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Starting June 1st, 2023 Our warehouse fee will be $0.65/cubic foot per month

In effort to lower the warehouse storage fee during inflation, we have went narrow aisle racking.This construction took us four months but the project is finally completed. With narrow aisle racking, we are able to drop storage by 24%.We as partners will go through this inflation together.

Starting June 1st, 2023 Our warehouse fee will be $0.65/cubic foot per month

In effort to lower the warehouse storage fee during inflation, we have went narrow aisle racking.This construction took us four months but the project is finally completed. With narrow aisle racking, we are able to drop storage by 24%.We as partners will go through this inflation together.

Blogs/education-series

10/30/2023

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Deciphering FCL and LCL: Choosing the Right Shipping Method

    What is the main difference between FCL and LCL shipments? Which cargo storage option should you choose that suits your needs and the status of your goods? To help you understand the definitions, benefits, and clear direction of these options, Worldcraft Logistics will provide a comprehensive overview in the following article.

    1. What is FCL and LCL?

    What is FCL and LCL mean

    What is FCL and LCL mean? An FCL/LCL contract, often referred to as "pier/house" in the realm of ocean freight shipping, entails the consolidation of packages into a container for subsequent delivery to multiple recipients upon arrival at the destination port. The FCL/LCL contract makes use of two distinct containerization methods:

    • FCL (Full Container Load): In this scenario, the client's merchandise is transported within a fully loaded and securely sealed container.
    • LCL (Less than Container Load) or grouped shipment: When the client's goods fail to occupy an entire container due to their limited quantity, the cargo from various clients is amalgamated into a single container.

    In addition to the FCL/LCL approach, there are alternative shipping arrangements:

    • FCL/FCL: The shipper's goods are placed within a container and subsequently delivered to a single recipient.
    • LCL/FCL: Packages from multiple shippers are consolidated into a single container for delivery to a solitary recipient.
    • LCL/LCL: Packages from several shippers are combined into a single container and are later separated at the destination for individual deliveries to multiple recipients.

    1.1 Benefits of FCL detail

    You have the option to provide specific instructions to the shipper regarding the loading of your container, or alternatively, you can take charge of the cargo loading process yourself.

    Once the container is loaded, it is transported to the port and subsequently loaded onto a cargo vessel. Shipping companies typically operate with scheduled departures from and to major ports worldwide, ensuring a well-organized logistics network.

    Upon reaching its destination port, the container is carefully unloaded, and your goods are then delivered to the designated consignee. Full container transports are often integrated into an intermodal system, which involves the use of multiple transportation modes in the supply chain journey, spanning from the point of origin to the final destination. This may encompass various methods, including the use of trucks, trains, and, when required, even aircraft to expedite the shipping process.

    The advantages of opting for FCL (Full Container Load) cargo are multifold. First and foremost, it minimizes the risk of damage or loss during transit. Additionally, FCL shipments tend to have a faster transit time due to the shipping lines' ability to offer complete control and oversight of the entire shipment process, ensuring efficiency and reliability.

    1.2 Benefits of LCL detail

    Benefits of LCL detail

    LCL (Less than Container Load) serves as a versatile and cost-effective option for transporting smaller shipments that aren't time-critical between major ports worldwide. This adaptable shipping method caters to a wide range of cargo sizes, from small parcels to more substantial consignments. The primary advantage of LCL is its ability to set your goods in motion as soon as they're ready, eliminating the need to wait until you've accumulated enough cargo to fill an entire container.

    It's crucial to note, however, that with LCL shipments, you won't have control over the other types of cargo sharing the container with your goods. This shared space can sometimes lead to unexpected delays, as the container is utilized by multiple parties, and the scheduling of shipments can vary.

    To mitigate these uncertainties, many shipping companies offer fixed departure schedules with guaranteed cargo space on key routes. This ensures that your cargo will be transported on specified dates, enhancing predictability and reliability for your shipments. These services are particularly valuable when time sensitivity is a concern or when you want more control over your cargo's transit.

    Other logistics industry terms you may be interested in:

    2. What is the difference between FCL vs LCL in Shipment?

    The key distinction between FCL and LCL lies in the allocation of container space. In an LCL arrangement, the buyer shares container space, while in an FCL agreement, the buyer rents the entire container. To assist you in comprehending and making informed choices between these options, we've prepared a table that serves as a valuable resource for determining the shipping method that best aligns with your requirements.

    3. How do you choose Between FCL and LCL

    How do you choose Between FCL and LCL

    When selecting an ocean freight arrangement, a shipper should take into account a number of factors. When selecting whether to employ FCL or LCL, factors other than cargo volume must be taken into account. We've compiled the table below to help you make decisions and to better understand how FCL and LCL shipments work.

    3.1 Shipment’s Volume

    • FCL: Regardless of volume, any cargo may employ the FCL arrangement. However, if the entire volume of the shipment is 15 CBM or more, it is preferable to think about renting a full container.

    The most typical container sizes for FCL shipments are listed below, along with an estimate of their capacity:

      • 20' - 33 CBM
      • 40' - 67.5 CBM
      • 40' HQ - 76 CBM
    • LCL: Although the minimum billable volume is 1 CBM, it can be utilized for shipments of as little as 1 CBM or less. Note: If the shipment is less than 1 CBM and the charged weight is less than 200kg, it is also suggested to look at air possibilities. LCL is the best option for shipments with less than 15 CBM in volume.

    3.2 Shipment’s Weight

    • FCL: The maximum permitted weight varies depending on the container size and is always indicated on the container for guidance. The maximum load varies depending on the country. The maximum payloads for the standard container sizes are listed below.
      • 20' - 18.6 tons
      • 28.6 tons for 40' and 40' HC

    The maximum gross permissible cargo weight in the US varies by state; the safe payload weight per container is listed below:

      • 20' - 17 tons
      • 41 tons for 40' and 40' HC.

    The shipper is required to transfer the remaining cargo to a different container after the maximum weight has been reached. 

    • LCL: A CBM may hold a maximum weight of 1 ton (or 1,000 lb). If the weight of the shipment was greater than the permitted load, the chargeable weight would be determined by the gross weight. (For instance, if a 1 CBM load weights 1,300 kg, the chargeable weight will be 1.3 CBM rather than 1 CBM.)
    • LCL shipping is more cost-effective than air freight for small shipments weighing more than 150 kg but less than 1 CBM. This is so that airlines can base their charges on the greater of a shipment's gross weight or volumetric weight.

    3.3 Freight Cost

    Freight Cost Between FCL and LCL

    FCL: Cost-effectiveness in FCL shipments typically occurs with cargo volumes of approximately 15 CBM. There isn't a specific volume threshold at which FCL becomes less expensive, as rates vary according to the shipping route. The cost per CBM of container space (obtained by dividing the maximum load capacity by the container's ocean freight cost) isn't always lower than LCL. Nevertheless, the overall cost for a full container load can be more economical because FCL comes with fixed local charges per container.

    LCL: Smaller loads, usually below 15 CBM, tend to be more budget-friendly when shipped via LCL. For loads exceeding 15 CBM, the overall cost may rise depending on the chosen route. Furthermore, LCL often incurs higher local fees compared to FCL. If your shipment falls within roughly 2 CBM of the 15 CBM mark, it's advisable to explore the full container load option for potentially better cost-efficiency.

    3.4 Speed

    FCL: Typically, FCL shipments enjoy a shorter total transit time than LCL because containers are unloaded from the vessel and delivered directly to the final destination.

    LCL: In contrast, LCL shipments may require a minimum of four days or more for the total transit time compared to FCL. This extended duration is due to the additional time needed for unloading, sorting, and deconsolidation. Furthermore, if customs selects any single consignment within the same container for inspection, the entire container will be subject to customs hold.

    3.5 Security and Damages

    Security and Damages between FCL and LCL

    • FCL: Opting for Full Container Load (FCL) offers a significantly reduced risk of cargo damage, theft, or loss. This is due to the container's direct route with a single consignee, with the added option of insurance and container loading inspections to bolster security.
    • LCL: Conversely, Less than Container Load (LCL) shipments carry a heightened risk of damages, theft, or loss, as the container is shared with other shipments. Buyers can mitigate this risk by purchasing freight insurance as an additional layer of protection.

    3.6 Trackability

    • FCL: Tracking is relatively straightforward, as the entire container is under a single consignee. You can monitor the vessel or container's location using the House Bill of Lading information, and your freight forwarder can provide a shipping plan estimate.
    • LCL: Tracking is a bit more complex. You can track the vessel and container using the Bill of Lading data, but tracking ends when the container reaches the port or when the cargo is unloaded. Additionally, tracking for LCL shipments may not always be accurate, especially when there are multiple handlers involved. In such cases, your freight forwarder can offer more information and assistance.

    3.7 Split Shipment

    Split Shipment Between FCL and LCL

    • FCL: While you have the option to divide your shipment under an FCL agreement, it's essential to carefully consider your choices to maximize cost-efficiency. When splitting an FCL shipment, you introduce additional steps like transporting the container to a warehouse, incurring warehousing fees, labeling charges, sorting expenses, and additional loading and unloading fees, along with delivery costs. To ensure you're making the most economical decision, it's advisable to seek guidance from your freight forwarder.
    • LCL: In the case of LCL shipments, splitting your deliveries to different destinations is more straightforward because the entire container goes to a warehouse for sorting. If your shipments are destined for locations that are widely dispersed, LCL may prove to be the more cost-effective option, depending on the overall volume. This flexibility allows you to divide the load and choose different ports based on the respective delivery points.

    3.8 Delivery Appointments

    • FCL: Occasionally, the approval process for delivery appointments of FCL containers to fulfillment warehouses can be more time-consuming than that for LCL deliveries. This is a challenge some shippers encounter when sending their goods to Amazon FBA.
    • LCL: Depending on the destination, booking deliveries with fulfillment warehouses can be more straightforward for LCL shipments than for larger volume loads, as the smaller size of LCL shipments makes the process more manageable.

    3.9 Booking a Container Space During China Holidays

    • FCL: Due to the heightened demand for shipping in the lead-up to significant Chinese holidays, like the Chinese New Year, securing containers for a Full Container Load (FCL) shipment can be a challenging task.
    • LCL: Conversely, booking space for a Less than Container Load (LCL) shipment can be more convenient ahead of extended Chinese holidays in comparison to FCL. LCL consolidators take advantage of this demand by efficiently utilizing available space, enabling numerous shippers to share containers and reduce the risk of shipping partially empty ones.

    3.10 Amazon FBA

    Amazon FBA Between FCL and LCL

    • FCL: When shipping with FCL, the carrier will arrange for a scheduled delivery appointment at Amazon's warehouse. The standard practice is to palletize the cartons using pallets that meet Amazon's requirements in the country of origin before they are loaded into a container. Pallets can be added either by the supplier or the freight forwarder. It is highly recommended that the supplier takes care of palletizing to avoid potential delays and extra charges associated with warehouse sorting and palletization.
    • LCL: In the case of LCL shipments, the carrier will also coordinate a delivery appointment at Amazon's warehouse. Cartons are typically palletized according to Amazon's specifications during the deconsolidation process, prior to the shipment being sent to Amazon's warehouse.

    3.11 Local Charges

    • FCL: Local charges for FCL shipments are typically flat fees, billed on a per-container basis. These costs are generally more economical than those associated with LCL shipments.
    • LCL: LCL shipments are charged based on the volume (cubic meters or CBM) of goods being shipped. The rates encompass local charges at both departure and arrival ports. It's customary to incur higher local charges with LCL shipments compared to your previous FCL shipment.

    3.12 Customs Clearance and Customs Exam

    Customs Clearance and Customs Exam

    • FCL: Customs conducts random inspections of containers, and it's important to note that the possibility of a container being inspected exists, even if you consistently ship the same product along the same route. The expenses associated with the customs examination, as well as any port or warehousing fees incurred during the inspection, are the responsibility of the buyer. This is why it's advisable to always factor in the potential cost of a customs examination when planning your shipment.
    • LCL: When it comes to clearing customs, there's no distinction between LCL and FCL shipments. However, one challenge with LCL shipments is that if customs flags a single consignment for examination, the entire container must undergo inspection. This examination can range from a simple X-Ray scan to a thorough inspection by the Contraband Enforcement Team (CET). Given the increased number of consignees in a single container for LCL shipments, the likelihood of an examination is higher.

    The expenses associated with the customs examination, along with any relevant warehousing and port fees, are distributed among all consignees sharing the container.

    4. FCL vs LCL price: Which is cheaper?

    Navigating the disparities between FCL and LCL shipping can be quite daunting for buyers. The common query that often arises is which of these methods is more cost-effective. Unfortunately, there is no straightforward response to this question, as several variables come into play. The primary factors to consider include shipment volume, the chosen route, the timeline, and associated costs.

    FCL vs LCL price: Which is cheaper

    While LCL offers the advantage of accommodating smaller shipment volumes, the overall freight expenses, encompassing local charges, tend to be higher on a per cubic meter (CBM) basis when compared to FCL. Therefore, it is advisable to regularly compare LCL and FCL pricing, particularly when the CBM reaches a significant threshold. As a general guideline, if your shipment approaches approximately 15 CBM, it's prudent to consult your freight forwarding company for rates on both LCL and FCL, and meticulously assess the freight costs, transit times, and any potential ancillary charges that might arise throughout the logistics process. Possessing a fundamental understanding of shipping principles and relying on a dependable freight forwarder can prove highly advantageous for buyers when it comes to selecting the most suitable method for shipping their products.

    5. FCL and LCL in other modes of transports

    FCL and LCL in other modes of transports

    The terms FCL (Full Container Load) and LCL (Less than Container Load) are commonly employed not only in maritime shipping but also in trucking, rail transport, and air freight. For instance, in trucking, forwarders utilize comparable terms such as FTL, which stands for 'Full Truckload,' or LTL, signifying 'Less Than Truckload.'

    To thrive in today's dynamic market, shippers can reap significant advantages. To enhance their understanding of supply chain management and operations, they can delve into the latest industry trends and hot topics by exploring the following articles:

    In conclusion, whether you're a seasoned shipper or new to the field, the choice between Full Container Load (FCL) and Less than Container Load (LCL) can have a significant impact on your supply chain and operational efficiency. By weighing factors like shipment volume, costs, timelines, and your specific needs, you can make informed decisions that benefit your business. This article of Worldcraft Logistics recognizing that these terms are not limited to sea transport but extend to other modes of transportation like trucking, rail, and air freight, allows you to adapt your strategy across various logistics scenarios.

    Arthur
    Simon Mang

    Digital Marketing/SEO Specialist

    Simon Mang is an SEO and Digital Marketing expert at Wordcraft Logistics. With many years of experience in the field of digital marketing, he has shaped and built strategies to effectively promote Wordcraft Logistics' online presence. With a deep understanding of the logistics industry, I have shared more than 300 specialized articles on many different topics.

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