Are you looking to ship goods but need more cargo for full container load shipments? Less than Container Load (LCL) shipping may be your best solution. LCL is an efficient and cost-effective way of shipping smaller freights, allowing businesses to save money while still having their products delivered promptly.
This comprehensive guide provides all the information you need about LCL shipping, including what it is, how much it costs, and more. With this guide, you can ensure that your freights are handled carefully and arrive safely at their destination.
What is Less-Than-Container Load (LCL) Shipping
LCL, or less-than-container load shipping, is an ideal way to transport cargo when container space or inventory space is limited. This type of shipping involves combining the consignments of multiple shippers into a container, which can then be shipped by sea. This efficient, cost-effective shipping method allows businesses to transport small loads without renting an entire container.
LCL is an excellent alternative for businesses who cannot afford – or do not require – air freight, as it provides faster delivery times than full container load without the high expense associated with air shipments. With LCL’s convenience and cost savings, business owners can easily adjust their freight shipment options to meet ever-changing budgets and cargo needs.
Benefits of LCL Shipping
LCL, or Less-than-Container Load shipping, offers a variety of benefits for those wishing to transport their products across land or sea. It allows smaller loads to be shipped in a secure and timely manner. In addition, LCL shipments provide flexibility, reduce cargo volume, save warehouse space and cost, and enable the buyer to save on the cost by only renting in the required amount.
As LCL shipments are consolidated with other loads, transit times are often faster than traditional full container loading options – often taking days rather than weeks or months. As such, LCL shipping is an ideal solution for those seeking prompt delivery at a minimal cost.
Factors to Consider When Choosing an LCL Shipper
Picking an LCL shipper for your cargo transport requires research and consideration. Evaluating the pricing, sailing schedule, customer service, reliability, and port connections are essential.
Price
When choosing the right shipping company, pricing is at the top. It is essential to compare quotes from multiple sources and weigh pricing for the best value without compromising the quality of the service. An experienced courier should also have competitive pricing with a quality service level agreement in place, delivering maximum security and reliability to ensure hassle-free shipping of your goods.
Transit Time
When selecting an LCL company, transit time should be a key consideration. It is because it directly impacts your customer’s satisfaction and bottom line. When transit time is longer than expected, it can lead to delays in production or impacted customer service. Therefore, researching transit times offered by different carriers and determining how quickly deliveries must arrive to your customers is essential when choosing an LCL Shipper.
Customer Service
Choosing an LCL Shipper is paramount for any business, and customer service should be a top priority. Companies prioritizing customer satisfaction are more likely to ensure the customer’s needs are met and any problems are adequately handled. Customer service in this field ranges from providing excellent online customer support to prompt container pickup times.
Reliability
Choosing a reliable LCL shipper is no small task. It takes research and dedication to ensure that you are entrusting your valuable cargo with the right professionals. Before making any decisions, it is always best to evaluate the past performance of your potential carrier, look into what services they offer, and compare between different companies before signing any contracts.
Additionally, do some online research to gather reviews from other customers. Doing this will help you feel more confident in choosing the ideal shipper for your needs.
Port connections
Port connections are crucial elements when choosing a shipping company for your business. Established port networks provide the scalability to ensure your shipment securely and efficiently reaches its destination – no matter what port it is headed to. Furthermore, good port connections offer an effective way to provide fast customs clearance, low port costs, and get your freight moving as quickly as possible.
LCL transportation pricing is directly proportional to the Weight and volume of the cargo. The volume is defined as your cargo’s length, width, and height and is usually measured in cubic meters (CBM). Therefore, the bigger the volume, the bigger the space a cargo occupies in a container.
Aside from the Weight and volume, the carrier would also consider the price of pickup, sea transit, and distribution.
Preliminary Leg: This would consider the price of collecting your cargo, sorting it according to the destination at the consolidation warehouse, then loading all combined cargo onto one container.
Main Leg: The charge for ocean freight shipping is the only thing in the main leg. And this might have a little impact on your overall cost.
Subsequent Leg: The cost will cover the collection from the port, unloading at the deconsolidation warehouse, and carriage.
For Example:
Ocean freight rate: $37.5/CBM
A cargo’s dimensions are:
Length (L) – 2.0 meters
Width (W) – 1.0 meter
Height (H) – 1.5 meters
Volume = L x W x H
= 2.0 x 1.0 x 1.5
= 3 CBM
Cargo’s Weight – 2,500 kg (1000kg = 1CBM)
= 2.5 CBM
Basic Ocean Freight in LCL is calculated based on the per cubic meter rate or per Ton (per 1000 kg’s gross Weight), whichever is higher.
Hence, 3 CBM is higher than 2.5. Thus, $112.5 is the rate of the cargo.
Common Challenges with LCL Shipping
Guaranteed time
One of the main disadvantages of LCL freight shipping is that it does not offer guaranteed shipping times. With LCL, the timing of the pickup and carriage can vary significantly due to multiple shipments being accumulated into one container, waiting for inventory from various suppliers, and slow processing at ports.
Instability
Other disadvantages associated with LCL shipping is the instability and inconsistency. The price of these shipments can fluctuate dramatically depending on the transportation company, size and nature of goods, and other factors. In addition, the need to consolidate goods with other shippers often creates unpredictable delivery times and makes tracking cargo difficult.
Furthermore, additional handling costs may occur due to multiple unloading and reloading processes in LCL shipments. As a result, carriers may deliver the cargo to a third-party warehouse even if their final destination is smaller or closer, delaying shipping times.
LCL shipping can be unpredictable and unreliable compared to FCL shipping due to the surprising number of packages that some carriers may discard. As a result, it can sometimes cause havoc for companies relying on just-in-time shipment, especially when dealing with time-sensitive products. This factor makes a case against LCL shipping; its unpredictable, unreliable, and uncertain nature often outweighs its low-cost benefits.
Complexity
Another concerning factor with LCL is its complexity. It passes through many touchpoints, such as freight forwarders, consolidators, CFS, deconsolidation warehouses, agents, and brokers. This complexity often makes LCL cost prohibitive to some, as higher-than-anticipated financial risks are due to additional charges that may apply during transit.
Risk and Security
The riskiest aspect of LCL shipment is the consolidation of goods from multiple customers. As goods are consolidated with other freight, theft, damage, and loss are higher. As a result, many businesses find that FCL shipments may be suitable due to the security concern attached to LCL.
The Future of LCL Shipping in 2023 and Beyond
LCL (Less than Container Load) shipping is rapidly becoming the most cost-effective option for ocean freight in the years ahead. Although less reliable than full container shipments, companies in 2023 and beyond are increasingly turning to LCL as a less expensive alternative due to challenging shipping conditions caused by pandemics and fluctuations in the market.
Large and small companies appreciate the potential to save on fuel and labor costs while benefiting from an efficient, faster distribution system that leads to happy customers. By 2027, LCL shipping could all become the preferred choice as prices continue to decrease and reliability increases over time.
Conclusion
Overall, LCL shipping has its advantages and disadvantages. It can be unpredictable, complex, and risky compared to full container load or FCL shipments, but it is also cost-effective for companies looking to reduce their freight costs. In the years ahead, LCL will become an increasingly attractive option as more businesses embrace this alternative form of ocean freight.
As technology advances in the coming years, the reliability of these shipments could increase while associated fees continue to drop, making them even more appealing. Companies should weigh all factors when considering whether or not they should invest in LCL shipping services.
Frequently asked questions
What are the benefits of LCL shipping?
The main benefit of LCL shipping is that it is cost-effective. Companies can save on fuel and labor costs while benefiting from an efficient and faster distribution system. Additionally, LCL allows companies to ship smaller consignments, enabling them to make fewer significant.
What is the difference between FCL and LCL shipping?
Less than Container Load or LCL and Full Container Load or FCL refers to two types of ocean freight shipping methods. FCL involves the shipment of goods in an entire container, while LCL refers to the shipment of goods that are consolidated in a shared container.
What risks are associated with LCL Shipping?
The riskiest aspect of Less than Container Load (LCL) shipment is consolidating goods from multiple customers. As goods are consolidated with other shipments, theft, damage, or loss is higher. Additionally, due to the unpredictable nature of LCL
8-figure Amazon seller and serial online entrepreneur since 2015. Research and practice various online business models, and apply his in-depth learnings to further expand and grow his businesses as well as help others to achieve greater successes. Ex-VP of a high tech VC in Vancouver and a Management Consultant with over a decade of experience in the industry. Master's Degree from HEC Paris.
