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What is a container freight station (CFS) and its role in shipping?

CFS refers to a warehouse where cargo is consolidated before being exported or imported. Learn more about its role, importance, and process in the blog.

With the rapid rise of e-commerce exports, the need to store multiple containers and manage inventory efficiently has become crucial for meeting global demand.¹ Container freight stations (CFS) play a critical role in this process, acting as key hubs where goods are consolidated, stored, and prepared for international shipping. For businesses navigating e-commerce exports, understanding the role of CFS in the logistics supply chain is crucial. This blog post delves into the meaning of CFS, its role in shipping, and its advantages, importance, and associated charges.

What is a container freight station (CFS)?

A container freight station (CFS) is a warehouse that specializes in the consolidation and de-consolidation of cargo before it is shipped into or outside the country. Usually, private companies or ports operate container freight facilities.²

Importance of container freight station (CFS)

CFS has become a crucial aspect of the transportation industry. It has simplified the import-export process at both the origin and destination countries. With the need for LCL (less than container load) shipments rising globally, CFS has become a crucial aspect of international trade logistics.³

Role of container freight stations

The following are some trade and transport activities that can be performed at a CFS:

• Receipt and consolidation of cargo for LCL shipments.
• Disassemble shipping containers at the final destination and send out shipments.
• Load, pack and unpack shipping containers.
• Identify and label containers for easy tracking.
• Manage cargo, both empty and loaded containers, during transit.
• Transport empty and loaded containers between container yards (CY) and the port/terminal.
• Prepare and count containers for shipment, involving stacking, sorting, tracking, and tallying.
• Maintain and repair containers.
• Deliver transportation services between terminals and ports via road or rail.
• Store goods safely until they can be picked up or delivered.
• Handle unorganized, non-containerized cargo (break bulk) and rail traffic to and from the port or terminal's surrounding area.

Types of container freight stations

There are two types of container freight stations:

1. Origin CFS:

This is the CFS located in the country where the goods originate. This is where the freight is consolidated before being shipped to the final destination.

2. Destination CFS:

This is the CFS in the destination country. Here, the freight is de-consolidated so that every individual shipment can be delivered to the buyer or customer. ⁴

How does a container freight station work?

The following are the ways in which container freight stations streamline trade processes:

1. Import process at CFS

An Import General Manifest (IGM) is submitted at the port when the container arrives. The IGM includes information on the shipment, shipper, and recipient. The shipping container is then delivered to the receiving CFS. Cargo is unloaded by CFS and sent for cargo clearance. A bill of entry may be submitted by the cargo owner or their clearing agent. Once the shipment has been cleared and appropriate duties have been paid, it is sent to customs authorities. With an ‘out of charge’ instruction, customs issues a bill of entry. The CFS steward issues a gate pass to the importer and ships it. Because it is an extension of the port, the container freight station helps to ease traffic and streamline operations.

2. Export process at CFS

The exporter delivers the shipment and shipping bill to CFS. Goods are unloaded, and CFS custodian records the receipt of goods. Products are subjected to customs clearance procedures initiated by the authorities. After all the paperwork is filed and customs office issues a bill of lading that reads ‘allow export order’, the process is complete. CFS now starts packing containers with goods. Each package is labelled and sealed.

Best practices to improve CFS use

The pace and efficiency of your freight transportation operation can be improved through better utilization of CFS and a well-organized back office. Some of the best practices to benefit from CFS are:

• Be aware of the local climate at each station. Rainy conditions at the container freight station compromise safety and disrupt operations.
• Think about the total amount of goods entering and leaving through each port, which can impact delivery and departure of goods.
• Gain complete insight into container arrival timelines. Being prepared for container arrivals and departures can ease congestion at ports.
• Keep in mind the value of human labor when stacking or separating containers. Know how much time and money it will take to consolidate or deconsolidate.
• Set up automated warnings to ensure driver punctuality by tracking cargo arrivals and departures.
• Communicate changes to delivery schedules immediately to all parties involved, including the end customer.
• Opt for pre-clearance to save time and money and eliminate border delays.

How does CFS shipping benefit export businesses?

The following are some benefits of using CFS for supply chain management in e-commerce exports:

1. Improves supply chain efficiency:

CFS improves supply chain efficiency and is particularly useful for companies which export goods that need short-term storage before they can be deconsolidated, repackaged, and delivered to the final consignee.

2. Increases movement of air freight shipments:

CFS is ideal for time-sensitive air freight shipments, facilitating quick movement from the airport and ensuring timely delivery to various destinations within hours to days, depending on the goods and destination.

3. Saves costs:

CFS warehouses are excellent for export businesses that don’t have volume for full container load (FCL) shipments, as they offer dedicated consolidation services, resulting in significant cost savings.

4. Improves security:

CFS warehouses provide an extra layer of security, thus reducing the risk of damage or theft as goods are transported directly from the airport/port to the secure CFS warehouse.

5. Maintains shipment data:

CFS facility records and keeps all vital information about a particular shipment. These include truck numbers, carrier names, origin and destination points, cargo details and exporter names.

6. Saves time:

CFS reduces port congestion and speeds up the transportation and shipment process. ⁵

What does a CFS charge?

A CFS fee is the amount that a CFS charges for loading, unloading, and packaging services at a warehouse. Typically, CFS fees are calculated on the basis of the weight or the volume of the shipment. Other factors that influence costs include the type of facility, location, duration of storage, weight and size of cargo, and any other extra value-added services required.⁶

Example of CFS shipping

A CFS warehouse acts as a go-between storage facility for multiple exporters and shipments. It consolidates or deconsolidates shipments based on origin and destination. For instance, if there are four LCL shipments from four different customers headed to Malaysia, then the CFS will pack them all into a single container and ship it, thus saving costs and logistical issues for everyone.

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More blogs on incoterms

1. What is Delivered at Terminal (DAT) incoterm?

2. What is a Cost and Freight (CFR) incoterm?

3. All you need to know about Free Alongside Ship (FAS) incoterm 2020

4. Guide to FCL shipping: Everything exporters need to know

5. What is Carriage Insurance Paid (CIP) in incoterms?

6. What is Freight on Board: How does it work in shipping?

7. What are incoterms in exports: Here’s everything you need to know

8. What is Cost, Insurance and Freight (CIF) in shipping?

9. What is a Free Carrier (FCA) incoterm?

10. What is EX Works (EXW) incoterm in international trade?

Frequently Asked Questions

What is the difference between CFS and CFS shipping?

CFS refers to the facility where cargo is consolidated and prepared for shipping, while CFS shipping involves the transportation of goods from a CFS to the final destination. Essentially, CFS is the location, and CFS shipping is the process.

What is the difference between CFS and Container Yard?

While a container yard is reserved exclusively for FCL containers, a CFS handles both LCL and FCL cargo.

Can I use CFR shipping terms for domestic shipping?

CFR (Cost and Freight) terms are typically used for international shipping, especially for sea and ocean transport. Exporters who want to use CFR for domestic shipments should exercise caution as the terms are designed to suit international trade.

What does a CFS do?

A CFS stores goods between the exporter’s location and the final destination and speeds up the shipment process by identifying and prioritizing shipments.

Published on December 29, 2022.

Sources:
1. https://www.marineinsight.com/maritime-law/understanding-container-freight-stations-purpose-location-and-types/
2. https://www.cogoport.com/en-IN/blogs/container-freight-station-meaning-functions-and-role-in-import-export
3. https://www.container-xchange.com/blog/cfs-shipping/
4. https://customscity.com/what-is-a-cfs-container-freight-station/
5. https://customscity.com/what-is-a-cfs-container-freight-station/
6. https://www.thebrimichgroup.com/what-are-cfs-charges-at-customs/

What is a Container Freight Station (CFS) and its role in shipping?