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EXPORT TRADING COMPANY AFFAIRS (ETCA)

The Export Trade Certificate of Review Program - The Competitive Edge for U.S. Exporters

Shipping & Title III

Shipping costs can be one of the prime impediments preventing firms from expanding into new export markets.  However, shipping costs are also a prime area where a cost savings can be realized through joint export activities.  One way firms have taken advatage of Title III protection has been to obtain certification for the activities of a shippers' association.  By partcipating in a shippers' association small and medium-sized firms can realize the lower transportation costs that are available to larger volume shippers.

Shippers’ associations are  membership cooperatives which make arrangements for the movement of members’ cargo.  They are a means by which the small and medium sized shipper, and even the large shipper, can obtain economies of scale without the markups charged by other transportation intermediaries who perform consolidation services in order to obtain volume discounts. Shippers’ associations allow multiple shippers to pool their volumes in order to increase shipment volumes.  The larger shipment volume enables the shippers’ association to negotiate volume discounts or service contracts with ocean carriers on behalf of its members. 

Larger shippers’ associations are able to reduce the amount of cargo that is transshipped to less frequented destinations.  This reduction in transshipment can result in lower costs and less damage, as well as faster transit times.  In addition, shippers' associations can negotiate for improved terms of service.  This is important when trying to secure space and equipment for busy trade lanes, where ensuring better service can be difficult.  Also, shippers' associations, which are able to provide volume movements in multiple trade lanes, as well as movements in both directions of the same trade lane, will achieve lower rate discounts and better service.  Some associations offer consolidation or "consignment of cargo which is insufficient to fill a shipping container", also known as LCL or LTL, "less than container load."  LCL is a useful service for smaller shippers unable to fill an ocean shipping container with their cargo.

For more information about Title III and shipping see Shipping Security, by Chris Gillis, American Shipper, March 2000.

To see a sample Certificate held received by a shipper's association Click Here



Last Updated: 7/29/13 8:31 PM