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Things You Need to Know About LCL Shipment

2023-12-22
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Things You Need to Know About LCL Shipment

Now more and more businesses choose to directly source from China. When shipping goods from China to your country, you need to carefully compare different shipping methods and calculate the cost. If the total volume is not enough for a full container, LCL shipment maybe a good option.

What is an LCL shipment?

LCL (Less than Container Load) refers to a shipment that doesn't fill up an entire container. An LCL container load consists of multiple orders from different shippers. In contrast, a full-container load occupies the full container.

If your cargo is not large enough to take up all the space of a shipping container, why book a full container? Instead, you can use LCL and pay for what you use. Your LCL shipment shares container space with cargo going out to other shippers.

How does LCL shipment work?

Grouping of cargo makes logistics a bit more complex and requires more consolidation to move things according to plan. Here's what the LCL shipping process looks like -

Booking of an LCL

Engaging freight forwarders is much more convenient than working directly with a shipping company. The freight forwarder will take care of shipping for you. You'll need to fill in and provide the bill of lading, commercial invoice, cargo packing list and other documents and forms.

Arrangement for pickup

LCL shipments are shipped out at fixed intervals of a week or fortnight. So, your products should be ready on time to be picked up. Your freight forwarder will arrange transportation to their warehouse where your products will be consolidated with other cargos. Finally, the freight forwarder will load all the goods into a container.

Transfer to port

The container moves along to the port of departure. Cut-off dates for containers are usually three days in advance of the sail date. After the consolidated cargo arrives at port, the shipping company takes charge of it. The cargo then makes its onward journey to the destination port.

Arrival to destination port

Upon its arrival to the destination port, the container is collected by the freight forwarder's agent and transported to the deconsolidation warehouse. There, the cargo is separated into individual LCL shipments, and your products will be transported to your premises.

Advantages of LCL shipment

1. Cost-effectiveness: LCL consignments allow smaller businesses or those with lower shipment volumes to access international markets without the need to bear the costs of a full container. They pay only for the space occupied by their goods within the shared container.

2. Flexibility: LCL deliveries offer flexibility in terms of shipment size. Exporters can ship smaller quantities of goods without waiting to accumulate a full container load, reducing inventory holding costs and improving cash flow.

3. Global reach: LCL loads provide access to a wide range of destinations around the world. Exporters can send their goods to multiple consignees in different locations using a shared container.

4. Reduced risk: By consolidating multiple shipments into a single container, the risk of damage or loss during transit is minimized. The goods are securely packed and handled by professionals to ensure their safety.

5. Environmental sustainability: LCL deliveries contribute to more efficient use of container space and reduce the number of partially filled containers. This optimization helps lower carbon emissions and promotes greener transportation practices.

Disadvantages of LCL shipment

The cost of LCL per unit is higher to account for the additional logistics and management of shipping multiple orders in one container. As this shipping term involves combining freight from different suppliers, there's a risk of contamination and spillage.

Upon their arrival, LCL shipments undergo deconsolidation. Packages can be mixed up or misplaced with other shipments. The deconsolidation process itself takes a bit of time. For this reason, LCL shipments spend more days in transit compared to FCL.

When to consider LCL shipping?

When you're starting small

Before selling anything on Amazon, you need to determine market demand and sales potential. After you've identified a market or niche, you may still wish to start small first and then ramp up orders from your Chinese manufacturers. LCL is better suited for small orders during early stages of your business.

When you serve a small market

If you have no need for large consignments because you serve a smaller group of customers, LCL shipments can be more economical. They are also justified when you're entering a new market and testing the water to see if actual sales match demand or sales potential.

When you need to split shipments

If you're delivering to multiple Amazon FBA facilities, then LCL is the better option to split your shipment rather than sending out multiple full containers.

What factors to consider for LCL shipping?

Shipment cost

The cost to ship your goods is obviously a key factor in deciding between FCL and LCL shipment. There is no golden rule on the volume at which FCL is more cost-effective than LCL. FCL is preferable for volumes over 13 m³ even though the shipment may not fill up the entire container. For lower volumes between 2 and 13m³, LCL will likely be the cheaper option.

Security

As a low volume shipment is compactly packed, it does not move around in the container. But the security aspect is worth noting when you're transporting cargo that is more sensitive to movements and may be affected due to contact with other cargo in the container. If there is a risk of cargo damage or contamination from mixing it with other merchandise, then you may want to think twice about using LCL. An FCL shipment could be the better option as there is no mixing of cargo.

Shipping time

Depending on how soon you want your shipment, consider how much time each shipping mode will take to bring your cargo to the warehouse at your destination. FCL is faster and better for urgent shipments. If you need your merchandise before a fixed date, FCL is better.

Sailing schedules

FCL services offer fixed weekly sailing schedules. You can have your products delivered soon after they've come off the production line. It takes longer time for LCL considering the extra time spend at sea until they reach your destination.

Some things to note:

- Ensure your cargo regardless of whether you use FCL or LCL shipment. In case your cargo gets damaged in transit, shipping insurance will compensate for any loss or damage incurred.

- Pay attention to the information you fill in documents that need to be provided to customs. Any errors in paperwork can delay shipment. In a worst-case scenario, customs may detain the entire container. Unfortunately, this can arise from no fault of yours but due to the mistakes of other shippers. From your side, make sure to have the cargo ready on time and paperwork filled out correctly.

However, it's important to note that LCL freights may have longer transit times compared to full container shipments due to the additional steps involved in consolidation and deconsolidation processes.

Delays to consider in LCL shipment

Customer clearance issues with documentation, inspections, or China to USA import duty assessment.

High volumes of cargo or operational issues at the port can lead to congestion, resulting in delays in unloading and loading containers.

Severe weather events such as storms, hurricanes, or heavy snowfall can disrupt shipping schedules and cause delays.

Labor strikes or disputes involving port workers, customs officials, or transportation personnel can disrupt the normal flow of cargo and cause delays.

Availability of containers, chassis, or other shipping equipment required for loading and unloading can sometimes be limited, leading to delays.

It's important to note that these delays can vary depending on the specific circumstances, shipping routes, and current conditions in the logistics industry. If you have a specific LCL shipment in mind, it's advisable to contact the freight forwarder for more accurate and up-to-date information.

Summary of key points

- LCL is often the first choice for loads of less than 13m³ and for anything above, FCL is chosen.

- Consider the nature of the cargo being shipped. Fragile or temperature-sensitive cargo that can be damaged from being consolidated with other cargoes should be shipped in an FCL.

- LCL should be packed compactly and securely to reduce risk of damage from the movement aboard the vessel. If you happen to be sending fragile merchandise, the label should mention this fact clearly.

It's important to work closely with a reputable freight forwarder and ensure clear communication throughout the process. They will guide you through the specific requirements and details about importing from China, helping you navigate the complexities of international shipping.

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