Less-than-Container Load (LCL) shipment is a sea shipping method that is preferred when cargo loads are not large enough to fill a shipping container. They are shipped with other LCL cargos to maximize the space of the shipping container.
They are also known as groupage shipments.
Advantages of LCL Shipments
Here are some of the critical advantages of LCL shipments and why companies choose it:
- Lower freight costs
LCL shipments allow companies to save on freight costs as they do not have to pay for the full container load. They only pay for the space that they require.
- Lower risk
By shipping in smaller volumes, there will be lower risks involved if cargo are lost or damaged during shipping.
- Availability during peak season
During peak season, it may be difficult to secure a full container load. In such cases, companies can opt to transport cargo via LCL shipping.
- Lower inventory costs
Companies who wish to keep their inventory costs low and storage space to a minimum can benefit from LCL shipping as they can transport cargo in smaller volumes.
Disadvantages of LCL Shipments
Despite their benefits, LCL shipments do come with their own disadvantages:
- Longer transit time
LCL shipments may take 2 to 3 days longer than shipping via a full container load. This is because time is required to consolidate and deconsolidate the various cargo belonging to different entities before loading and after unloading them.
- Possibility of damaged or delayed shipments
By sharing a container space, a company’s goods can be affected by issues caused by other cargo in the same shipment.
For example, goods that are not packed or secured well could damage other cargo during shipping. Discrepancies in the documents of another company’s cargo can also cause delays to the whole shipment.
Calculation of LCL Shipment Charges
The cost of such shipments depends on the cargo’s volume and weight and is usually measured in cubic meters (CBM).
If a company is looking to transport a shipment measuring 3 meters in height, 5 meters in width, and 2 meters in length. The volumetric weight will be calculated as such:
Volumetric weight = 3m x 5m x 2m = 30CBM
Note: 1 meter is approximately equal to 39.37 inches (rounded to 2 d.p.)
Procedure for LCL Shipments
Step 1: Arrange for the shipment with a shipping company
Once you have decided on a trusted shipping company, you will be required to provide all the details of the cargo. This includes the destination, dimensions of the shipment, and the date for pickup. This will allow the shipping company to ascertain the list of cargo that your shipment can be consolidated with.
Step 2: Dispatch and ship the goods
At the shipping company’s warehouse, your cargo will be consolidated with other LCL shipments. Goods that will be delivered along the same trade route will be grouped together before they are loaded onto a shipping container.
Once the container is filled, it will be loaded onto a shipping vessel which will deliver them to the destination port.
Step 3: Arrival at the destination port and last-mile delivery
The container will be unloaded once it arrives at its destination. Next, it will be brought to a warehouse for deconsolidation, before each shipment is delivered to its respective final destination.
LCL vs FCL Shipments
Full-Container Load (FCL) shipment is a sea shipping method used when cargo loads are able to fill an entire container. It is usually used by companies with high shipping volumes or those transporting bulky items.
Here are some key differences between LCL and FCL shipments:
- Time required
LCL shipments tend to take slightly longer than FCL shipments. This is due to the additional time required for the consolidation and deconsolidation of cargo.
- Cost per unit
The cost per unit tends to be higher for LCL shipments than for FCL shipments.
- Place of loading
LCL shipments are loaded at a shipping company’s warehouse once the cargo is consolidated. On the other hand, companies opting for FCL shipments can load their cargo onto the shipping container before it is picked up by the shipping company. This translates to less handling and a lower possibility of damaged goods.