Factoring Companies Guidebook
Groupage
Definition
This refers to services provided by haulage companies to a number of suppliers with insufficient goods to fill a whole container, wagon etc.
See also: - "Warehousing and Storage"
Concerns
The goods involved may be consolidated, causing problems with identification and delivery of the right goods and quantities to the final customer. There may be delays while the goods are warehoused awaiting the container to be filled by other customers. The deliveries may be time critical and invoices will not be paid if the terms of order are not fulfilled. If the goods remain on the company's premises pending the filling of a container and delivery, there may be extra charges for storage or warehousing the goods. The length of time and any such costs may be outside the control of the customer and may inhibit unwillingness to pay.
Arrangements to fill the containers may be through shipping agents. We need to be sure who the debtor is and who is liable for payment, the Agent or the owner of the goods.
There will be multiple consignment documents/bills of lading to cover one container and proof of delivery, in event of a claim, may not be easily identifiable.
The transport of goods by containers invariably involves transportation overseas. The haulage arrangements and the hauliers responsibilities may cease at the point of embarkation with delivery to final destination being outside their control. We need to ensure that the debtor cannot withhold payment or attempt to offset if the goods do not reach the final destination or within agreed time scales.
Identification
Undertake enquiries of the Client as to whether they provide such facilities. Investigate the terms of any arrangements; the company's ability to invoice for storage or warehousing and its potential liability for any claims for non-delivery or damages to the goods while in transit.
Industries where Groupage occurs :
- Transport
- Haulage
