Businesses and the global economy need a continuous movement of goods from one place to another. Haulage is the term used to transport goods from one place to another by rail, sea, or trucks. It is a crucial part of logistics, handling the loading, unloading, managing logistics, and adhering to safety regulations. Two primary methods for transporting freight containers from one place to another are merchant haulage and carrier haulage, which have their features and implications. 

This comprehensive blog will discuss these two methods, merchant haulage and carrier haulage, and highlight their differences to choose the best one to enhance their shipping processes. 

What is merchant haulage? 

Merchant haulage is a method of transporting shipping containers from one point to another directly by the consignee with the help of a nominated haulage contractor. Here, the shipper is responsible for transporting goods from one place to another. This implies they must manage the inland transportation, covering trucking and rail services. This case allows the consignee to negotiate its rates. Here, the shipping line does not have to bear the liability for any damages, while they can hold the merchant liable for any mishap or damage. It palys a significant role in logistics as: 

• It is suitable for businesses leveraging third-party logistics providers to transport goods from one place to another. 
• Forwarding the customers can help them manage the pre- and on-carriage in their own prescribed way and achieve cost benefits. 
• Here, the shipper or merchant has more control over the logistics, such as selecting the logistics and haulage providers, scheduling the transportation, and negotiating rates for different types of inland transportation.
• They offer great flexibility in customizing their logistics solutions to meet their specific needs, such as speed, cost efficiency, and specialized handling needs. 

What is carrier haulage? 

Carrier haulage is a method for inland container transport, also called line haulage, which is a contract-based service consisting of a shipping line responsible for management. Here, the consignee only has to pay for the shipping lines that will handle the transportation. The inland shipping companies that accept the carrier haulage have to accept that they would handle claims and liabilities unless the damage is caused by improper packaging. Teh carrier will use its logistics network to move the container from the port to the inland shipping target. Let’s explore its role in logistics using the following points: 

• It streamlines the logistics cycle by providing a single point of contact to the shippers. 
• This reduces the risks of handling the damages for the shippers, as all the responsibility lies with the carrier. 
• The carrier must handle inland transport logistics from one container depot to another. 

Advantages of merchant haulage and carrier haulage

Both haulages offer several benefits to the stakeholders, including the shipping and logistics industry. Let’s briefly explore the advantages of merchant haulage and carrier haulage. 

First, the advantages of merchant haulage are: 

Responsibility for damage: The responsibility lies in the hands of shipping lines, which are held responsible for delays caused by drivers or logistics challenges. 

Cost liabilities: You can directly hold the shipper responsible for the damage. They must pay fines or repair expenses unless covered by an independent hauler’s cargo insurance. 

Usage during busy periods: Merchant haulage can prove very beneficial during peak periods such as Christmas, bank holidays, and when shipping companies face driver shortages. 

Facilitates affordable long distances: These methods facilitate affordable long-distance freight transportation across borders, as shippers are one of the stakeholders in shipping. 

The advantages of carrier haulage are: 

1. Agility: Carriers, the sole logistics managers, can easily change logistics operations. They can adjust the logistics capacity based on seasonal considerations and column fluctuations. 
2. Intermodal accessibility: Depending on local service availability, carriers can use different vehicles that offer accessibility for intermodal transportation for international freight shipping. 
3. Shipping service integration: Carrier haulage better integrates shipping services and inland waterways logistics, leading to more organized logistics.

Disadvantages of merchant haulage and carrier haulage

Merchant haulage and carrier haulage, along with certain advantages, offer various disadvantages you must know to find reliable solutions. 

Disadvantages of merchant haulage are: 

Increased responsibility: The Shipper must manage all the responsibilities for inland container transportation and bear the expense of delays, cargo damage, and container mishaps. 

Handover fees: The shippers must bear the handover fees, i.e., Lo/Lo fees for taking the container off the vessels, which adds to the overall inland transportation costs. 

Limited assistance: Shippers get limited support as only shippers are responsible for damages, accidents, or supply chain disruptions. 

Disadvantages of carrier haulage: 

1. Less agility: In carrier haulage, the companies have less authority over the choice of inland road transport providers and trade routes. 
2. Dependency on carrier performances: Shippers depend on the carrier performance for the on-time delivery of goods from one place to another. 
3. Limited customization: Carrier haulage did not facilitate the same level of customization as merchant haulage for inland freight transport, which is disadvantageous for the specific handling. 

What is the difference between merchant haulage and carrier haulage? 

Merchant haulage and carrier haulage are two different methods of carrying inland world transportation and container logistics. As a shipper, freight forwarder, or logistics provider, you must know the difference between them. Let’s delve into the differences between them in brief points: 

Which haulage to choose?

Both carrier and merchant haulage offer advantages and disadvantages, but you must choose the right one for your logistics and inland shipping needs. Merchant haulage, however, is considered more expensive, while carrier haulage is considered less reliable than merchant ones. Let’s discuss some key factors that you must consider while choosing between merchant haulage and carrier haulage for your shipment needs: 

1. Budget consideration: You must align your budget with merchant or carrier haulage. Merchant haulage gives shippers the power to select any provider for their shipments. Meanwhile, carrier haulage gives the carrier the authority to choose often pre-decided providers to carry inland freight. Therefore, merchant haulage is somehow more cost-effective, as I consider all the expenses before implementation.
2. Reliability: Carrier haulage is considered less reliable because of the hiring of a third party to manage the logistics. While merchant haulage indeed requires internal resources and is quite expensive, it offers reliable water inland transport services as authority lies in the hands of shippers. 
3. Complexity: In carrier haulage, due to the involvement of third-party logistics providers, you have to go through complex documentation to deal with legal compliance. On the other hand, the merchant haulage is less complex as you have to go through the standard legal documentation. 

Merchant haulage and carrier haulage are two major constituents of logistics that help transport freight and storage containers from one place to another. Understanding the benefits, disadvantages, and their role in logistics will help you decide which haulage to choose. Analyze the characteristics of both haulages, align them with the current needs and expectations, and select the perfect one for your shipments.  

LOTUS Containers offers services for managing your port logistics. We have more than 300 reliable container ports in partnership that can help you manage your logistics, which covers loading, unloading, and warehousing operations.