Groupage Transport

What is Groupage?

Groupage, also known as partial shipment or shared transport, is the process of combining smaller shipments from different shippers into one larger load. This occurs when individual shipments are not large enough to fill an entire truck or container. By combining these shipments, available transportation capacity is utilized to the fullest, leading to more cost-effective transportation.

How does Groupage work?

The process of groupage involves several steps:

1. Collection: Small shipments from various senders are collected at a central point, such as a warehouse or distribution center.
2. Consolidation: These shipments are combined into one larger cargo, taking into account destination and type of goods.
3. Transport: The consolidated cargo is transported to a central point in the destination area.
4. Distribution: At the final destination, the shipments are separated again and delivered to the respective recipients.

This process allows for more efficient use of transportation resources and reduces the number of trips, which is both cost-saving and environmentally friendly.

Benefits of Groupage

Applying groupage offers several advantages:

• Cost savings: Sharing transportation costs with other shippers significantly reduces the cost per shipment.
• Space use: Making optimal use of cargo space reduces the number of transports required.
• Sustainability: Fewer transport movements lead to lower carbon emissions, contributing to more environmentally friendly logistics.
• Accessibility for small businesses: Companies with smaller shipments can also benefit from advantageous transportation rates.

When do you choose Groupage?

Groupage is especially suitable when:

1. Your shipment is too small for a full truck or container.
2. Cost reduction and efficiency are important considerations.
3. You are flexible with delivery times, as groupage can sometimes have slightly longer transit times due to multiple loading and unloading points.

Groupage is a cost-effective way to transport smaller shipments by combining them into one larger load. It offers numerous benefits, including cost savings, sustainable transportation and accessibility for smaller companies. By choosing the right logistics partner, companies can take full advantage of the benefits groupage offers while effectively managing any challenges.

Groupage in different transport modes

Groupage can be applied in various modes of transportation:

• Road Transport: Several pallets or packages are combined in one truck.
• Sea freight: Known as LCL (Less than Container Load), where multiple shipments share one container.
• Airfreight: Smaller air cargo shipments are merged to save costs and make better use of space.

This flexibility makes groupage a versatile solution for a variety of logistics needs.

When should you choose consolidated shipping by sea container?

In ocean freight, this is called groupage LCL (Less than Container Load). You share a container with shipments from other shippers and pay only for the space you use. The alternative is FCL (Full Container Load): You rent an entire container, even if it isn't completely full. A 20-foot container, also known as a TEU, offers roughly 33 m³ of cargo space.

For LCL shipments, the shipping line or consolidator typically charges per cubic meter or per 1,000 kilograms, whichever is higher. This is called the W/M rate (weight or measurement). A shipment of 4 m³ and 1,200 kilograms is therefore billed as 4 m³. In addition, with LCL, you pay fees for consolidating and deconsolidating the container at a so-called CFS (Container Freight Station), both at the port of departure and at the port of arrival.

The volume at which LCL becomes more cost-effective depends on current freight rates. In practice, a full 20-foot container often becomes a viable option starting at around 13 to 15 m³. If in doubt, request quotes for both options, including CFS fees.

Customs for Groupage Shipping

A consolidated container contains shipments from multiple shippers destined for multiple consignees. For customs purposes, each partial shipment is considered a separate shipment. The consolidator issues a master Bill of Lading for the entire container and a separate house Bill of Lading for each partial shipment. Each consignee uses their own house B/L to import declaration and needs its own EORI number for that purpose.

Even before arrival in the EU, the details of each partial shipment must be reported in the ICS2 system. In the case of groupage shipments, the consolidator submits this information per house B/L, in addition to the carrier, who reports the container as a whole. A vague description of the goods or missing information from a single shipper can delay the unloading of the container.

Upon arrival, the container is transported under customs supervision to the CFS warehouse, where it is unloaded. The goods remain in temporary storage until the import declaration has been processed. Only after customs clearance may the recipient pick up their portion of the shipment. If the CFS warehouse is not located in the port of arrival, the container is often transported to a warehouse inland under a T1 document. With such a T1 document The goods remain under customs supervision until they are cleared at their destination.

An inspection of a single shipment affects the entire container

The biggest risk of groupage lies in the dependence on other shipments. If customs selects the container for a physical inspection because of a single partial shipment, unloading the entire container can cause delays. Your shipment will then be held up, even if your paperwork is in order. For time-sensitive goods, therefore, choose a consolidator with a good understanding of the other shippers, or consider FCL.

The customs value of an LCL shipment

For import duties, the customs value is calculated as the price of the goods plus transportation and insurance costs up to the EU border. For LCL shipments, your share of the ocean freight is included in this amount. CFS costs at the port of departure are also included, since they are incurred before the goods enter the EU. The costs for unloading at the port of arrival and transportation to your warehouse are not included in the calculation of import duties, provided they are listed separately on the invoice. They are, however, included in the calculation of VAT. A correct breakdown of the costs on the invoice prevents disputes with the customs clearance.

Consolidated shipments to countries outside the EU

Groupage shipments by road to countries such as Norway, Switzerland, or the United Kingdom require more preparation than groupage shipments within the EU. Each shipper on the truck needs its own export declaration for its part shipment, usually an EX-A or EU-A. An EU-A is used for exports to countries within Europe but outside the EU, such as Norway and Switzerland. Which export documents Whether additional documents are required depends on the goods and whether your customer wishes to use a preferential rate. In addition, a transit document is often required for transport to the destination.

In practice, we often see groupage trucks waiting at the border because a single export declaration is missing or does not match the cargo. Therefore, be sure to submit your documents to the carrier or the customs broker on time and in full.