The consolidation services are a high level in the development of each transport mode, being one of the solutions for applying the “Just-In-Time” concept in many industries. They are also a real challenge for the logistics companies, that operate them, requiring a serious know-how, a well-developed partners’ and warehouse network and a perfect organization of the clients’ door pick-ups and deliveries.
As far as the maritime transport is concerned, this concept „Less Than a Container Load“ (LCL) involves the consolidation of many separate shipments, belonging to different clients, in one export or import container, being shipped from a consolidation to a de-consolidation warehouse (CFS = Container Freight Station) with the possibility for a door-to-door transportation and all the additional value-adding services. The clients enjoy the possibilities to plan their shipments, to keep only the currently required stock, thus optimizing their costs.
In case you experienced prepaid import ocean-freight consolidation shipments from Asia and China at CFR or CIF Incoterms agreed with your trading partner, you most probably asked yourself why the forwarding company at destination billed you with very high local destination charges, often exceeding the reasonable seafreight costs and even the transportation costs for a full container, provided the shipper has arranged and paid for the transportation to the discharging port or to the internal de-consolidation CFS.
The reason lies behind the specifics of selling prepaid CFR/CIF consolidation services on the Asian markets. The usual practice there is to sell the sea-freight at much lower levels compared to the real ones, payable in case the cargo receiver negotiates the transportation costs. Sometimes the prepaid rate levels are even negative. Just because there is no such thing like “free lunch”, someone has to cover the real costs and this is usually the cargo receiver. For this reason, as cargo receiver, you’d better choose to arrange the LCL transportation yourself by negotiating Incoterms, that enable you do so, i.e. EXW, FCA or FOB.
In case you intend to leave the transport arrangement on the shipper’s shoulders by negotiating CFR or CIF terms up to de-consolidation CFS, we would recommend you to take the following steps, before confirming the shipment to the cargo sender.
Check who the delivery agent in Bulgaria will be and ask him or the shipper for clear, particular and full information about the local charges, that will be billed to you upon the shipment arrival. Request a confirmation, that these will be the final charges referring the particular cargo details and that no other not-mentioned charges would possibly be billed to you in case the shipment details remain the same.
Request information about the shipment routing and which will be the port of discharge through which the cargo will reach you. Make sure you will be able to track and trace the consignment via the Internet and that it is not supposed to be routed via untypical ports, which could lead to a longer, than the usually experienced and required transit time.
Contact your trusted usual logistics service provider (LSP) and ask him to provide you with a quotation pertaining to the case, where you are supposed to arrange the transport, i.e. Incoterms EXW, FCA or FOB, then make your comparison. Make sure you compare “apples with apples”, i.e. same transport stretches and the respective applicable costs.
If the comparison satisfies you and it is in favour of letting the shipper arrange the transportation for you, then accept his proposal, otherwise ask him for an offer and negotiate with him the shipment on FOB, FCA or EXW basis.
Unimasters Logistics SCS Ltd offers global maritime consolidation solutions for your business to and from Bulgaria via Bulgarian, Greek, Romanian and North European ports, depending on the particular client requirements. We are here to assist you with the optimization of your supply chain with an advice, consultancy and an offer.