Ever troubled by choosing between SOC container and COC container? Need not worry, we’ve got you covered.
The Shipping Industry is claimed to be one of the major players on the global platform in terms of trading goods and services. The containers, which are claimed to be one of the most essential and useful inventions of the era, the modern shipping industry has been able to leap the conventional ways of shipping. These have thereby proven to be quintessential assets for the booming of the freight business.
In the past few months, due to the prevalent pandemic the container shipping industry has witnessed a crisis of containers for trade. This imbalance has raised concerns and further led to the realization of the importance of containers for the seamless flow of the global demand and supply chain. To cater to both the demand and supply side, many companies are observed holding on to containers and moving empty containers.
Analysts say there are millions of containers in service which aid in maintaining the flow of goods globally. But are they all owned by the shipping lines and port services?
Well, before we proceed any further, we should know that the containers are broadly classified into the following types based on the regulatory rules:
- Shipper Owned Container
- Carrier Owned Container
Now, it becomes imperative to know the difference between a Shipper Owned Container and a Carrier Owned Container. As the name itself suggests, a SOC is a container that is owned by the shippers which may be a consignee or the supplier and a COC is a container owned by a carrier which may be the shipping line or container leasing companies.
A carrier may be:
- VOCC- Vessel Operating Common Carrier
- NVOCC- Non- Vessel Operating Common Carrier
Now, a very preliminary question arises why one kind of container should be opted for in lieu of the other. What edge does a shipper owned container serve over a carrier owned container and vice-versa?
As we all know, choices are subject to individual needs. So, the act of choosing a particular kind of container solely depends upon the type of cargo to be transported, the distance to be covered by the freight and the charges to be paid at the end of delivery.
Shipper Owned Containers
Shipper owned container is owned by a consignee or supplier. Once owned, the owner pays the carrier to move the shipment only when goods are to be imported, except that no charge is incurred. For prolonged use of containers, charges such as detention or demurrage or per diem charges are not incurred. Once the goods are certified that they are cargo/seaworthy, they are used for importing goods. They can also be used to store goods over land. SOCs are quite flexible, they are utilized when and where, as per the requirements of the shippers. If a shipper buys a container from a carrier, the decals of the original container especially the container number are expected to be replaced since that is no more the same container.
Benefits of a SOC
- SOC containers are a good source to help speed up the supply of goods across nations, without delaying the shipments till the containers are returned before goods are offloaded and unloaded.
- SOC helps in avoiding unexpected demurrage and detention costs as they may escalate to hundreds of dollars if the loading time, customs clearance, drayage, port congestion, etc. are not taken into account earlier.
- One can source their own cargo as per the requirement especially in remote areas away from hinterlands where the containers are either unavailable or are available at much higher rates.
- One can also specifically opt for the containers to buy or lease according to their needs or for how long according to the current needs.
Carrier Owned Containers
It is owned by a Carrier or a Shipping line. Here, some charges have to be paid especially the demurrage and the detention charges. They are mainly used for the import and export of cargo but can also be used for the storage of goods. They fall under the responsibility of carriers as they decide on the container availability once the payment has been made.
Benefits of a COC
- COCs are generally utilized for standard shipments on routes with a lot of cargo flow. There is nearly no incentive for using your own container if the carrier has availability of ample boxes. And if the end-to-end move has been fairly paid for at the same time, so it becomes economical to use a COC then.
- Once they are returned, there’s no concern about the containers as it’s not the shipper’s responsibility.
- It’s much simpler to use a COC container, one just has to pay an “all in” freight payment to the carrier to move their goods.
- COCs allow for higher freight rate discounts especially in shipments that originate in high “surplus areas” as the shippers help the carriers save some money by utilizing their COC to export cargo.
Although there is a marginal edge of both types of containers over each other, these containers are important assets that have helped in generating tremendous revenue for the shipping industry. The containers go through several steps between the point of loading and the point of destination. Each of these interactions results in making the process complex and adding up costs while the goods are in transit. But one should always seek ways profitable to them and fulfilling their needs.
LOTUS Containers offers a myriad of options to select the right types of container you need to flourish in your export-import business without suffering unwanted charges. Suiting to your requirements and needs, we are here to sell, lease, or buy shipping containers of all types. We respect our customer’s choices and help them receive world-class services as we at LOTUS Containers believe- A happy customer is our priority.
Hope this article was able to clear all your queries and help you readily make your decision. For any further queries or help, contact us at LOTUS Containers. Trust us and the world is your oyster!