LCL stands for Less [Than] Container Load. When you are moving a shipment LCL, this means you are sharing space in a full container with other shippers and therefore sharing the costs as well.
Many freight forwarders/NVOCC’s offer these services as a lower cost freight option when you have smaller shipments or not enough cargo to fill an entire container. The forwarder/NVOCC will consolidate your cargo with other customers who have cargo moving to/from the same region.
Pros and Cons of moving you shipment LCL:
PROS
- Greatly reduced shipment costs vs FCL or airfreight.
- Can increase supply chain efficiency by shipping smaller shipments more frequently vs. waiting for enough product to accumulate to ship via FCL.
- Improve inventory turns receiving consistent smaller volume shipments vs. one large volume shipment that will sit in inventory longer. This is commonly referred to as a “Floating Inventory”.
- Consistent transit schedules – LCL schedules typically cut the same day every week & have the same transit time to destination every week. Consolidated cargo also moves at a higher rate per container than FCL single commodity business therefore giving it preferential treatment with the steamship lines.
CONS
- Longer transit vs FCL shipping – LCL transit is typically 5-10 days longer than FCL as it will have to transit consolidation centers at origin and destination which adds additional days at origin and destination
- Increased product handling – effective packaging for international sea transportation is critical. Sturdy square boxes are ideal. Ensure proper handling labels and instructions are provided to your forwarder/NVOCC. Remember your cargo will be mixed and stacked with other shipments.
- Potential customs delays – since you are loading your shipment(s) with other shippers, if 1 shipment has a customs hold, the whole container is therefore on customs hold and delayed until it is resolved.
Typically the wildcard in LCL shipping is the terminal handling fees and CFS (Consolidated Freight Station) fees that may apply. You want to be sure these costs are included in your quote prior to shipping as they can greatly change your final cost by hundreds of dollars sometimes.
The key to successful LCL shipping is communication with your forwarder/NVOCC and choosing a forwarder that can fix problems efficiently and effectively. It is certainly a more complicated process than FCL moves with several additional parties being involved. With additional parties come additional costs. You want to be sure you are providing all of the shipment details, asking the right questions and getting complete quotes and an “apples to apples” comparison from your forwarder/NVOCC to ensure no surprises when you receive your invoice.
If you have any questions or need additional information, please feel free to contact me at any time and I will be happy to assist you. across@supfrt.com or 952-854-5053.
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