De Well provides consolidation services throughout China through our network of owned and leased warehouses. Our experience at managing warehouses and consolidation activities provides flexibility to our customers as they seek to improve the management of their orders and utilization of their containers.
Upon receipt of cargo into one of our warehouses, a location is designated where that product will be stored. When stuffing the container, the load plan is compared against the po #, quantity and marks to ensure the cargo is loaded into the appropriate container. We actively manage three types of consolidation activities for our clients which are outlined below.
Buyers Consolidation: CFS-CY
Buyers Consolidation activity is generally carried out on behalf of the consignee whereby they have many factories their buyers are placing orders to in small quantities that would better be consolidated into a single container routed to a single destination. These orders are consolidated at origin and destined to one or many of the customer’s distribution centers. Buyers Consolidation is used to eliminate or minimize LCL shipments and maximize container utilization thereby decreasing cost per CBM or item.
Buyers Consolidation is generally performed when the terms are FOB port and the vendor’s quantities are too small to make a full container. In these cases, the vendor pays the CFS receiving charge. The consignee receives a full container and ideally has a better utilization as well as a container rate rather than LCL rate which is much higher.
LCL Consol Boxes: CFS-CFS
De Well operates our own Consolidation containers. This is simply to say, we load containers full of multiple vendor and multiple consignee shipments (CFS-CFS) and provide a service and cost competitive service to our customers. This service is more expensive than the Buyer’s Consolidation service however, it is cost competitive for those companies whose orders are not enough to supply a full container. This service is also used for clients who use our Buyers Consolidation service but have larger overflow orders that cannot wait until the next container is consolidated.
A Milk Run is simply a consolidation outside the warehouse. In cases where the consignee has terms of FCA, a milk run is an opportune way to consolidate multiple vendors orders without incurring the expense of the CFS receiving charges upon receipt at the warehouse. In the case of a Milk Run, we recommend mapping factory locations in advance. Not every factory is within a tight circle of factories and therefore economically feasible to be a part of the Milk Run activity. In the cases where factories are located outside the main location of factories (within a certain radius), they simply deliver their orders to a warehouse and it can be picked up by the Milk Run container on the way to the terminal as a top off load. The key components of setting up a Milk Run is as follows: