FCL or LCL—What Works Better For My Cargo?
As a stakeholder in a retail distribution or a manufacturing company, it’s your top priority to ensure that your expenditures and costs for logistical operations provide you with economies of scale to profit from your business. It’s also your primary priority that the cost-effective logistical operations deliver consignments in top condition and in a timely manner.
Whether you choose an FCL (Full Container Load) or and LCL (Less than Container Load), depends on the size and type of your consignment.
An LCL is recommended when your cargo load is below the threshold of weight or quantity at which freight rates apply. An FCL is booked by shippers whose cargo is enough to fill a whole container and is booked exclusively by them.
Advantages and Disadvantages of LCL
Typically, the rates for shipping a full container load are quoted at a lesser price as long as it meets the requirements of a minimum volume. Shippers whose consignment does not meet this criterion are unable to take advantage of these rates but can ship their cargo via boxed or palletted options through an LCL.
Simply put, an LCL allows you to pay for the space that your cargo takes up in a container. It proves to be advantageous since you are only charged for the volume of your shipment as opposed to its weight. The remaining space on the container is made available for other importers and exporters who wish to ship their cargo that also fulfills the LCL criterion.
An LCL is a viable option for you if you are a small to medium company and have the resources to pick and drop the cargo at the warehouse where it is loaded and unloaded. It eliminates the use of a middleman to transport your cargo to its final destination. The time of transit during an LCL is the same as when shipping a full container load.
There are, however, some drawbacks to choosing an LCL. Containers are often subject to cross-examination by custom officials when they arrive at the destination port. When the customs official examines the crate or box, the entire contents of the container are also checked. The costs assigned for this process are shared by all the consignees of the shipment container.
Furthermore, even though the transportation time for an LCL is the same as that of an FCL, an LCL shipment may be delayed by 1 or 2 days during the processing, loading and unloading time of the container. An LCL consignment may also be subject to damage if the other cargo in the consignment is not properly packaged into the container.
Advantages and Disadvantages of an FCL
FCLs are a highly cost-effective logistical solution—especially in comparison to air freight— for the transportation of cargo that is over 15 cubic meters. It allows for a faster transit period than LCLs as there is less handling involved and it limits the chances of any unforeseen delays. Since the cargo is handled less, it also ensures the safety of your cargo during the shipment process.
Cargo shipment using FCLs allows you to achieve larger economies of scale and increase profitability through reviewing your supply chain strategies. Opting for an FCL also enables your business to increase the container size from 20’ ft to 40’ ft thereby enabling you to ship more cargo with fewer costs.
There are however, drawbacks to an FCL as well. Shipping using an FCL is not advantageous or effective unless the shipment is larger than 15 cubic meters in a 20’ ft container. FCL shipments are loaded into the container directly from your factory or by your supplier after which it is shipped to your destination through a lorry. This entails a labor intensive process at the end of the business to unload and unpack the container, so businesses choosing an FCL should account for these costs before making the logistical decision.
There is no straightforward answer to which shipping option is best for your cargo. Your choice depends on the size and type of your shipment. Our team at CSI can help advise you the best container transportation method for your logistical needs, along with helping you address warehousing, consolidation, customs and documentation queries.
You can get in touch with us for further details and request a free quote.