Understanding LCL shipments
If your shipments are not large enough to fill an entire container, it is more economical to ship it as less than a container load (LCL).
Since LCL shipments fill less than a full 20ft or 40ft shipping container, these are grouped with other cargo. This is why LCL shipments are sometimes called groupage shipments.
There are also cases where LCL are mistakenly associated with 'loose cargo', which should not be. A loose cargo load is a load that is not palletized. This term can apply to shipments that do not require palletization and/or cannot be containerised due to their dimensions.
As you might already know, LCL is recommended as a safe way to ship cargo in moderate volumes while keeping costs low. While this is mostly true, it is important to understand the LCL shipping process in its entirety.
Things to Consider when shipping LCL:
LCL Costs Less
When you ship LCL, you pay only for the volume you need – not a flat rate as with FCL
LCL is cheaper than air freight, so if you have some spare time to wait for your shipment, you can lower shipping costs.
When container capacity is limited, for example during peak shipping season or during other periods of high shipping volume, LCL can be easier to find and faster than FCL.
It Reduces Warehousing and Inventory Costs
Shipping fewer goods more frequently means spending less on inventory warehousing space and or investing in large individual inventory purchases.
Can be used as a tool in creating a leaner supply chain.
Transit Time
In LCL, the shipment needs to be consolidated/deconsolidated before/after the ocean voyage. This occurs at a specialised warehouse called a container freight station (CFS) and will add a few days of lead time at origin and destination.
Customs delays are more likely with less than container load shipping as you are sharing space with other importers and their delays could impact the entire container.
Shipment Size
LCL cost is calculated primarily by volume, usually in cubic meters (CBM). If your LCL shipment is very heavy and dense, your cargo may be charged by weight instead of volume.
Major trade lanes typically have a minimum charge of 1 cubic meter (CBM) for LCL shipments. This means if you have a ½ CBM LCL, you’re going to be charged for 1 CBM. Therefore, you typically want to ship 1 cubic meter or more for your LCL shipments.
Charges
When you ship LCL, you will be charged for a minimum of 1 CBM. That means if you have a shipment smaller than that, you won’t get a lower price.
The ocean freight charge for LCL is often labelled “W/M” which stands for weight or measurement.
LCL shipments will also incur warehouse charges for being consolidated and deconsolidated. These will include forklift fees and other charges from the Container Freight Station (CFS).
Possible Costs:
Pickup: The cost of picking up your shipment from the warehouse or factory.
Origin: LCL shipments need to be loaded onto containers along with other shipments, or consolidated, at a Container Freight Station, or CFS. This is sometimes referred to as container stuffing.
Main leg: The cost of the sea journey. Although this is the main leg of the shipment, it may not be the most expensive part. In certain instances, charges at the CFS can be very significant because they require significant machine and manpower.
Destination: At arrival in the destination country, LCL shipments need to stop at a CFS for deconsolidation, or unstuffing.
Delivery: The cost of trucking your goods to the destination warehouse.
LCL versus Air Freight:
Air freight is more expensive, and its prices are more volatile. When cargo size and weight increase, air freight rates go up comparatively faster than LCL rates. If you are on a tight budget, you might be better off shipping LCL, especially for heavy cargo.
Air freight is faster and safer. A shipment that takes a month by sea can be delivered within days by air. Air freight is better for time-sensitive or valuable cargo.
Compared to ships, airlines have more restrictions on goods, especially hazardous materials. For such merchandise, LCL might be a better bet.
LCL versus FCL
LCL rates are more stable. They stay valid for a month to three months while FCL rates are generally valid for two weeks at a time.
FCL cuts risk of contamination from other cargo, so it is better for temperature-sensitive and hazardous merchandise. But LCL shipments are said to be more securely packed, reducing risk of damage from movement
FCL is suited for urgent deliveries and LCL for shipments with flexible delivery dates
Should you wish to discuss your business LCL needs or if you have questions regarding sourcing a quote for your shipment please call our friendly sales team today at Image International Freight on email: sales@imageinternational.com.au or call +61 2 9773 1378
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