What's SOC Container? Explained advantage and disadvantage.

Summary

This video explains the differences between SOC (Shipper's Own Container) and COC (Carrier's Own Container) in international logistics. It highlights the pros and cons of each container type, with COC containers offering advantages like reduced transportation costs in certain situations but also carrying risks of increased costs and detention charges. SOC containers, on the other hand, allow shippers to manage their own containers, offering more control and avoiding detention fees, though they require initial investment and ongoing management. The video serves as an informative guide for shippers in understanding container ownership and management.

Takeaways

• 😀 COC (Carrier's Own Container) is owned and managed by shipping lines, while SOC (Shipper's Own Container) is owned and managed by freight forwarders or shippers.
• 😀 COC containers are used by general shippers and are included in the transportation cost, while SOC containers require the shipper to purchase and manage them.
• 😀 One of the main advantages of COC containers is that the shipper does not have to manage empty containers or worry about storage after unloading.
• 😀 The transportation cost of COC containers can fluctuate based on container supply and demand. Overflow containers may reduce costs, while shortages can increase them.
• 😀 Detention charges may apply for COC containers if they are not returned on time, adding to the overall cost.
• 😀 SOC containers offer the benefit of avoiding poor-quality containers, as the shipper manages their own equipment and ensures its condition.
• 😀 Using SOC containers allows shippers to store and move cargo without unloading it from the container, making handling more efficient.
• 😀 A major disadvantage of SOC containers is the high initial investment required to purchase the containers, impacting the shipper's cash flow.
• 😀 SOC containers also involve management costs such as storage, maintenance, and labor, which can be time-consuming and expensive.
• 😀 In the case of container shortages, some shippers may consider using SOC containers, but the availability of vessel space is also a critical factor in shipping logistics.
• 😀 Shippers need to weigh the advantages of cost savings and control with SOC containers against the upfront costs and management responsibilities.

Q & A

What is the main difference between SOC containers and COC containers?

SOC containers are owned and managed by freight forwarders or shippers, while COC containers are owned and managed by shipping lines.

What are the advantages of using COC containers?

The advantages of COC containers include not having to manage empty containers and potential reductions in transport costs when there is an overflow of containers.

What are the disadvantages of using COC containers?

The disadvantages of COC containers include increased transportation costs when the container numbers are unbalanced and possible detention charges due to late returns of the containers.

What are the advantages of using SOC containers?

The advantages of SOC containers include the ability to move and store cargo without unloading it from the container, and the ability to prevent cargo accidents by ensuring good container quality.

What are the disadvantages of using SOC containers?

The disadvantages of SOC containers include the initial investment required to purchase them and the ongoing costs and time commitment for managing and maintaining the containers.

How does container supply and demand affect transportation costs for COC containers?

Transportation costs for COC containers can decrease when there is an overflow of containers at certain locations due to a supply-demand imbalance, but they can also increase when there is a shortage of containers.

What is a key advantage of using SOC containers compared to COC containers?

A key advantage of using SOC containers is that shippers can manage and maintain their containers themselves, ensuring they are in good condition, unlike COC containers where the condition is often unknown.

Why is there no advantage to using SOC containers in normal situations?

In normal situations, SOC containers are not preferable because they require significant initial investment and ongoing management costs, whereas COC containers are more cost-effective without the need for maintenance or storage of empty containers.

What impact does container ownership have on the cash flow of a business?

Owning SOC containers requires a large initial investment, which can tie up funds and impact cash flow. Additionally, there are ongoing costs associated with container management and maintenance.

What are the possible outcomes if the supply and demand balance for containers is disrupted?

If there is an imbalance in container supply and demand, transportation costs could either rise significantly due to container shortages or decrease when there is an overflow of containers.