Typically, cargo transport involves sending goods either as a Full Container Load (FCL) or as Less-than Container Load (LCL). It is not necessary that when you have an LCL shipment for sending to your customer that you hire or lease a full container to send it to them. This is where the term Groupage comes in.
As the name suggests, it is a group of LCL cargo from different shippers or consignors that are consolidated and sent to various customers or consignees as a full container load in a single freight container. This method of transporting multiple LCL shipments also goes by the name of Cargo Consolidation or Groupage Operation.
In other words, in groupage shipping, each freight container will carry several different LCL cargo shipments originating from one port to be delivered to another common port or separate ports.
Depending on the volume of cargo to be transported, the groupage operator will book a container with the shipping line. This can be a 20’ or a 40’ container.
Once the loading of cargo is completed, the operator will issue a House Bills of Lading (HBL) to all the customers shipping goods by the container. The groupage operator will then collect the Master Bill of Lading from the shipping line.
Each LCL shipment will have a separate Bill of Lading (BL) that shows its consignor and the consignee. Upon arrival at the destination port, these LCL cargoes are unloaded from the vessel and each of them is cleared and taken custody of by the respective consignees.
Who is a Groupage Operator?
An agent who arranges pick-up less-than-container loads cargo from the seller and delivers it to the buyer by transporting it in a groupage or consolidation container is called a groupage operator or a cargo consolidator.
He may collect cargo from several shippers for delivery to their different customers or he may collect LCL cargo from several organizations for consolidation and delivery to a single customer.
Non-Vessel Operating Common Carrier (NVOCC)
NVOCC are prime examples of groupage operators. Though most of them deal directly with freight forwarders, some of them offer cargo space to individual customers for transporting their goods by a cargo vessel.
NVOCCs normally do not own cargo vessels or warehouses. The cargo space or container is leased from a shipping line and mostly, the loading is done from the customer’s warehouse. When required, warehouse space is leased from warehouse operators.