Sea freight shipment is exerting a wide influence on global trade since it can turn the economical and efficient long-distance transport into reality. It is estimated that sea transport takes up 70%, a significant part of the international transportation of goods.
The relatively low cost has put sea transportation in a favorable position. Even though there has been a gushing increase in ocean freight prices due to the outbreak of the Covid-19 virus in the past two years, shippers still show a preference for it. Carrying goods by sea remains their primary choice.
Container shipping is one of the freight methods in terms of sea transportation, including two different modes: FCL and LCL. These two are worth some digging and pondering if you want to optimize the way you send your cargo by sea.
In this article, we will clarify the difference between FCL and LCL, making it easier for you to make a wise choice. Once you know whether to book an FCL shipment or an LCL one, you are one step closer to moving your cargo smoothly.
FCL stands for Full Container Load. If a shipper books an FCL shipment, it means that the full container space is occupied, so the shipper does not have to share it with other shippers'goods.
In the case of an FCL shipment, a shipper has to bear the cost of at least one entire container. The total freight rates are measured by the number of containers rented.
Under the FCL agreement, the container is booked exclusively by the shipper. As a result, the FCL delivery turns out to be much faster because the logistics management process is simplified. If your goods need to get to the destination ASAP, go with FCL.
Also, it is the shipper's ultimate responsibility to load, stow and count the cargo before transferring the container to a vessel. When the shipper finishes preparing the packaged cargo, the container will remain unopened until a consignee signs necessary receiving documents or until it has to go under inspection by Customs. So the risk of cargo damage or cargo loss can be minimized.
The deciding factor between FCL and LCL shipments is the shipment volume. Being familiar with sizes, dimensions, and the maximum gross allowable cargo weight of shipping containers will help make things go easier. Below we list the most common container sizes for FCL shipments, their loading capacity, and the shipment’s gross weight respectively:
● 20GP: 28CBM/18,000 kg
● 40GP: 58CBM/26,000 kg
● 40HQ: 68CBM/26,000 kg
● 45HQ: 86CBM/29,000 kg
LCL refers to Less than Container Load. A rise in smaller shipments has led to a steadily growing demand for LCL options. For shipments with a volume not large enough to fill up a container, LCL will work better and cost less.
As for LCL, it means the container rented is staffed with goods from multiple different suppliers. Shippers only have to pay for the exact space they use, so the freight charge is usually cheaper. However, the overall cost is based on the shipping route and other factors.
LCL consignments usually have to go through multiple handling and different trans-shipment ports when in transit. Additional time is required, which may delay the arrival of goods.
Goods shipped by LCL are usually sorted and loaded by carriers. When goods arrive at the CFS (Container Freight Station) of their destination, they will be delivered to the consignee respectively.
As an importer or exporter, which shipping method works better for you? You should make your choice after taking the following factors into consideration:
● The shipment volume
● The transit time
● Specific requirements of certain goods
3.1 The Shipment Volume
The shipment volume refers to the capacity of goods taking up. The total freight rates of shipping by FCL are calculated by the number of containers rented. In comparison, the LCL freight rates are measured based on the space occupied in one container. When your cargo takes up less volume than a container, it is more economical to opt for LCL since you have to pay for the entire container if you go with FCL.
However, it is also worth noting that LCL requires sorting, unloading, and de-consolidation at each Container Freight Station (CFS), a warehouse where import and export shipments are consolidated or de-consolidated. Service fees associated with using the distribution facility need to be paid. So in order to reduce your costs, you can go with FCL rather than LCL when your shipment volume can almost fill up a container.
In general, when the packaged cargo can hardly take up half of the container volume, you had better opt for LCL for lower costs. Otherwise, make your decision between FCL or LCL.
Here are some cases you can use as references:
Q: For cargo with a volume of 6 CBM, which one will work better?
A: LCL is more suitable for low-volume shipments like this.
Q: For shipment with a volume of 60 CBM, which one will work better?
A: It can almost fill up a 40 HQ container, so FCL will be an ideal option.
Q: Which one to choose in order to handle shipment with a volume of 35 CBM?
A: Its volume exceeds what a 20 GP container can accommodate but is far below the volume of a 40 GP container. It is advisable to use a combination of FCL and LCL shipments. Choose FCL consignments to fill up a 20 GP container, and what is left can go with LCL.
In fact, what a container can actually accommodate will be mainly affected by the dimensions of the cargo and the way it is loaded.
Besides, shippers should pay attention to the cargo weight. When the shipment’s weight exceeds the allowable load, then the chargeable weight will be based on the gross weight.
Rulings on the maximum allowable load vary from country to country. If the shipment’s weight exceeds the allowable load, there remains a possibility that the shipping company will refuse the cargo.
3.2 The Transit Time
FCL and LCL are different modes of container shipping. They all serve the same purpose of transporting packaged goods to their destination, but the total transit time differs owing to the different handling procedures. FCL shipments only contain cargo from one shipper, so there is no need to unload or de-consolidate. Consequently, the total transit time is usually shorter.
As for LCL, the grouped cargo needs to be taken to CFS at the port of load for consolidation and then to CFS at the port of discharge for de-consolidation. The whole process is sure to take time. If the cargo comprises some complicated components, then it will take much more energy to handle.
In addition, all the documentation required in the Customs Clearance need verification. If one consignment in the container gets chosen by Customs, the whole container has to undergo inspections. That is why LCL shipments are more prone to delays in the total transit time.
3.3 Specific Requirements of Certain Goods
When choosing between FCL and LCL, specific requirements of certain goods are to be reckoned with. Fragile goods, live cargo, and iced products need to be handled with more care. Since some kinds of goods are more sensitive and susceptible to changes and movements, every loading and unloading will bring a higher risk of cargo damage or cargo loss.
For valuables and special goods, it is advisable to go with FCL. The entire container travels a direct route with one single consignee, reducing the exposure to all kinds of risks.
In this article, we have walked you through some main differences between FCL and LCL shipments. We advise that you balance the total cost with the speed of the logistics process. As for the actual costs generated in the transport, there is no fixed answer. You should take some factors into account, such as the volume and weight of your shipments, the local charges, and the relative documentation fees. Pay attention to sea freight price fluctuations and check the spot freight rates. Whether you consider them beforehand will determine how good an option it is for you.
FCL and LCL all have their own benefits and drawbacks. You can weigh the cons against the pros before reaching a final decision. We hope you can conduct international trade smoothly by choosing the most suitable sea freight arrangement.
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