have to pay for the full container charges. It helps you save a lot of money.
3. What is the difference between co-loader and carrier?
Co-loader and carrier offer two different services in the shipment industry. Co-loader consolidates the cargo and fills it in the container.
On the other hand, the carrier is the one who offers vessel services that transport containers from point A of origin to point B of destination.
A Carrier vessel can be either a ship, aircraft, or truck. Depending upon the mode of transfer, the carrier charges a different amount for container shipment.
4. Why original bill of lading is important in Co-loading?
Bill of lading is a legal document that is generally issued by the shipper or the carrier.
This bill is important in co-loading as it lists all the important details including the type and nature of cargo, quantity, the destination of the shipment, and ownership.
Bill of lading acts like a shipment receipt while goods are delivered at the predetermined destination. It also helps in the calculation of the charges for cargo consolidation.
If you are hiring a co-loading service, you need to give them a bill of lading document, after that they will accept your goods.
5. What are the benefits of freight forwarding?
Many business owners buy goods from China that offers quality products at the cheapest rates globally. They need a delivery service for the transportation of goods from China.
If you are also hired a freight for the delivery of your goods, get ready for the following valuable advantages. They timely pick up the goods and deliver them in time.
There are no unnecessary delays if they are a professional service. The tracking system of freight forwarders lets you track your cargo so you can know where it has reached.
They also provide foolproof security which means they ensure no cargo is lost or damaged. Moreover, they offer you discounted prices if you are a regular customer.
Freight forwarders also take care of all the documentation for you. They have a professional team on board that helps in efficient inventory management.
Freight forwarders also have warehouses, where they keep your cargo safe in case of unavoidable delays in delivery.
6. What are the benefits of co-loading?
Co-loaders offer various advantages through their service. The shippers get the benefit of reduced shipping charges because of goods consolidation, lesser lead time with the help of LTL transportation, and reduced risk of cargo loss or damage.
The recipients also get the advantage of co-loading as it helps them reduce the inventory and the receiving charges.
Co-loading service is also environmentally friendly because it reduces the CO2 release, and also reduces the congestion of roads. Consolidated goods mean lesser containers, hence lesser vessels which in turn reduces environmental pollution.
7. What are the services offered by freight forwarders?
Freight forwarders are critical elements of the global supply chain which offer the following range of services to their clients.
Freight forwarders own warehouses, thus safely handling goods at high-traffic locations by storing them in the warehouses.
They are skilled in the preparation of all the required documents for exiting or entering any country.
Assist you in obtaining the best insurance coverage for your shipment.
They consolidate the shipment if it is small in size thus reducing the shipping cost.
They book the best carrier service for domestic or international shipping.
When transporting internationally, they let you track the location of goods through a streamlined tracking system.
The dynamics of the shipping world are changing rapidly and China is becoming the world leader for global trade.
Many business owners now buy their goods from China in bulk. For this purpose, they need to hire various services to ensure safe and timely shipment of the purchased goods.
If you are also one of these businessmen or thinking to become one, you will be needing the services of freight forwarders and/or co-loaders.
Freight forwarders take care of your shipment from the point of goods collection till the final delivery at your requested location.
While the co-loaders can consolidate the goods as per your request and then handle the goods to the third party that may be a freight forwarder.
If you want to choose any one service among these, consider the factors mentioned in the guide and see which option suits your business the best.
Keep in mind the pros and cons of both services and then decide accordingly.