Ocean LCL 101

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LCL stands for Less than Container Load. It is a term used to describe the transportation of small ocean freight shipments not requiring the full capacity of an ocean container, unlike FCL, or Full Container Load Shipments. When shipping LCL, a business pays for the shipment based in the cargo volume, usually measured in CBM or cubic meters. Unlike an FCL shipment where one would pay a flat fee cost to move a full container, regardless of how much cargo is filled inside.

Containers in LCL shipments are usually filled with many different businesses or shippers cargo to fill a full container. Whereas in FCL shipments, containers are filled with goods of only one party.

Think of FCL as taking your own car. You have your own space, and you drive directly from your home to work.

Now think of LCL as taking a bus or rideshare program. You'll have to go to a meeting point or a station to share a bus with a few other people. But the bus will still take you towards where you want to go at a much lower fee. In the case of LCL, the container would be similar to a bus, and the cargo freight would be like multiple people coming together.

The passengers of the bus essentially split the total cost by the number of seats that are available on the bus, rather than pay for the entire bus themselves. In LCL, the cost of cargo is determined by the space it takes up in the shared container, and this concept is also known by the term co-loading.

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The three most important factors that impact a business supply chain are generally, the product order or cargo size, the transit time for the cargo to move from its origin to destination, and of course, the cost of moving the cargo. For most enterprise level, big corporations, they typically have a very stable and solid fulfillment plan with their manufacturers or shippers, to ship large volumes of planned goods from origin to destination.

In this bigger, more mature end-to-end supply chain management models, FCL shipping is typically the most effective way to move regular, stable volume orders of freight, as the cost and transit time of full containers is most easily determined and forecasted. On the other hand, for mid-market or smaller medium sized business that's more inconsistent or smaller volume shipment schedules, moving goods via LCL tends to be the most method for shipping.

Many of these smaller businesses have a smaller purchase order of goods from their suppliers or shippers that don't occupy full containers. And they may not be able to delay their shipments to wait for more goods to be manufactured in efforts to accumulate orders into a FCL. So business also has the option to ship via air rather than via FCL or LCL. Airfreight is often more expensive, and air rates have a tendency to fluctuate it, causing more variability in pricing.

Thus, LCL is the most stable and reliable mode for moving freight for cargo goods that don't fill for a full container. To sum up why business may choose to ship LCL, here are the main benefits in shipping via the LCL mode. LCL is cheaper than air. This is due to two primary factors, fuel costs and market capacity. There is a lot more space available on massive container ship than the relatively tiny space of even the biggest airplanes.

LCL is more flexible. It allows clients to ship smaller quantities whenever cargo is ready, rather than needing to wait for enough product to fill for full container. And finally, LCL allows for cargo to dynamically move to different warehouses, rather than having a full container into one warehouse.

NARRATOR: In the initial booking stage, a booking will be placed by a shipper or consignee with their freight forwarder near the cargo ready date. The booking should contain cargo commodity information, cargo size and dimensions, the Port of loading at a container freight station or CFS, port of delivery, also to CFS, and final destination delivery details. And of course, a confirmed cargo ready date, so that the shipment is picked up in time to be consolidated with other shipment of the shared container. After booking, the cargo will be picked up and consolidated, an aspect of LCL shipping that differs from FCL.

Instead of having to make a stop at the port to pick up an empty container, a cardiff truck will be dispatched to start at the factory to pick up the cargo load. Then, the trucker would bring the cargo to a container freight station where the cargo will be consolidated with other shipment into a consol box.

After consolidation at the CFS, the consol box will be sent to a container yard near the Port of loading. Next, the container will be loaded into an ocean vessel for departure from the Port of loading. Here, the ocean carrier will make sure documentation is valid for the cargo on board in order to continue the shipment journey on the water.

The container is now on its way to the destination port. This phase of the shipment journey is similar to the FCL journey, in that when the vessel is about a week or a few days out from destination, the ocean carrier will send information or documentation required for clearing customs, picking the container up from port to then bring to CFS, and charges by the ocean carrier for the services rendered.

When the ocean vessel arrives at the destination port, the consol box is offloaded from the ocean vessel into the container yard at the destination port.

Next, the container will be picked up from the container yard to move to a nearby CFS.

After delivery to destination CFS, it's best practice to make sure the shipment is cleared for import.

While we're still at destination CFS, the cargo will be deconsolidated to prepare for final delivery.

Finally, a truck will be dispatched when the cargo is ready to be picked up from the CFS, where it will then usually be delivered to a business's warehouse.