Shipping small consignments of goods on an ad-hoc basis can become quite expensive, especially if you find yourself hiring a whole container but not using all the space. LCL (less-than-container load) shipping can be a good way to optimise your costs. But exactly what is LCL shipping and how does it work?
LCL is a term used in sea freight to describe loads that are “less than a container load,” or a shipment that does not fill an entire container. Depending on the route, destination, and requirement, shipping via LCL may be more costly than FCL, so contact a reputable freight forwarder or 3rd party logistics company to obtain a few quotes.
In LCL shipment, different shippers share a container. When cargo volume is not enough to fill a full container, an LCL shipment is usually cheaper, since the cost of shipping a full container is shared. When comparing the CBM cost between an LCL shipment and an FCL shipment, LCL will be higher, but the total price is often lower.
Advantages of an LCL Shipment for the Buyer
The buyer only needs to pay for the space that they need to use since the container is shared with other shipments. This option allows small businesses to take advantage of the low cost of ocean shipping without requiring high volume.
Air shipments are charging either by the gross weight or the volume weight, whichever is higher. Whereas the ocean LCL is charging fees per cubic meter (or per 1,000 kg whichever is higher), making it a more economical option for shipments that are small yet heavy given that the transit time is not an issue.
- Reduce shipping costs
- Save on inventory costs
- Avoid high air freight prices
- Find space during peak times
Disadvantages of an LCL Shipment for the Buyer
The ocean freight cost of an LCL shipment is per CBM, which is typically higher compared to the total cost of a full container. Because of this, the buyer is only buying a part of the whole container’s space. It is essential to keep in mind; there are instances wherein LCL may be more expensive than simply getting a full container.
Although LCL consolidators are categorizing the goods that they are putting together in a container, there is still a higher risk of the container being flagged for a customs examination compared to FCL simply because there are more types of products in the container.
In rare instances, LCL shipments can also be mixed up or misplaced with other shipments due to the handling involved in the deconsolidation process. Compared to FCL wherein the whole container is being transported and unloaded to the final destination, LCL containers are being unloaded from the containers in CFS (Container Freight Station) warehouses. For the same reason, LCL shipments also take some more days in transit compared to FCL, because of this deconsolidation process.
Generally, the ocean freight is known to take more time in transit than air freight, thus, shipments that are time-sensitive should be carefully planned. Though faster vessels are already available for LCL nowadays (for some routes), buyers are still looking at at least 16 to 24 days (for US west coast destinations) before they can get their goods delivered. The typical transit time of an LCL shipment to the US is within 4 to 6 weeks from the vessel’s departure date compared to 5 to 9 days if shipped via air cargo.
- Longer delivery lead times
- Higher rates per cubic meter
- Shared cargo, shared problems
- Great chance of damage
- Added costs of transport
LCL is an excellent option for businesses who want to save money on shipping or want to ship small loads across the globe.