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Sea freight is the most cost effective way to transport your goods from the factory floor in China, to your warehouse – especially when shipping larger volumes according to FCL (Full Container Load) terms.
That said, many buyers don’t purchase large enough volumes to fill an entire container with goods. For this category of buyers, the LCL (Less than Container Load) options remains.
In this article, you will learn what LCL and FCL is, and how they differ in terms of cost and process.
In addition, you will also learn how you can save thousands of dollars, by consolidating your LCL shipments into one FCL shipment.
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Definition of FCL (Full Container Load)
FCL is an international ISO standard referring to one (full) container load (20” or 40”) containing cargo for one consignee (one importer). FCL shipping is the cheapest mode of transportation when importing from China.
However, in order to be a viable freight option it requires the importer to purchase a relatively large quantity of products.
Advantages of FCL shipping
1. Lower price per cubic meter compared to an equivalent volume or weight of cargo shipped by Air Freight or LCL Sea Freight.
2. More convenient to optimize your quantity and export packaging to maximize the space usage inside a 20” or 40” container.
3. Higher level of security and lower risk for damages due to less handling (Loading, Temporary Storage, Unloading) of your cargo.
Disadvantages of FCL shipping
1. Not cost effective unless your cargo volume is 15 – 20 cubic meters (Equals 50 – 70% of an 20” container).
Definition of LCL (Less than Container Load)
LCL is an international ISO standard referring to cargo owned by different consignees that are grouped together in one and the same container. LCL shipping enables importers to ship smaller amounts of cargo that’s not of a large enough volume to make FCL a viable option. At the same time it’s in general more cost effective than Air freight.
Advantages of LCL shipping
1. Offers a very affordable middle way for cargo too heavy for Air Freight, but insufficient in volume or weight to make an FCL shipment a non-viable option.
2. More convenient for Cargo Inspections & lower packaging material costs in case a repacking is necessary.
Disadvantages of LCL shipping
1. Higher price per cubic meter compared to FCL shipments
2. Often a non-viable shipping option for cargo volumes above 15 cbm (cubic meters) due to higher loading, unloading, handling & freight costs per cubic meter compared to FCL shipping from China.
Why LCL shipping is more risky and requires better export packing
It should be obvious to the suppliers that cargo worth thousands, or even hundreds of thousands, of dollars need protection during the long journey from the factory floor to the importers warehouse.
However, many suppliers in China, and other low cost countries, tend to neglect this and provide the buyer with low quality export packing that can result in damaging the cargo.
When shipping LCL from China, your cargo shares container space with cargo from other buyers. Sometimes as many as five or six different importers.
You have no control over the nature of the cargo which is loaded into the same container. LCL cargo must be prepared to withstand liquids, heavy weight, chemical fumes and sharp objects.
What is considered as “insufficient export packing”?
1. Damaged or Low quality cardboard boxes.
Only use boxes with a minimum of 5 layer cardboard or plywood boxes.
2. No freight pallets
Freight pallets are not always essential, but in events where an LCL shipment is requested it is strongly recommended as a mean to the minimize risk for separation of cargo during the different stages of transportation. It could also be that the cargo is simply too heavy to be loaded and unloaded by hand.
3. Damaged or Low quality freight pallets
Freight pallets come in different dimensions, qualities and materials. Loading 5 tons of cargo on pallet made with transporting bananas in mind is rarely a good idea. A damaged freight pallet is also dangerous for the cargo itself since shards of wood or plastic easily penetrates the cardboard boxes loaded on top of it.
4. Protective plastic missing
Many products are sensitive to damp and the month long journey from China to Europe is more than enough for mold to grow and spread.
Can I consolidate multiple LCL shipments into one FCL shipment?
Yes, and this is one of the few really good ways to save on the shipping costs. LCL is a lot more expensive, per shipped unit, hence, ‘converting’ to FCL shipping can save you thousands of dollars.
Buyers that order goods from multiple suppliers, and are currently importing individual LCL shipments, can buy to FOB terms and instruct the supplier to forward the goods to one and the same port of loading (i.e., Shanghai or Shenzhen).
From there, the forwarder can load the cargo in an FCL 20’’ or 40’’ container.
That said, this strategy requires a lot of coordination between the buyer and the suppliers, as one supplier running late results in all shipments being delayed.
Why is LCL shipping so much more expensive than FCL shipping?
The administrative workload is roughly the same, regardless of the cargo volume. Hence, the fixed cost is the same for both LCL and FCL shipping.
This is primarily reflected in the port charges price difference. A few examples follow below:
- FCL 20 Feet: $500 (Equals $13 per cbm)
- LCL 10 cbm: $1400 (Equals $140 per cbm)
- LCL 2 cbm: $600 (Equals $300 per cbm)
Hence, LCL shipping is still more cost effective for small shipments, as compared to FCL – but the cost per unit is far higher.
How can I better control the costs when shipping LCL from China?
As LCL shipping results in high port charges (as explained above), you need to confirm the port charges before shipping the goods.
If you ship according to CIF terms, the port charges are not included. To avoid an unpleasant surprise in the port of loading, order LCL cargo according to DAT or DAP terms, both of which include the port charges.
Is FCL faster than LCL?
In my experience, it can be a bit faster. I am not sure if that is established, but I would assume it is due to the following factors:
a. It may take longer to book LCL cargo, as several consignees are needed
b. LCL may receive a lower priority
When is LCL shipping the best option?
LCL is the best option for cargo that is too bulky and heavy for air freight, yet not large enough to make FCL shipping a viable option.
LCL is the best option for shipping cargo with a volume between 1 to 10 cubic meters.
When is FCL shipping the best option?
If the LCL cargo exceeds about 12 cubic meters (cbm), the total price (the sum of the freight cost port charges) are on par with an FCL 20 feet container.
This is despite the fact that the FCL container would be 70% empty.
Can all suppliers and freight forwarders offer LCL shipping?
That depends on the forwarder they’re working with, but most forwarders in China and elsewhere can offer LCL shipping.
Do you need help with shipping and customs?
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