LCL-shipment

There are multiple ways by which a person can beat delays and transit times. One of those ways is by keeping a lot of inventory in the storage. However, there is another feasible method and that is LCL shipping.

You can use the LCL (Less Than Container Load). LCL is plenty of advantages and due to these advantages, more and more people are moving towards the LCL shipping method.

For instance, with LCL shipment, you can place an order as soon as there is a demand. Like this, there are many other pros that are attracting importers towards LCL shipping.

To help you understand LCL shipment, we have created a blog that contains information related to LCL shipping. Moreover, the blog also contains tips and tricks so that you can get a good deal of LCL shipping.

Table of Content

Chapter 1: LCL Shipment-What is it and How does it works?

Chapter 2: Advantages of LCL shipment?

Chapter 3: Disadvantages of LCL shipment?

Chapter 4: LCL shipment Costs – What is included and what is not?

Chapter 5: Tips to get best LCL shipment rates?

Chapter 6: What Factors to Consider when using LCL Shipping?

Chapter 7: Frequently Asked Questions About LCL Shipment

Chapter 1: LCL Shipment-What is it and How does it works?

LCL Shipment-What is it and How does it works

You have now an idea about what this blog will be about. See, the thing is millions of dollars of import/export is done each year. People are looking for an effective solution that can cost them less money.

Depending on the situation, LCL can be a good option. However, sometimes, LCL is costlier than FCL. In this chapter, we will talk about what LCL is and how it works.

1. What is LCL shipment?

LCL is a shipment term that is used in sea shipping and the literal meaning of LCL is “Less than Container Load”. Basically, there are two types of shipping.

One is when you are using a complete container, and the second is when you are partnering up with another person and are sharing that container.

LCL is mainly used when you want to save money. However, that is not always the case. Sometimes LCL becomes more expensive because of destination port and route.

There are multiple ways by which you can send a shipment, and the best method is LCL (Less than Container Load) shipment because it has state of the art features that make it economical for shippers.

2. Loose Cargo Load- Is it the same as LCL

There is a huge confusion among new Amazon or eBay beginners. They assume that LCL and Loose Cargo Load is the same. No, these two terms are completely different and have their own uses.

We say cargo is a loose cargo when it cannot be palletized. That is mainly because it has huge dimensions and cannot be inserted inside a container.

For instance, these type of cargo is items like ship engines, steel panels, and turbine fans. Sometimes, the loose cargo term is also used when the cargo has been pelletized yet.

Keep in mind that carriers always prefer items that are containerized or palletized because it keeps the items safe.

So, whenever you are ordering items from another country, make sure you have asked the supplier to place the items in a container or on a pallet.

3. How does LCL shipping works?

How does LCL shipping works

If you are working under the LCL shipping term, then that means there will be different shippers working with you. They will be sharing the container with you. Let’s take an example.

A typical container can store about 30 tonnes of items. So, let say you have ordered 15 tonnes of product from China and are preferring the LCL shipping term. 30 tonnes minus 15 tonnes gives you left with storage of 15 tonnes.

Now, you can contact other shippers to share the container with you. Together, the shipping will be divided among shippers and that leads towards fewer shipping charges.

If we compare the CBM cost between LCL and FCL, then LCL will seem greater. However, in the end, LCL shipping cost is less than FCL.

4. LCL vs FCL-Which one is better?

There is a debate about which of the following terms is better. See, the thing is it all depends on the purpose. If you are ordering 30 tonnes worth of product, then obviously you will need the whole container hence the term will be FCL.

If the product’s weight is less than 30 tonnes, then you can share it with other shippers.

Moreover, the cost also depends on distance and the route the carrier will take. Sometimes, FCL (Full Load Container) becomes more cost-friendly than LCL.

LCL vs FCL-Which one is better

That is because the carriers take a long route and LCL shipment can cost you a lot. So, the bottom line is LCL or FCL, it all depends on the route, port of destination, distance, and many other factors. You have to see which shipment term is more suitable for you.

LCL or FCL, it is on the shipper and he has to decide which shipping method to use. However, the thing is these shipment methods are more feasible than air shipping because the charges are calculated using the space an item is taking.

Chapter 2: Advantages of LCL shipment?

Advantages of LCL shipment

In the above chapter, we talked about what LCL is and how is it different from FCL. Moreover, we also mentioned the difference between LCL and loose cargo load. Lastly, there was a difference between FCL and LCL.

In this chapter, we will talk about the advantages of LCL. See, the thing is, there is a need to understand the advantages of LCL shipment because then you will understand the use of this shipment term. Let’s move forward and see what the LCL shipment term has to offer.

1. Save costs on small shipments

New beginners of Amazon cannot afford to buy millions of dollars of worth products, so they always go for small quantities.

When they order the product, the price is different and when it reaches the port, the price per item changes. That is because they use FCL shipment.

If you have a small quantity, then it is preferred to use LCL shipment because with this, you will share the container with other shippers and that will divide the cost of shipping.

With LCL shipment, you can easily save the shipment costs because the overall costs are divided among the shippers are collaborating with you.

2. Avoid high air freight price

Avoid high air freight price

You can ask any person which shipping method (Sea or Air) is more expensive. They will always say that the air shipping method is more expensive.

Then what should a person do if he has ordered products in small quantities? Well, that is where LCL comes in.

LCL shipment will save you additional costs and that can help you in gaining more profit margins, compared to air freight.

Yes, you can send the products using air shipping, but that will take out more money from your pockets. So, compared to air freight, LCL is more economical.

3. Save inventory costs

The point of doing Amazon’s FBA business is making more profits. And, making profits means cutting extra costs. What is what LCL shipment has to offer.

Since the shipping is divided into multiple shippers, that decreases the shipping costs. The overall advantage of this is you can keep more profits to yourself.

The costs that were affecting your profit margin are reduced. Hence, you can sell the items at an optimum price while making more money.

4. Find storage during seasons

Every shipper has to face storage problems when there is peak shipping season. Full container load is pretty hard to find during these seasons. However, there is no issue with LCL.

Find storage during seasons

Since, in the peak season, the shipping costs are much higher so shippers tend to prefer someone with whom they can share the container in order to divide the costs.

The bottom line is, LCL shipment can offer space and can help you in finding space for storing the items.

5. Accept orders on demand

The best feature about LCL is you can place the order as soon as there is demand. With LCL you can send products in small quantities and that means you can meet the demand as soon as there is a season.

You can customers can get their hands on the product and you can easily deliver those products. With this shipment term, you can also save on warehouse storage fees.

6. LCL providers offer flexible service

Lastly, LCL service providers can offer you custom storage options. For instance, if you want 5 tonnes of storage, there is a chance that the service provider can offer that to you.

However, there is a catch, you have to talk with service providers and see if they are offering this service. If yes, then you can select that provider.

Chapter 3: Disadvantages of LCL shipment?

Disadvantages of LCL shipment

We all know that there are two sides to a coin. The same is the case with LCL shipping. In the above chapter, we talked about the advantages of LCL shipment.

However, with advantages, there are disadvantages of LCL shipment. In this chapter, we are going to cover the cons that LCL shipment has to offer.

Keep in mind that the cons of LCL shipment are based on product to product and country to country. The con that someone else is facing will serve as a pro to you. Rest apart, let’s discuss these points.

1. Transit times can be longer than expected

One of the first drawbacks of LCL shipment is it can take longer transit times. There are plenty of reasons for that. One of the reasons is in LCL shipment, there is a need to load and unload multiple products and that can put delays in your shipment.

Secondly, since there are multiple shippers. You can face a delay in shipping just because one of those shippers didn’t have complete paperwork.

Other than that, there are more reasons that can keep your customers waiting for their desired product.

Transit times can be longer than expected

2. Higher costs per unit

Yes, LCL shipment is a good option if you are looking for low shipment costs. However, that is not the case. LCL is pretty expensive if we talk about per cubic meter.

Yes, it is costlier than FCL. So, the bottom line is you have to cater to the CBM and select whether FCL will be cheap for you or LCL.

3. Damage potential can be possible

One of the worst things that can happen is you will get a product that is damaged. See, the thing is in LCL shipment, the loaders adjust the boxes in such a way that every item can be stored properly.

And that means, your items will be handled very often. Hence, the result is due to moving, the items can break.

Let’s take an example here. Suppose you are ordering glass vases from China and you have decided to share the container with other shippers. Now, there is a chance that you will receive broken vases.

The best you can do is put in indications marks such as Fragile- Handle with Care, keep this Side Up, and other markings related to that. However, still, there is a chance that you will face this issue.

4. Delays can be faced

Lastly, you can face delays. Yes, there are transit delays. But, there can be delays such as clearing the customs, shipment delays, delays due to carriers taking another route. Remember, that Evergreen ship incident. Yes, that is very much possible.

Chapter 4: LCL shipment Costs – What is included and what is not?

LCL shipment Costs - What is included and what is not

We get this question a lot that which method FCL, LCL, or air freight is expensive? In this chapter, EJET will explain to you the costs that are involved in the LCL and a detailed comparison between different shipping methods.

1. LCL Cargo shipment rates

So, the question is what you think, if you are sending a small shipment, which of the following (LCL or Air) shipment methods is more feasible.

The answer depends on how fast you want the order and how much you are willing to pay. Let us try to explain it in terms of numbers so that you can understand it better.

Suppose you have ordered 500 baseball bats from China to the US. The CBM of the whole package is 0.06 and the overall weight of the whole box is about 80KG.

The overall cost if you choose LCL shipment will come around 400 USD. Taking about air freight that will be around 600 USD.

LCL Cargo shipment rates

Now, let’s increase the number of baseball bats. Now, you are ordering 1000. In LCL that will be around 450-475 USD dollars. As for air freight, you will have to pay around $600.

If we summarize this overall, we can reach a conclusion that as you increase the weight and shipment size, air freight charges increase drastically compared to LCL shipment.

As for the shipment time, air freight will take around 7-8 days. As for LCL shipment, you have to wait around 25-30 days. Keep in mind that, these are not exact times and figures, they can depend on multiple factors.

You have to consult this with your supplier and related authorities.

But, to help to select the best method, here are some tips.

  • When you are going for LCL, you will be charged a minimum of 1CBM. That means if your weight and dimensions are lower than that, you will still have to pay the fees of 1 CBM
  • In air freight, the rates are calculated on the basis of weight. So, a slight increase in weight can put in a lot of effect on the air shipping fees. On the other hand, in LCL, the rates are calculated using space. The thing is LCL will be cheaper if you are ordering heavy items.
  • Air shipping times and costs do not depend on the final destination. For instance, the rate and transit of Shanghai to LA will be the same as Shanghai to New Jersey. However, with LCL, the transit time and rate will increase.
  • Labeling/Palletization for Amazon FBA Sellers

If you are an Amazon FBA seller, then you need to put the items on pallets and have to meet the requirements of Amazon. The best method of doing that is you can ask the factory to do that rather than the consolidation center. That is because LCL loaders will charge you.

2. Duties and taxes

Duties and taxes are calculated by the customs department. There are different ways by which you can do that. You can always calculate the duties and taxes in advance and then can calculate the LCL shipping accurately.

3. Customs bonds

If you live in the US and are ordering products, then you need to sign a customs bond with the customs and border department of America.

That customs bond is an assurance that you will pay the customs and if you are not able to do that, the customs department will seize your products or can create a case on your company.

Chapter 5: Tips to get best LCL shipment rates?

Tips to get best LCL shipment rates

Now that you have an idea about what LCL shipment is and how does it works, let’s talk about the tips that will help you in getting the best LCL shipment rates.

1. Request quotes from multiple suppliers

One of the first things that you can do is get in contact with multiple freight forwarders. See, the thing is if you want to get the best rate, you have to know the market.

And in order to get fond of the market, you have to contact multiple suppliers.

There are two advantages to that. First of all, you will have an idea about the average rate of LCL shipment. And this way you will be able to negotiate a better deal with the supplier.

In this process, there is a chance that you will not need the negotiation because you will find a freight forwarder who can offer you the best rate possible.

The overall point of this chapter is to find the best shipper who can offer the best rate. And, the best way to do that is to find multiple freight forwarders.

2. Do take pallet dimensions into consideration

Do take pallet dimensions into consideration

We have seen multiple people who complain that the carrier charged them what was not agreed upon. That is because these shippers didn’t consider the size and weight of the pallet itself.

Keep in mind that when you ask your supplier for the dimensions of the box, make sure you are asking for the weight and dimensions of the pallet also. Carriers calculate the weight based on the weight of the products, their box, and the pallet.

So, keep this in mind whenever you are calculating the charges for LCL shipment.

3. Keep in mind that fragile goods need more space

Whenever you are shipping an item that is fragile, make sure you are loading it safely in the container. And, by safely, we mean that there should be enough room between the boxes, it should be handled with care, there should be proper packaging.

In LCL, the fragile items take more space and that means you have to pay additional fees because LCL rates are dependent on space.

4. Avoid hidden charges

The people who LCL shipment as a primary shipping method always go for service-to-door or door-to-door. That is because this is the price that you have to pay at the end. There are no hidden charges in this scheme.

You might face the day when you will see a discounted LCL shipment rate. Don’t fall for that because in the end that discount will change into you paying more.

Chapter 6: What Factors to Consider when using LCL Shipping?

Factors

LCL (Less Than Container Load) has the cons, but due to the fact that it is still cheap, many shippers prefer this method. But, there are some people who don’t know when to use the LCL agreement.

In this chapter, we will discuss when to use the LCL agreement. LCL shipment agreement basically depends on the factors that are mentioned below.

So, let’s move forward and see how you can play with these factors in order to get the accurate LCL shipment agreement.

1. Gross Weight

When you are planning to use LCL shipment, make sure you are considering the gross weight. For instance, you can use the LCL shipment agreement when you have a gross weight of 150kg during the peak season and 200kg in the off-season.

The reason for considering peak and the off-peak season is shipping charges are applied based on the seasons. If there is a season, then the rate will be higher and if not, the rate will be lower.

Air shipping is the best choice for sending small packages. However, a slight change in demand can affect that so, the best solution becomes LCL shipment. So, choose between air or LCL shipping based on the season.

3. Product niche/category

The second thing to consider when choosing an LCL agreement is the type of product that you are sending. See, there are some product categories that you cannot send via air shipping.

For instance, there are batteries, compressed gases, aerosol gasses, and dry ice. These items are only shipped by sea. And if they are in small categories, then LCL shipment is the best option.

When you are choosing the LCL agreement, make sure that you are sending items that cannot be sent via air.

  • Route

Route

LCL charges are based on the route the carrier is taking. The thing is not all routes are available for LCL shipping because there are not that many consolidators.

So, whenever you are going to choose LCL, make sure the carrier is taking the right route or it can become a huge load on your pockets.

  • Time

Facing delays is the worst nightmare that a seller on Amazon can face. That is because customers want to get their hands on the products as soon as possible. And, if you are out of stock, then there is an issue.

It will take a lot of days to re-stock the shelves. An empty Amazon store can also lower the rank and that will put an effect on the listing. So, time is the main constraint in the e-commerce business.

The thing is there are two parameters of an e-commerce business. If you want to satisfy the customers, you will need a fast delivery method such as FCL. If you want to make money, then you can use sea shipping.

FCL shipping is relatively faster than LCL shipping. Sometimes it is worth it to use the FCL rather than LCL because LCL takes about 4 weeks if we talk about shipping time.

Whenever you are choosing LCL, make sure that you will receive the products in the given period.

  • Volume

Lastly, the charges of LCL depend on the volume. So, if you have a product that is taking a lot of space, then LCL charges will be more.

However, if a product has a lot of weight and less volume, then the best method is LCL shipment because weight does not matter in the LCL agreement.

Chapter 7: Frequently Asked Questions About LCL Shipment

faqs

1. Which one is better- LCL or FCL

This point depends on the type of product you are sending. Moreover, it also depends on the route the carrier is taking. Generally, if you have products in small quantities and you can wait for a long delivery time, then LCL is the best option for you.

If you have a large quantity, then FCL is the best solution for you. However, sometimes, FCL is more feasible than LCL because of the shipping routes. So, the bottom line is it all depends on what is the situation at that time.

2. What type of LCL shipment charges apply on Amazon shippers?

Amazon shippers have to take palletization into consideration because that is the only way you can send your products to Amazon business.

Amazon will charge you a fine if you are not able to provide them with items on pallets. If you are selecting LCL, then you can ask the agency to palletize the items. They will charge you for providing that service.

3. What are the advantages of LCL shipment?

There are plenty of advantages of LCL shipping and these advantages are the main reason a lot of people prefer LCL shipping.

But, the thing is advantages depend on the type of product, the country, the route a carrier is taking and many more. To give you an idea, here are some of the advantages of LCL shipment.

  • Reduced transit costs
  • Shippers can avoid high freight costs
  • They can send items in small quantities
  • Shippers can save inventory costs
  • When should you use LCL shipping agreement

LCL agreement is selected on the basis of multiple factors. So, when you are planning to choose an LCL agreement, make sure you are asking yourself these questions

  • What is the volume of that product?
  • How much time will it take to deliver the products?
  • Am I going to order a large quantity or a small quantity
  • Which route will the carrier take?
  • What type of product are you sending?

The above questions that detailed answers in the above chapter will help you in getting the agreement at the right time.

Conclusion

LCL (Less Than Container Load) is the most preferred method of shipping.   That is because there are multiple reasons and advantages of this shipping method. For instance, you can get reduced shipping rates, reduced transit times, and many more.

Yes, there are advantages to LCL, but with advantages, there are disadvantages. For instance, there are chances of getting broken items, delays, and whatnot.

But, the bottom line is LCL is more feasible than FCL. There are times when you can get the perfect shipping rate, but, that is the case if you are calculating the exact parameters.

In this blog, EJET has compiled a detailed guide about what LCL is and what is the main difference between LCL and FCL. Plus, we have also added tips related to how to get the best deal of LCL agreement.

We hope that this blog will help you understand the LCL shipment and how you can use it to ship the products without paying huge fees.