Well, being a trader or an importer, you must have encountered a situation when you wanted to get something imported, but it was not enough to fill a huge container.
You would have thought that how should you deal with this? If yes, then LCL (less than container load) is the solution to your problem.
LCL is the way of shipment you can opt for when you think you do not need a whole container. Less than container load provides you the comfort of booking a container in partnership and relief from paying its total charges.
The cost gets divided into all the people using it hence making shipment pocket-friendly for you.
Read the blog below to get a deeper understanding of LCL shipping, to know how it is different from FCL, and what advantages it can provide you.
Before importing from China, you must know the different modes of shipment used by people. The reason for doing so is that you can save yourself from a lot of trouble.
If you want to go smooth with the process, getting the most knowledge of different types of shipments is necessary for you. This is the only way you can know what will suit your needs and what will not.
Let us suppose that you are an importer from China and you want to import some goods. You see that the goods are not enough to fill the whole container, which means by booking the cargo.
You will be transferring fewer goods and paying more. Hence, your money will get to waste without giving you any benefit.
What should you do? Wait for another batch of goods and send both together? What if you do not have time for that? Well, you will avail the service of LCL to save yourself.
Previously, the abbreviation LCL was applied for “less than carload” and was used to deal with railway transport. A railway car was used to transfer the goods of several shippers, and they were delivered to different destinations.
The term, used for the process of filling a cargo with multiple shipments, is called groupage.
When your shipments are not large enough that they can fill a whole container, then you should opt for LCL.
LCL shipment considers the major factors like the volume that your goods will occupy, their gross weight, the product category they belong to, the time required for their shipment, and most importantly, their route of shipment.
After this, similar shipments are grouped and transported together. In LCL shipment, the total cost is divided among all the people sharing a cargo.
Hence, the LCL shipping works with the principle of grouping.
When you need to globally ship your goods that do not fill a whole container through sea routes and railway routes, then you can choose LCL. It is best for small businesses that want to cut down on the extra costs and keep their finances within their budget.
The ocean’s LCL is specifically profitable because it charges a fee per cubic meter. This makes you liable to pay only for the space your goods have covered.
It is one of the most economical options available out there. You can even choose LCL when you do not want to take risks with the time of transit and want your deliveries to never get late.
All these modes of shipment differ on their price range, distances, the process of shipment, etc. every mode of transfer is not suitable for everyone.
To get the perfect solution for your shipment, you should know about them and decide.
LCL is not all about advantages and benefits. Like all other things in the world, it has some drawbacks also. One should have an idea of all the drawbacks so that one can cope-up with them in a better way.
Following are the most important advantages and disadvantages of using LCL.
||Pros of LCL shipping
||Cons of LCL shipping
||Using LCL, you pay only for space your goods have covered.
||Being transported with shipments of other people, your shipping can get delayed because of them.
||Because of shipping fewer goods, you have to pay less inventory space expenses.
||LCL Shipment, the container is not your sole ownership. So you cannot handle the shipment by yourself. It has to be through a 3rd party company who will collect goods. So you do not have 100% ownership of the container.
||The Shipping cost is dramatically lower than your expectations.
||You have to negotiate with the shipper to ensure the safety of goods and may have to provide them money for provide extra safety to your goods.
||LCL shipping is easy to find and use and you do not have to prepare many documents
||Loading and unloading of shipments in LCL take more time because of more than one shipment in a single cargo.
||It is one of the fastest ways of shipping if the container is loaded quickly and shipped out
6. What is the rough estimated cost of LCL shipping?
Some factors are very crucial to calculate the cost of LCL shipping. You can have a rough estimate of shipping costs by checking the following things;
- How much volume (in cubic meter) will your goods cover? There is a direct relation between the space covered and the costs of shipping.
- Different freight forwarding services charge different rates for picking up your goods.
- The container stuffing and integration of goods in the container also cost you a fee.
- It is mostly misunderstood that the main journey of any shipment costs the most, while it is mostly not the most expensive part of the shipment.
- The disintegration and unloading of goods at the destination also adds to the total cost.
- If you opted for a shipment that included delivery to a specific location (like a warehouse) other than the main ports, then delivery charges will also be added to your bill.
We suggest that you should contact your freight forwarder who will handle your LCL Shipment and confirm the latest rates from them.
Chapter 2: Choosing between LCL and FCL – Which one is better?
The LCL shipping is often compared to FCL shipping because both are commonly used in import and export. Knowing which is beneficial for you can help you in selecting the best service and save you from a lot of trouble that may occur otherwise.
1. What is the difference between LCL and FCL?
LCL stands for less than a container load while FCL stands for a full container load. In LCL shipping a single container is shared by several traders, while in FCL, the container in use is exclusively dedicated to a single trader or importer.
LCL is suitable for smaller deliveries, while FCL is good for bulk deliveries. This is not the only difference between the two. Both these modes of shipment vary based on the following things.
- The process both of these shipment modes employ for their international shipping
- Time of shipping
- Handling of the process and its complexity
- Cost of shipment
2. What are the advantages of LCL?
LCL shipping offers multiple advantages to the people. Some important points are discussed below.
- Covering the lower space of cargo means paying a lower fee. This is the key benefit of using LCL. Before the introduction of LCL, people used to wait for the time when they had enough goods to fill a container.
- This often cost them loss due to late deliveries and rotting of perishable items. So LCL came as a smarter option for shipping.
- LCL is a very economical way of shipping goods and it sorts out the whole process to make it less complex. It keeps the supply constant, so whenever the supply seems to diminish, LCL comes forward as a savior.
- Scheduling a consignment and managing time is very easy when using LCL shipping.
- You only have to select a freight forwarder to book a shipment, and there will be a team to look after the whole process, organize a suitable mode for transportation, and complete the delivery.
- You can pick your load yourself from the cargo at the warehouse without needing any middleman thus saving the cost of hiring a middleman.
3. What are the disadvantages of LCL?
The problems or disadvantages you may face while using LCL shipping are discussed in the following points.
- LCL shipping might be time-consuming if the customs department starts digging deep for inspection. It is an obligatory process that is merely for your benefit, but sometimes it can cause delays.
- If your goods are checked by the customs authorities, and they open each box, then it will cost you an extra amount of repackaging the goods.
- As there is more than one consignment in a single cargo, so unloading those at different locations may cause delays. This is problematic, particularly for the one receiving the packages at the final destination of shipping.
- The service charges of LCL are higher than that of FCL.
4. What are the advantages of FCL?
The benefits of FCL shipping are:
- The cost of shipping (per unit) in FCL is considerably lower than that of LCL. So fewer service charges mean more margins of savings.
- The delivery time of FCL is shorter than LCL because there is no need of integrating, disintegrating, and stopping at different points for unloading. The whole container is booked by a single party, so it has only one destination.
- You can track the FCL directly from the freight forwarder’s website.
- FCL is safer than LCL.
5. What are the disadvantages of FCL?
The main disadvantages of FCL shipping are:
- You have to pay for the full container (25 to 67 cubic meter space) along with the other costs.
- It is not at all suitable for small businesses.
- Required a lot of documentations
6. What is suitable for you – LCL or FCL?
Being a businessperson, the main goal is to amplify the profit. Checking the costs, cutting down extra expenses, is the best strategy on your end. One important factor in doing so can be the selection of the most cost-effective and efficient method of shipping goods.
The method that makes sure the on-time delivery of goods, has lower costs, and uses a simple mode for shipment will be your favorite choice. The safety of cargo is yet another thing to take care of.
Choosing between LCL and FCL is not very difficult. You only have to check the scale of your shipment. If you intend to transport small packages that cannot fill the whole cargo, go for LCL.
If your business is large enough that you wish to export or import a large number of goods, often larger than 15 cubic meters or 20 feet, that would fill the whole container, then choose FCL. Different circumstances favor different modes of shipment.
Chapter 3: Things to consider before deciding on LCL shipping
Following are the things that need to be considered while deciding on LCL shipping.
1. Volume vs Weight of LCL shipping
Volume is the space covered by the goods and weight means the total weight of goods along with the packaging. The ocean freight is charged according to the volume.
If your goods are between 1 to 16 cubic meters in volume or 150 to 200 kg in weight, you should go for the LCL agreement. If you keep in consideration the volume or weight of shipment you can save yourself a lot of money that otherwise have gotten into waste.
2. The product category for LCL Shipping
There are several product categories that are including hundreds of products. Some are permissible to ship, some are not. Categorizing the products makes the shipping process easier. You can also find the cargo that ships similar products by looking for the category.
Products like compressed gases, dry ice, and aerosol cans are not allowed to be shipped via air freight so LCL shipping is a good alternative.
3. Route of transfer in LCL. Choosing Sea or Rail
There are two main routes of transfer used in LCL shipping. The sea route and the rail route. Both have their own features and you can check which suits you the most before deciding on any one of them. These routes (sea and rail) connect several ports to each other and interlink the whole world thus, turning it into a global village.
4. Time of shipment
The time of shipment varies according to the location of shipping and destination. The package whose destination is nearest will be delivered first and vice versa.
Other factors that can cause hurdle and delay delivery include prolonged custom clearance, offloading and reloading, and issues in paperwork.
If one shipment does not fulfill the obligations of freight, all the other shipments consolidated with it will get delayed. Time also depends on the mode of shipment you have used.
5. Cost of shipping in LCL
The cost of shipment in LCL depends upon the volume of goods, stuffing, integration, disintegration, unloading, and fee of transport.
It varies with route of transfer and different freight forwarders charge a different amount for the purpose. You should always beware of hidden costs that may surprise you. Always do written agreement with the freight forwarder.
6. Risks pertaining to the use of LCL shipping
There are a few things that may impose a risk on your shipping. As LCL has the goods of more than one exporter, so there is a high risk that any one of the packages consolidated in the cargo may not get cleared by customs.
Thus, your shipment will be delayed. You may also receive the goods in broken or damaged form due to insufficient packaging.
If the cargo gets offloaded at a port (which rarely occurs), it will then be shipped in another container, hence prolonging the time of delivery and inducing high risk.
7. Expert tips to know before deciding on LCL shipping
Few things that might save you from a lot of trouble or help you save some money may prove beneficial for you. Some expert tips regarding LCL shipping include the following points.
- Requesting quotes from many freight forwarders and comparing them to know which suits you the most. Once decided, get quotes in writing.
- Do not expect the cargo to arrive at the exact time of delivery and always keep the margin for delay.
- You are not only charged for the box but the pallet. The pallet is a portable platform that is used to pack items. It is the space surrounding the main package. So, always take pallet dimensions into account.
- Fragile goods cover more space because you cannot put anything above them.
- Stay alert about hidden charges.
- Understand the dimensions of the container to see how much space your goods need and place them accordingly.
- Reconfirm the volume of your shipment to crosscheck it with the consolidator’s invoice.
- If you are an Amazon seller, do check their warehouse guidelines.
Chapter 4: Step by Step Process of using LCL Shipping
After analyzing that you do not need to pay for the whole cargo, if you are not using the whole container, you may choose LCL. So the following is the step-by-step procedure of LCL shipping.
1. Booking an LCL shipping through a Freight Forwarder or Sourcing Company
The first step will be to book LCL shipping. This step is easy. You just have to contact a shipper and negotiate with him about your shipment.
You should always try to book the cargo earlier, as there are several other tasks like unloading of previous material, grouping and assembling, and reloading, etc. take time.
2. Preparation and Packaging of goods
Now you have to make a list of your goods and see how your goods could be shipped. The time of good preparation for international transport depends upon the weight of the goods.
Heavy furniture and electronics will take time to prepare. Batteries such as lithium batteries are subjected to a large degree of regulation. This must be considered as a factor during the preparation of goods.
3. LCL shipping integration
Integrating LCL means merging your stock with that of others in a single container. It can also be called the consolidation of goods. All your goods with other LCL shipments will consolidate near the departure place.
4. Drayage – carrying cargo to the point of export
The next step is to carry the cargo to the point of shipment. Once your goods are loaded in the warehouse of freight forwarder, and are being consolidated, now it needs to be drayage to the port where the goods will be exported from.
The drayage is used as a logistic term, referring to the service where freight forwarder is having goods cover short distances. He will load them in a container from his warehouse and then ship it to the port for international shipment.
5. Shipping of the cargo
Now, the LCL shipment will take place overseas. The shipment can take place in two ways. Shipment via direct route and shipment via transshipment point.
Direct route means the goods will directly be transferred to the destined place. Transshipment ports are the points in between the destined position where the cargo will stopover.
6. LCL shipping disintegration and unloading
Now, when the cargo reached the destined position, it will be offloaded from the ship. The goods will be drayed to the destination Container Freight Station (CFS). At CFS, the goods will be offloaded, and each consignment will be separated according to the final destination.
7. Dispatching goods
Now your goods are disintegrated, you can go and collect the goods. The dispatching depends on the type of mode you are using.
If you are connected with your transport company, it will take the goods and deliver them to your warehouse. You have to sign the acknowledgment papers before receiving the goods.
Chapter 5: Confusions about LCL shipping and their Answers
People usually have confusion about the routes of LCL, which countries favor it, how to ship fragile and perishable things through LCL, and rescheduling the shipment.
Read further to know the answer, because here all these confusions are discussed along with the answers.
1. Shipping fragile goods through LCL
Shipping fragile goods need special attention. If you want to ship something which is delicate, you should make sure that your freight forwarder consolidates with it, and it will not be its first time shipping such goods.
Your goods might need to pay more for extra protection of such goods. Other than fragile goods, perishable edibles, temperature-sensitive commodities, and brittle glass products will need extra care.
The best approach is to connect with the freight forwarder who deals with such things on a normal basis, and has well know-how about them.
2. LCL shipping with Alibaba
As, the majority of products ordered through Alibaba.com are smaller in size, so the only option available for their shipment is LCL.
You only have to connect to the supplier, place an order and pay for the customs once the order is delivered. The supplier does the packaging, labeling, assemblage, and integration of goods for their shipment through LCL.
Less than container load shipping is the most used option regarding the delivering orders placed on Alibaba website.
3. LCL shipping through sea route
Less than a container load shipping is the most common way of shipping, which is also cost-efficient for smaller shipments. Small businesses often prefer using sea routes to transfer their goods to other countries.
The method of shipment is the same as discussed above, following the same steps of booking, integrating, drayage, shipment, disintegration, and delivery.
The seaports are the main terminals of delivery, whereas you can hire a middleman to pick the load and send them to your desired place.
4. LCL shipping through rail route
Railway routes are a good alternative to sea and air routes when it comes to shipping. Being specific about shipping through LCL, rail routes are suitable for traders dealing with low margin products, goods with shorter life span and those looking for lower cost shipment.
Recently, due to Covid-19 when many air flights and sea shipping were facing difficulties, Railway routes kept serving the people through LCL and FCL shipping. So, LCL shipping through LCL is more reliable.
The cost of shipping through railway routes is considerably low, and the process of shipping is similar to that of sea freight.
5. Optimizing LCL shipping due to change in business schedule
Managing business, no matter small or large is chaos. You always have meetings, discussions, and differences of opinions among partners leading to change in schedules.
In such conditions, you need a reliable service that can incorporate these changes and make shipping possible. While using FCL, this might be a problem on the other hand, using LCL adjustments according to using.
need becomes easy.
LCL shipping is the most efficient and fast mode of accommodating any changes in the business schedules.
All you need to do is to inform your freight forwarder about the change in schedule so that he can see the alternative plan.
Chapter 6: Frequently asked questions About LCL Shipping
1. Is LCL shipping time consuming?
LCL shipping is not a time ‘wasting’ in any way. The process starts as soon as you book a container space with a freight forwarder. The time consumed in LCL depends on your destination.
If your desired location is not very far, then less time will be consumed in the process of shipping, otherwise it will take time. Hence, you can say that LCL shipment does not consume any extra time. But compared to FCL shipment, yes it takes more time.
2. Is LCL shipping costly?
The LCL shipping cost depends on the volume of the container and the weight. Being more specific, cargos and huge shipping containers have enough capacity to bear weight, so the actual cost definer is the volume.
By volume, we mean the space your goods cover. The higher the volume of your goods is, the costlier the shipment will be.
3. Which routes does LCL shipping follow?
LCL shipping follows sea routes and rail routes to transport your goods. You can either book a container for sea shipping or have a block of trains booked for offshore shipping.
Both are frequently used by people hence, there is no safety concern regarding them.
4. Is LCL shipping safe for goods transfer?
LCL shipping can only ensure that your goods will reach their destination safely. It does not ensure that your fragile goods will remain intact.
For such brittle goods, you have to add extra effort in packing. If something is naturally hard and intact, LCL shipping will not harm it.
You can negotiate with the shipping authority to pay extra attention to your goods for they are fragile. One best practice in this regard is to choose a cargo that is particularly used for shipping such goods.
5. How does LCL shipping work in railway routes?
A network of railway routes joins different countries to ensure the influx and efflux of consignments and promote trade.
The products are picked up from the warehouse or decided location, integrated and grouped with other people’s consignments, and transported through the railway. Disintegration and delivery of goods also similarly take place.
6. Which goods are suitable for LCL shipping?
There is no restriction about goods in LCL shipping except illegal goods, drugs, and other such stuff. Whereas, you should try not to be very lenient and take all the safety precautions while sending goods.
Check if the country to which you are transporting goods allows their import or not. Otherwise, practices regarding sending goods through LCL include
- Good and intact packaging
- Booking the right cargo
- Avoiding edibles as they can rot
7. When should one opt for LCL shipping?
When you need to ship the goods that do not fill the container, you use LCL. Other situations when you can opt for LCL shipping include;
- Global shipping of goods
- Ship through sea route and rail routes
- To cut down the extra costs while running a small business
- Save the time of shipping by skipping lengthy paperwork
LCL shipping – less than a container load shipping is not used as a technical term that only deals with business contracts. It is a mode of shipment.
If you own a small business, then you can take advantage of LCL and cut the costs of shipping.
And last but not the least, if you have a running business that has already developed, then you can save yourself from hustle by choosing LCL.
We hope this blog has given you a good understanding of what LCL is and how you can use it in Shipping.