Merchant Haulage

What it means

Maersk describes the split this way: under merchant haulage, the company shipping or receiving the goods organizes the inland leg and hires a third-party haulage company to move the container between the port and its inland site. Under carrier haulage, the shipping line arranges that inland leg as part of its service, through its own logistics network.^[1]

U.S. usage often names the same choice by delivery terms. A 2015 Federal Maritime Commission (FMC) staff report on detention and demurrage pairs "store door" with carrier haulage and "CY" (container yard) with merchant haulage. It describes carrier haulage as through carriage in which the ocean carrier is responsible for the drayage from the terminal to the consignee, and merchant haulage as the case in which the shipper must arrange that drayage itself.^[3]

The choice also decides who answers for the inland leg. In Notteboom, Pallis and Rodrigue's port economics reference, a carrier that offers carrier haulage hires a third-party motor carrier for the inland move and stays liable for it, while under merchant haulage the cargo owner picks its own rail or motor carrier, and that carrier is the liable party.^[4]

Merchant haulage vs carrier haulage

Maersk notes that a cargo owner with the scale and resources to negotiate trucking contracts may sometimes save money with merchant haulage, while carrier haulage trades some of that control for convenience.^[1]

Carrier haulage meaning in a carrier's own terms

Carriers publish separate terms for the inland service they sell. Maersk's Terms for Intermodal Carrier Haulage are a useful example of what carrier haulage means contractually:^[2]

• Scope. The service covers inland carriage by one or more inland modes, and can include pre-carriage, on-carriage, terminal handling, storage and equipment positioning.
• Who Maersk is. Maersk acts as an independent contractor and principal carrier, not as the customer's agent, unless it agrees in writing to act only as agent.
• Subcontractors. Maersk may perform the work itself or through subcontractors it engages.
• Truckers you hire. Maersk is not liable for carriers, terminals or service providers retained by the customer or a third party. That is the merchant haulage side of the line.

Other carriers' terms differ, so read the haulage terms that apply to your own booking.

How haulage terms affect demurrage, detention and per diem

The FMC staff report found that the terms of carriage (store door or carrier haulage versus CY or merchant haulage) affect when free time ends, who is charged and how much. It also found little standardization among the six carrier tariffs it reviewed.^[3] Points from that report worth knowing:

• [Demurrage](term:demurrage) on merchant haulage is assessed for the account of the cargo, although the importer's trucker or customs broker may be the one who pays it.^[3]
• Demurrage on imports either way. Whether the move is store door or merchant haulage, the cargo interest is generally responsible for demurrage that builds up while the container sits at the terminal.^[3]
• Line demurrage on carrier haulage. Drayage truckers may be required to pay line demurrage before an import container is released, even on carrier haulage.^[3]
• Per diem. The report quotes per diem as a daily charge assessed to the drayman, or at the carrier's option to the shipper or consignee, for use of the ocean carrier's equipment beyond free time.^[3]

That report is dated April 3, 2015, and carrier tariffs change, so confirm current free time and charges in the carrier's tariff or your contract.

Why it matters

If you book on merchant haulage (CY terms) into New Jersey, you also have to line up a drayage carrier that can pull the container, deliver it, and return the empty before charges start. RapidShips runs no trucks, but its East Brunswick, NJ cross-dock, serving the Port Newark–Elizabeth corridor, receives containers from your drayage carrier for devanning or transloading into 53-ft trailers so the empty can go back quickly.

Example

Illustrative only: an importer receives two containers a month into a New Jersey port and is offered two quotes. On store door (carrier haulage) terms, the ocean carrier arranges the truck to the importer's warehouse and is responsible for that inland leg. On CY (merchant haulage) terms, the ocean freight ends at the terminal, and the importer hires its own drayage company, which picks up the container, delivers it for unloading, and returns the empty. The importer compares the all-in cost of each option, including likely demurrage and detention under each carrier's tariff, and checks whether its own trucker can reliably get appointments at the terminal before choosing merchant haulage.

Common confusions

• Carrier haulage does not mean the carrier's own trucks. The carrier often subcontracts the move to a motor carrier but remains liable for it.^[4]
• Merchant haulage still uses the carrier's container. The trucker hauls the ocean carrier's box, which is why per diem and detention can still apply.^[3]

Frequently asked questions