Consolidating Orders From Several Chinese Factories

You are buying from three factories in three provinces. Each one quotes FOB from a different port. Each one can ship in three weeks. None of them fills a container on its own.

Shipping them separately is the default, and for good reason — it is simple. It is also more expensive than most buyers realise, because the cost of a small shipment is mostly fixed cost.

What a small shipment actually costs

Under LCL (less than container load), you pay for volume, but you also pay a stack of per-shipment charges that do not scale down:

Three separate LCL shipments of 5 CBM each pay those fixed charges three times — roughly USD 1,000–2,000 more than one consolidated 15 CBM shipment, before anyone talks about freight rates. Below about 3 CBM per factory, consolidation is almost always cheaper even after warehousing.

Above a full container, the arithmetic flips: once you have 25 CBM going to one destination, buy the container and stop paying per-shipment charges.

The cost nobody quotes: time

Consolidation works by waiting. The container leaves when the slowest factory has delivered, not when the fastest one has. If one plant slips two weeks, everything slips two weeks.

The mitigation is a cut-off date agreed at the start, with a documented consequence: goods that miss the cut-off ship in the next consolidation, not this one. Without that, the schedule is set by whoever is latest.

For most buyers the trade is worth it. If your product is seasonal or your customer has a hard date, it is not.

Palletising versus floor loading

A standard pallet occupies about 1.2 CBM including the handling gap around it. Floor-loaded cartons use 10–15% more of the container’s volume, and cost more to unload at the other end.

For a 15 CBM LCL shipment the pallet penalty is roughly 1.5 CBM — real money. For cartons that can be floor stacked and hand-unloaded, floor loading is the better trade. For anything heavy, fragile, or going into a racked warehouse, pallets pay for themselves in labour.

The paperwork that trips people up

Export declaration. Each factory’s goods are declared under their own HS code and their own exporter identity. A consolidated shipment is not one declaration; it is several declarations moving under one bill of lading. Make sure whoever consolidates understands this — a single declaration covering goods from three unrelated companies is a problem at the Chinese end.

VAT rebate. Chinese exporters reclaim VAT on export, and the rebate is tied to the factory’s own export declaration and its VAT invoices. If a consolidator declares the goods under its own name instead of the factory’s, the factory loses the rebate and will recover it from you in the price. This is the single most common consolidation mistake, and it is invisible until the next quotation comes in higher.

Certificate of origin. If you need a Form A, a Form E, or a bilateral certificate, each origin declaration has to be consistent with the invoice it covers. Consolidation does not merge origin.

One commercial invoice or several. For customs purposes you can usually present one invoice covering multiple suppliers, but your own accounting and your supplier’s records are cleaner with one invoice per factory, referenced from a single shipment summary.

When not to consolidate

• The goods are on a hard deadline that the slowest factory cannot meet
• One factory’s goods are hazardous or need special handling
• Your destination charges punitive devanning fees for mixed LCL
• The total volume is over about 25 CBM — buy the box

What to ask before you agree

Four questions to whoever is doing the consolidation: whose exporter name goes on each declaration, how the VAT rebate reaches each factory, what the cut-off date is and what happens if it is missed, and whether the destination charges are quoted per shipment or per house bill.

The answers tell you whether you are buying consolidation or buying a queue.

Buying from more than one factory and not sure whether to consolidate? Send us the shipment plan — we will run the numbers on both options.

Related reading

• incoterms for the first order
• rail, air and sea compared
• consolidation and warehousing