Understanding LCL Freight Shipments

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Shipping cargo by sea has an intricate set of challenges that needs to be understood in order to be both successful and profitable. Along with what your company is shipping and to where the volume of cargo you’re sending out raises its own set of challenges that need to be dealt with.

In particular, there is a question whether to use FCL (full container load) or LCL (less-than-container load) and which is best for your operations. Shipping a full container is easier in some aspects as it will require fewer stops, making it easier to keep track of cargo during transit. 

But what happens when you don’t have enough freight to fill a container? One option is to simply wait until you do, but if you have a delivery schedule to keep, then LCL shipments might be your only option. 

What Is LCL Shipping?

As we mentioned above, LCL stands for less-than-container load, which is when there isn’t enough cargo to fill an entire shipping container. In this case, the load will be consolidated into a shared container with LCLs from other shipping companies.

The LCL process occurs in different phases which are as follows

Phase  1
Shippers who do not have enough cargo to utilize an FCL will use an LCL consolidator to ship their cargo. Each consolidator has a hub port which they use to consolidate and deconsolidate cargo for that region. For example, Hamburg could be a hub for North West Continent ports. Depending on the final destination of the cargo, the consolidator will consolidate all cargo from a particular POL to Hamburg for deconsolidation and distribution. The shipper will provide the shipping dimensions, weight, and the number of pieces to the consolidator. Once all the necessary forms are in order, the consignment can be booked. 

Phase 2
Goods must be prepared for shipping. Because the shipping container will be shared, each shipper’s cargo must be properly packed beforehand to keep it separate from other shipments as well as protect the goods during transit. Once the cargo is prepped and packed properly, the cargo is then ready for the next step. 

Phase 3
Packed and prepped, cargo is ready for consolidation which usually takes place at the departure port. The goods must arrive at the Container Freight Station (CFS) for consolidation before the cargo cutoff date. The freight must arrive with enough time to spare to give the consolidators enough time to load it into specific containers.

Once all cargo is consolidated by the consolidator, it becomes an FCL for them and the full container is moved to the POL for export. 
Once the full container arrives at the hub, it is then unpacked and moved to the final destination either as a final mile delivery using a truck to the customer’s or further consolidated at the hub for further movement.
When the goods are received, the recipient will usually need to sign for them, acknowledging that the item has been received which completes the shipment process. 

How Does LCL Compare to FCL?

FCLs can simplify the process of shipping ocean freight, but it’s not always the best option for shippers with lower volumes. Here are some of the key differences to note between LCL and FCL shipments. 

  • Shipping time: FCL shipments tend to be completed quickly as there are fewer intermediary stops during travel. Assuming, of course, that all else is equal such as cargo availability at the time of loading for LCL and FCL. 
  • Load Size: FCL shipping is typically reserved for larger loads that fit into a dedicated container of their own, usually ranging from seven to 20 pallets. LCL options are best when shipping loads consisting of one to six pallets. 
  • Cost: The larger the volume, the more cost-effective it is to ship FCL. This is due to a fixed cost on FCL shipments, which diminishes with each additional pallet. Conversely, while LCL shipments take longer to be delivered, the cost per pallet is decidedly less when shipping lower volumes. 

When Is LCL the Better Option?

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If your shipping volume fluctuates, then knowing when to choose LCL versus FCL can be a constant challenge. As each has its advantages, it’s important to understand when each option is the best choice for your organization. 

LCL shipping is the best option for you in the following cases:

  • Choose LCL when shipping a small consignment, as LCL rates are based on weight and volume. As a general rule, if your shipment is under 13 cubic meters, you’re better off shipping LCL. This however, depends on the route that the cargo will take.
  • Choose LCL when you need to make a last-minute shipment. You’ll often find available space that needs to be filled when a shipment is due for departure.
  • Choose LCL if you have a cargo overspill, meaning it won’t all fit in an FCL shipment, as this typically the least expensive option to ship the balance of your freight. 
  • Choose LCL when you don’t need an immediate delivery. LCL is a great choice when you’re booking ahead there isn’t any rush as it may be cheaper than an FCL booking. 

Working with Ocean Insights

Whether you’re shipping LCL or FCL, supply chain visibility is essential. Not only does it help to protect your shipments from detention and demurrage charges, costly delays, and incomplete shipments, but it helps you to deliver a new level of service to your customers. Learn more about how our ocean freight tracking system can help you make the most of your supply chain.