Co-loader

What it means

The Federal Maritime Commission (FMC) defines co-loading in its tariff rules as the combining of cargo by two or more NVOCCs for tendering to an ocean common carrier under the name of one or more of those NVOCCs.^[1] The regulation does not use the word "co-loader." It describes the two sides as the tendering NVOCC (the one handing over cargo) and the receiving NVOCC (the one accepting it).^[2] In everyday trade use, either party may be called the co-loader, so it is worth asking which role a company is playing on a given shipment.

Co-loading works because of how an NVOCC is defined. Under 46 CFR 515.2, an NVOCC is a common carrier that does not operate the vessels that carry the cargo and is a shipper in its relationship with an ocean common carrier.^[3] The FMC's definition of "shipper" also includes an NVOCC that accepts responsibility for paying all charges under the tariff or service contract.^[1] That is how one NVOCC can act as the shipper toward another.

Two co-loading relationships the FMC recognizes

46 CFR 520.11(c) requires NVOCCs to address co-loading in their tariffs and sorts the arrangements into two types.^[2]

The distinction matters for money and paperwork. In the shipper-to-carrier version, the tendering NVOCC is the receiving NVOCC's customer and its tariff has to say who pays the freight. In the carrier-to-carrier version, the NVOCCs act as partners, and the rule limits that version to LCL cargo.^[2]

The bill of lading annotation rule

Any NVOCC that tenders cargo to another NVOCC for co-loading, under either relationship, must annotate each applicable bill of lading with the identity of every other NVOCC the shipment was tendered to. The note has to appear on the face of the bill and be clear and legible.^[2] The current wording of this paragraph dates from an FMC rule published at 89 FR 32 on January 2, 2024.^[2]

For a cargo owner, that annotation is the quickest way to see that a co-loader is involved. If the house bill from your forwarder names a second NVOCC, your goods are moving inside that second company's consolidation, and arrival notices, release and pickup at destination may run through it.

Co-loading in LCL

Most co-loading people search for involves LCL freight. A typical flow looks like this:

1. The cargo owner books an LCL shipment with its forwarder or NVOCC and receives that company's bill of lading.
2. That NVOCC has too little freight to the destination to fill a container, so it tenders the shipment to a receiving NVOCC that runs a consolidation on the lane.
3. The receiving NVOCC combines it with freight from other shippers and other NVOCCs and books the container with the ocean carrier under its own name.^[1]
4. The tendering NVOCC notes the receiving NVOCC's identity on the face of its bill of lading.^[2]
5. At destination the container is unloaded at a container freight station or warehouse, and each shipment is released to its own consignee.

Steps 1, 2 and 5 describe common practice, not federal requirements. Whether the arrangement is carrier-to-carrier or shipper-to-carrier depends on the NVOCCs' agreement and tariffs.^[2]

Why it matters

Co-loading adds a company to the chain. When an LCL shipment is late, held or short, the party that can locate it may be the receiving NVOCC, not the forwarder you booked with, so check the bill of lading annotation first. If your co-loaded freight needs to come out of a container and be cross-docked or repalletized in New Jersey, RapidShips devans containers at its East Brunswick warehouse, serving the Port Newark–Elizabeth corridor.

Example

Illustrative only: a small forwarder in New Jersey has four pallets of export cargo for one overseas port, far too little to justify its own container. It tenders the pallets to a larger NVOCC that runs a weekly LCL consolidation to that port. The larger NVOCC issues a bill of lading to the forwarder, so a shipper-to-carrier relationship is presumed, and the forwarder's tariff describes its co-loading practice and says it is responsible for the freight charges. On the house bill it issues to its own customer, the forwarder names the larger NVOCC on the face of the bill. The larger NVOCC then books the full container with the ocean carrier in its own name.

Common confusions

• Co-loading vs. consolidation. Freight consolidation is any combining of smaller shipments into one load. Co-loading is the narrower case where two or more NVOCCs combine cargo for one ocean carrier booking.^[1]
• Co-loading is not only LCL. The carrier-to-carrier form is limited to LCL, but the shipper-to-carrier form can cover full container loads too.^[2]
• Co-loader vs. ocean carrier. A co-loader does not operate the vessel. Both NVOCCs are intermediaries, and the vessel operator is a separate ocean common carrier.^[3]

Frequently asked questions