LCL vs. FCL?
Less than Container Load (LCL) is another shipping term when various cargo shipments share the same container as well as the container shipping costs.
There are many reasons why LCL container shipping is chosen, such as;
- LCL Shipping is usually chosen when the there aren’t enough goods to fill up and entire container
- LCL shipping can allow you to lower your warehousing costs, that is, in the event you are stocking a warehouse until you are able to accommodate an FCL shipment, thus lowering your warehousing/inventory costs
However, it should be noted that the costs are higher for LCL, including insurance costs, as well as there may take longer than FCL.
FCL Container Shipping
Full Container Load (FCL) is a container shipping option where a container is exclusively used for a single shipment and the container is not shared with other cargo shipments, and the costs are borne by one party.
Even if the container isn’t enough completely filled to the brim with cargo, the shipping party can choose to still opt for it.
There are many reasons why they would choose to send as FCL shipments, such as;
- FCL shipping costs less than LCL. The cost of unit per freight is higher with LCL than FCL, and importing fees need to be paid regardless of the size of your shipment or choice of container shipment
- FCL shipments offer a faster lead time/delivery. As an FCL shipment include cargo that is meant for a single party and not shared, even if it stops at various ports, they do not need to be opened and reworked, and delays can be avoided.
- The freight forwarder will be able to bring a container to your desired address for you to load the goods into the container yourself
There are a number of advantages/disadvantages for both LCL and FCL container shipping.
If you are small to medium-sized company and do not have enough inventory to fill a standard container then it is recommended that LCL will be the most cost-effective method of shipping.
If you are a large company with enough stock to fill a full container then FCL transportation is the way to go.
When shipping cargo using FCL transportation you can improve the economies of scale and increase profits by reviewing your supply chain strategy to maximise on full container load advantages.
This could involve reducing the total weekly or monthly container shipments you receive in order to completely fill a container e.g. if you are shipping 14 cubic meters every month (LCL shipment), why not wait an extra month and transport 28 cubic meters in one shipment.
You could also consider increasing container size from a 20ft to a 40ft to further improve cost-effectiveness.
It’s important to discover all your available options and not become overly comfortable in depending on a single freight forwarder, shipping line, or mode of transport.