A complete guide on LCL shipments

  • March 24, 2021
  • Blog

Anyone who is part of a supply chain process would have come across the acronym ‘LCL’ or Less than Container Load multiple times. In simple words, it can be said that it is a way of shipping wherein your cargo is shipped with several other cargoes to fill up a container.
What is LCL shipping?
LCL shipping is also called groupage because cargo is grouped with other cargo in a single container moving to the same destination. 
Advantages of LCL

  •  LCL is cost-effective. The customer pays only for the volume of space the cargo takes in a container. It works out cheaper than air freight
  • During peak season, LCL is easily available when compared to FCL
  • For small businesses, LCL is a preferred mode as it saves on inventory space

Drawbacks of LCL

  • If it’s a large volume of cargo, LCL sometimes may not be cheap due to the higher cost per cubic meter.  The freight forwarder has to do multiple tasks in LCL with regards to consolidation of LCL shipments, booking it in books, and next booking the container for shipping.
  • With LCL shipments, it might happen that the route may be the same, but not the destination, so the shipment has to stop at multiple ports with several rounds of loading and unloading, and this may cause damage to the cargo. In addition, there might be even delays for shipments to reach the final delivery point.

 In LCL shipments, freight is generally based on the space occupied by the cargo in a container that is, based on cubic meter cost. Weight is not a concern, only if it is beyond one ton. Freight forwarder’s generally charge based on weight or space occupied, whichever is more.
It is important to note here that when cargo is sent via LCL, then the below pointers also form part of the cost:

  •  Picking up the cargo from the shipper’s warehouse
  • Stuffing the cargo into the container, consolidating with other shipments.
  • The ship journey
  • Destuffing and again deconsolidation in the destination port
  • Lastly, transporting the cargo by road transport using trucks to the destination warehouse‍

When should you ship cargo using LCL?
The general rule is to use LCL to ship low or moderate-volume cargo to keep the costs low. But before taking a decision, the below factors have to be considered while also examining how LCL compares to air freight and FCL:  
LCL and Airfreight
Both the modes are suitable for small shipments, but which one to opt for depends on the decision taken after considering the urgency, weight, size, and content of the cargo.

  • Air freight is expensive and the price is extremely dynamic. If there is an increase in the size and weight of the cargo, the price of air freight drastically increases in comparison to LCL costs. If a customer is looking at cost, then LCL is a better option, even if there’s heavy cargo.
  • Airfreight is quick and safe. A shipment moving via sea may take a month’s time to reach its destination but with air freight, it might take only days. When it’s an urgent requirement and time-sensitive or valuable cargo, Air freight is a better option.
  • Today, with the availability of varied technology, ships are getting faster with a guarantee of safe delivery of goods. With expedited LCL, the delivery time has gotten shorter and it takes the same time as air freight but is cheaper in cost. Expedited LCL is popular in the e-commerce and fashion industry.
  • Even though airlines are faster, they have loads of restrictions on goods, particularly, hazardous materials and for such cases, LCL is a good option to choose.

‍LCL and FCL

  • LCL is the first choice due to its cost-effective feature, but an LCL can’t fill up the container, so it might be a good choice to go for an FCL if the cargo reaches a certain volume.
  • In the industry, it’s a norm to book an LCL up to a space requirement of 13 cubic meters, for anything above, FCL is opted for. In addition, an LCL shipment might attract additional destination charges. In such a situation, it is better to pay for an FCL. 
  • Time is precious and for LCL shipment, it’s always a delayed shipment. Opt FCL for the urgent deliveries and LCL shipment for flexible delivery dates.
  • When it comes to rate, FCL rates are flexible and dynamic, it changes quite often, on the contrary, the LCL rates are stable and are valid for a month to three months.
  • The content of the cargo has to be considered. In FCL, there is no risk of contamination from other cargo. Products that are temperature-sensitive or hazardous cannot be consolidated with other cargos, it has to be sent in an FCL, but LCL shipments are more securely packed and reduce the risk of damage from the movement.

‍Packing of LCL shipment
Inadequate packing may damage the cargo; hence it is important to pack the cargo securely.
The cargo should always be packed in boxes designed for exporting goods. Then the cargo has to be placed in pallets, secured in straps, and then loaded into a container. This process is called palletized LCL.
Each piece of cargo has to be labeled with detailed information: Booking number, destination country, the shipper name, and the consignee name. If needed, a fragile tag can be also included. The label should be neatly written and visible.
All the cargo needs to be uniformly packed. If it’s a fragile cargo it should be mentioned clearly and should not be stacked
Transportation of LCL shipment
Not only ships but there are also other modes of transportation: rail and road. Choosing the right transportation is important for LCL cargo:
FTL (full truckload): As the name suggests, the truck carries one whole shipment with a single destination.
FTL advantages: Quick delivery time, lower risk of damage to the cargo, and easy cargo handling
FTL disadvantages: Expensive option
Best suited for time-sensitive and valuable cargo
LTL (less truckload): The truck carries more than one shipment of a similar volume
LTL advantages: Affordable as the payment is only for the space occupied, freight is based on weight
LTL disadvantages: Multiple stopovers as many cargos are stacked in one shipment. Risk of goods getting damaged or lost.
Best suited for small businesses and cargo with flexible timelines.
Summary
In case you are looking to book your cargo in LCL shipment, get quotes from multiple freight forwarders to get an idea of the market price. Choose the freight forwarder with experience and have a credible name. 20Cube logistics has been in the business of freight forwarding for the last two decades and their prices are affordable when compared to others in the market. They provide you the best service, on-time delivery with real-time tracking of the shipment from origin to destination.