Have you ever wondered the difference between shipper owned and carrier-owned containers?
Businesses use containers to transport goods around the world. They are either owned by Shipper Owned Container, and they’re a great way to organize and move your products.
One of the main questions you will encounter when looking at shipping options is, “What is the difference between a shipper owned container & carrier owned container?”
There are trade-offs and compromises in both directions, and those trade-offs aren’t always clear. The purpose of this article is to explain the specifics of these two options. We will help you to decide what the best option is for your organization and your operations.
Whether you buy or hire your shipping container will depend on how you want your service to look. If you want more control, you can opt to own the container. But, if you want a more traditional experience, the carrier-owned option might suit your needs better.
We’ll explain these options in more detail and help you ensure your business is using the best one for you! This article will also cover some other aspects such as choosing a proper container size and calculating shipping costs. You will be in a position to make an informed buy without going over budget.
Here’s what you need to know about these two types of shipping containers:
Shipper owned containers are for companies that ship large volumes regularly.
Your business, as the Shipper Owned Container, would purchase the container from a third-party company for the shipment of your products. When you’re ready to ship your container to its destination, you would lease a slot on a carrier for transport from the container’s place of origin to its final destination.
This is the most economical way to import or export goods, as you save money in so many different areas.
SOCs are more common in Asia, where there are fewer restrictions on foreign ownership of assets.
The benefits of shipper owned containers include:
The Shipper Owned Container and has the option of multi-purposing it. When you’re not using it to send your products around the world, use it as a storage unit, or convert it into a mobile office. You could also rent it out for short periods of time or sell it.
The choices are endless and you decide how to use it best according to your needs.
If you own your shipping container, you’ll have to pay fewer demurrage and detention fees on your shipments. With SoCs, delays in port are not as costly as they could be if you were using a CoC. This is because, if you own the container, you don’t owe anyone penalties if you return the container after the due date in the agreement.
If you’re looking to save money, this is an important consideration since it could potentially save thousands of dollars over time.
With the options available with SoC containers, you won’t have to wait for manifests to fill up, or for a carrier-owned container to be available where you need it. You won’t need to wait for another business’s shipment to arrive before yours can leave the dock. You have the freedom to send your shipment whenever you want to.
If you’re shipping large volumes of products, owning your own container will be a budget-friendly and flexible option for you.
If you wanted to start up another business at any time in the future, having a mini-army of shipping containers is going to make moving large amounts of goods much easier than finding a carrier who can send a shipment.
The Shipper Owned Container is responsible for the maintenance of the container. If you are purchasing a container outright, you will be responsible for all maintenance and repair costs.
You can customize your container to suit your specific needs by adding racks or shelving systems inside. You could also brand your container. This gives your company a more professional appearance when importing or exporting goods.
Your customer will know that they are dealing with someone who is serious about their business. It will give the impression that you do things right.
If you’re not shipping regular cargo in large volumes, it doesn’t always make sense to own and maintain your own containers. You can use a Carrier-Owned- or Liner-Owned Container.
CoC containers fill the more traditional role of shipping. The company that owns the ships also owns the containers. If you need to send a shipment, you lease a container. Getting the container to you and back to the port is the responsibility of the carrier.
The carrier will send a haulage service to deliver the container to you. You will then load the container and a few hours later, the hauler will return to fetch it to return it to port. The relevant port authorities will ensure that the container gets to the stack before cargo cut-off time, ready for loading onto the ship.
Carrier-owned containers (COC) are containers owned by the carrier or ship liner. The carrier retains legal rights to it and can sell or give it away at any time. You only have use of it for as long as you have an agreement with them, normally on a daily, weekly, or monthly basis, depending on your needs.
The shipping carrier is responsible for all costs involved with maintenance, fuel, etc. You will pay for the physical use of the container, but not ownership. This means that when you are not using it, there is no cost associated with keeping it in place or maintaining its condition.
Insurance of the goods inside your container is your responsibility, so bear in mind that you will need to arrange your own shipping insurance.
There is decidedly less flexibility when using a carrier-owned container.
Deadlines for loading the containers are tight. Ensuring that your container is in port before the stack closes is vital. These and other factors such as delays in returning the container can run into unexpected costs which can heavily impact your business.
Delays with the shipments due to weather or other factors outside of your control happen. The carrier will allow you to move your shipment onto another carrier-owned ship without any penalties for late delivery.
You can hire as many containers as needed without having to purchase them outright. This means you can add or subtract capacity as needed. You won’t be laying out capital for new containers or having to deal with excess inventory that you don’t need.
Lastly, if you hire a CoC to ship goods internationally, you have the option of renting the container in one direction. If you were to own the container, the onus would on you to get it back to you, and shipping an empty container is an extra expense.
The carrier is responsible for the maintenance of the container. Containers leased from carriers will have maintenance performed regularly by professionals. These companies know how to maintain them so they don’t fall apart while in transit across oceans or continents!
The container will have the branding of the carrier. There are no options for businesses to put their own logos etc on the containers they hire.
In most cases, you will want to insure the contents of your container. This is especially true if you are transporting valuable or expensive items in your container. You should check with your insurance provider to determine how much coverage you need.
If you are using a shipper owned container, then you are responsible for insuring both the contents of your container and the container itself against damage or loss.
If you are using a carrier-owned container, you are only responsible for insuring the contents of the container. The carrier will cover the insurance on the container, for damages.
There are different types of containers you can use. The different types of containers you can use for shipping and storing your products are:
These are the ones you’ll most likely see in photographs of cargo ships. They’re large metal boxes with rounded corners, and they come in a variety of sizes. They’re generally used to transport goods overseas because they can be stacked on top of each other, which saves space on the ship and holds a lot more product than you might expect.
Flat rack containers are the same size as classic containers but don’t have rounded corners. They can fit into tighter spaces and aren’t as heavy as classic containers, so they’re ideal for shipping lighter or smaller items across long distances.
Open-side containers also have straight sides and no rounded corners, but they have hinged doors on one or both sides that allow them to be opened up completely so their contents can be accessed easily without having to remove anything from inside.
Open-top containers are similar to open-side containers but have no door at all. Instead, their tops can be lifted off entirely by hand. This makes them even easier to access than open sides. The top can also be left off for transporting logs etc.
Refrigerated containers are used to transport and store products in a temperature-controlled environment. They’re typically used in the food industry, but can also be used for other industries that require a controlled environment.
The main purpose of refrigerated containers is to provide a stable environment for goods being transported. This is achieved by keeping the inside of the container cool, usually at between -18°C and 6°C.
Here are some tips for choosing the right container for your shipping needs:
The size of your container is critical to your shipping costs, so you’ll want to choose the right size for your shipment. You have a lot on your mind already. You don’t need to worry about choosing the wrong size container and having to deal with extra costs or delays.
Shipping lines offer a variety of sizes for shipping containers, including:
This is the most common size used by businesses and consumers and is 20ft long, 8ft wide and 8ft 6in tall.
20ft shipping containers have a volume of 1,150 cubic feet. Each one weighs about 5,070 pounds empty.
20ft shipping containers are popular for domestic shipments within North America because they fit on most trucks and trains.
These larger containers are ideal for shipping bulky items such as machinery or heavy equipment because they have double the volume capacity compared with a standard 20ft container.
A 40ft shipping container has a volume of 2,390 cubic feet and weighs about 8,270 pounds empty.
The larger 40ft units are more practical for international shipments because they can hold more cargo and they’re easier to stack on ships and at ports than smaller containers.
If you’re considering buying new or used containers, visit Filco Shipping Containers. They will help you to decide which container size is right for your shipment.
Since containers of 20 feet are the least expensive, they have become an industry standard for referencing capacity and volume. The term TEU (Twenty-foot Equivalent Unit) is a common reference to a 20-foot measurement used in intermodal transportation.
It’s the standard measurement of a container slot on a ship. So, a single 20ft container will occupy 1 TEU on the ship. If you have a 40ft container, you will need 2 TEUs on the ship.
Calculating the cost of shipping a container is not an easy task. This is because there are many factors that affect the cost of shipping. The size and weight of your shipment, the type of container you prefer, how fast you need to get it to its destination, and where that destination is in the world are all important.
The formula for calculating the cost of shipping a container:
Cost = Volume x Weight x Distance traveled
In order to estimate the cost of shipping a container, you will first need to know how much volume it can hold and what its weight capacity is. You also need to know how far away from your home country this container will travel (and whether or not it will travel through countries with tariffs). Finally, you’ll want to factor in any additional fees associated with the removal and replacement of this container from one port to another before being shipped back home again.
Do this calculation for both SoC and CoC options to help you decide what makes more sense for your business.
If you’re shipping a container by air or sea, there are several factors to consider. First, the destination of your goods will be a big factor.
For example, if you are shipping from Los Angeles to Paris then it would be more cost-effective for your goods to go on a ship than to fly. There are many stops for planes along their route and therefore many costs associated with air freight.
However, if you were shipping from Los Angeles to Seattle, it would probably be more cost-effective for your goods to fly. It would take less time in transit too which means faster fulfillment.
Another factor that determines whether or not air freight or ocean freight should be used is weight. The maximum weight for a single article in the cargo hold of an aeroplane is 350 pounds. Anything single item that weighs more than is going to have to be shipped by sea, road, or rail. This means that ocean freight would be necessary.
This also applies when determining how many items you need to ship. If you’re sending fewer items, then air freight might be cheaper. If many items need shipping, then ocean freight may cost less per unit shipped. Each container holds 10 pallets worth of product within them, to give you some idea of the volume.
Shipper owned containers have more flexibility as they can be repurposed. For example, they can double up as storage units after the goods have been shipped. This makes them an environmentally friendly shipping option. They don’t take up space in landfills and do not create pollution when recycled or reused after their intended purpose has been completed.
The downside is that often you will be bringing an empty cargo back, which is costing you money unnecessarily. You will also be responsible for maintaining the sea-worthiness of any containers that you intend to transport goods in. This can get costly quickly.
Carrier-owned containers offer flexibility in other areas. The number of containers on lease at any time can be changed as needs change. There are no maintenance and repair costs for the Shipper Owned Container, and getting the goods to the dock is part of the package.
Using a CoC also means that you can rent it for a one-way trip. Once it’s unloaded at its destination, it is returned to the carrier and your agreement is concluded. No empty return trip is required!
It’s also important to remember that, if you are buying your own container, you will need to change the markings on the container.
The main ones are the International Maritime Organization (IMO) number and the CSC plate. Both are needed in order to track down your container and find out where it is right now. The IMO number is also used as an identifier for all containers worldwide.
On an SoC, the first 4 letters of the container number should say “NONE”. Also, all logos and names of the previous owner of your container must be removed.
With a CoC, the first 4 letters will represent the country of origin, the company that built the container, and other important information pertaining to that specific container.
Hopefully, this article has given you a clearer picture of the differences between both shipper owned container & carrier owned containers. As you can see, the two are in many ways opposites of each other.
In reality, it is often advantageous for companies to use both types of containers as well, which ends up being called a “hybrid” approach. However, that can be very difficult to sustain depending on the specific needs of your organization and your goals in the international marketplace.
The solution for you depends on your business model. It’s important to go into the decision with eyes wide open so, if you have any questions, we’d be happy to help.
Contact us and fire away!
Onsite Global Logistics is a third party logistics provider 3PL helping companies with innovative global logistics and supply chain solutions
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