Haulage- the logistics terms

Haulage is the commercial activity of transporting goods by road or railway. In essence, it is the movement of a container from one point to another. There are two main haulage categories: carrier and merchant haulage.

Carrier haulage is when a shipping company takes care of the transport of a container while merchant haulage refers to the movement of the container by the consignee using a specified haulage contractor. When a merchant or business decides to transport its goods overland and arranges contracted laborers and transport on its own, it is called merchant haulage. Merchant haulage can be best explained with the following example.

Merchant Haulage Vs. Carrier Haulage

An organization must have a dedicated department to handle merchant haulage. It is easier to control and manage the different aspects of transport since the organization will be handling its cargo through contracted agents. It can also select the right transit schedule for its cargo.

There could be situations where the organization is better equipped to negotiate with transport providers and clearing agents to get better service, rates, and terms. Another scenario is where the goods are of high value or need special handling. In such cases, the merchant would prefer to handle the inland haulage part.

However, since the merchant will be dealing with different companies, administration and paperwork could prove to be complex. Keeping track of the various contracts, their contacts, and ensuring seamless operations between the different companies need a dedicated and professional team.

Clearing and storage have to be planned effectively and accurately as any delay in clearance can result in demurrage, detention, or storage charges. Inordinate delay in the clearance of cargo by the merchant’s agent can even result in the goods being shipped back to their origin at the merchant’s cost!

On the whole, merchant haulage could turn out to be more expensive to the business than letting a shipping carrier handle the end-to-end transport operations.

In carrier haulage, the merchant does not have to worry about transport, clearance, and other factors thereby making it easier to focus on their core business interests.

The main carrier will be responsible for the goods from their origin to the destination. Loading, unloading, and coordination of all other related activities are managed by the carrier and its agents. It might also work out cheaper due to economies of scale enjoyed by the shipping carrier.

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