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What is Groupage?

By May 17, 2022September 20th, 2023No Comments6 min read

If you’re looking to import or export smaller quantities of products then you will need to find ways to make the shipping process as cost-effective as possible. Groupage is one such means to reduce costs, making it viable to ship in small quantities. It can refer to shipping via road, sea or air but it always involves the same principle of combining goods from different shippers into a single load in order to reduce costs.

At SSO Logistics, we can provide effective groupage transportation by road within the UK or arrange for groupage transportation via sea if your goods are going further afield.

What you need to know

Cargo transport will typically involve sending goods either as Full Container Load (FCL) or as a Less than Container Load (LCL). When you don’t have a full container load to ship, then your goods will be shipped with goods from other senders. This is referred to as groupage.

It is a group of LCL cargo from different shippers that are consolidated and then sent to various consignees in a single freight container as a full container load. This is also sometimes known as Cargo Consolidation or Groupage Operation.

In practice, this means that when groupage shipping is being used, each freight container will have several different LCL cargo shipments that originate from a single port to be delivered to other common ports or separate ports.

The agent who arranges to pick up less than container loads cargo from the shipper and then delivers it through transporting it in a groupage container is known as a groupage operator or cargo consolidator.

The groupage operator will book a suitably sized container with the shipping line. The cargo from different shippers will be loaded into the container and the operator will then issue a House Bills of Lading (HBL) to all customers whose goods are being shipped in the container. The shipping line will then issue the groupage operator with the Master Bill of Lading.

Each LCL shipment in the container will have a separate Bill of Lading with details of the consignor and consignee. When the container arrives at the destination port, these LCL cargoes will then be unloaded from the ship, will be cleared and then the respective recipients will take custody of their goods.

The groupage operator, in most instances, will be an experienced freight forwarder. The forwarder acts as the meeting point between the different senders. They are the person in charge of assembling the shipment, combining the goods and who is responsible for helping to ensure their safe transit. Because groupage involves combining goods from different sellers it’s important that the goods are combined correctly. Also, some combinations will be avoided, including any goods that are potentially dangerous such as chemicals and foodstuff for instance.

What are the advantages of groupage?

The biggest advantage of using groupage services is the cost. Rather than paying for a whole container, you only pay by the cubic metres used or the weight of your cargo. You only pay for the space taken in the container, essentially sharing the container costs with other consignors whose goods are transported with your own.

This allows businesses to send or receive smaller quantities and is beneficial to both the seller and customer, freeing them from the need to maintain a large inventory. Businesses can take risks with smaller quantities of new product lines and smaller businesses don’t have the significant risk and outlay associated with larger quantities of goods. It effectively makes it easier for smaller businesses to compete with larger organisations.

A full container load of groupage cargo will usually be packed to capacity, reducing the possibility of cargo moving around in transit and when it’s being handled. If you opt for a full container and only half or three quarters fill it, not only will it cost you more, it will also be at more risk of arriving damaged.

A groupage operator will ensure that your goods are packed appropriately, handled carefully and transported to their destination as quickly and cost-effectively as possible. Using groupage allows smaller businesses to move into new markets and to try out new products with reduced risk and less initial outlay.

As well as sea freight, groupage can also be used in relation to road and air transport, and in most cases, it will be the most cost-effective and practical means of transporting smaller quantities of goods.

When would you need to use groupage?

If the goods that you need to ship are not enough to fill a container, van or truck on their own then it is worth considering using groupage. This allows you to ship smaller quantities of goods cost-effectively, try out new product lines or allow new customers to place smaller initial orders.

It’s a practical means by which to ship goods across the country and the world allowing you to try out new markets without too much initial outlay and with reduced risk.

It also reduces your company’s environmental footprint as your goods travel with goods from other shippers rather than needing a special journey all of their own.

At SSO Logistics, we provide a groupage service for our customers who might not send out single pallets or even have full load deliveries. We have vehicles going all over the UK on a daily basis, and we can transport mixed loads from different customers in one vehicle when the goods are going to the same geographical area.

Contact us today to find out more about our groupage and freight forwarding services. Our friendly and experienced team are always happy to answer any questions you may have.

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