Less than Container Load (LCL)
What Is Less than Container Load (LCL)?
Less than container load (LCL) is a shipping method where freight from different vendors is consolidated into one container for cost-effective transport. The shipments belong to multiple parties, each with separate bills of lading (BoL).
How LCL shipping works
Consolidation
The LCL shipping process starts with the consolidation of cargo from multiple shippers at a freight forwarding facility. The cargo is stored in a single container and each shipment is carefully organized and documented. Since the shipments come from different vendors, the freight forwarder is responsible for package labeling.
Shipping process
Once the container is full, it is sealed and loaded onto the vessel. The consolidated container is then shipped to its destination, following the standards set by the chosen Incoterm outlined in each BoL. During transit, the shipments remain separated so they can be easily identified upon arrival.
Deconsolidation
After reaching the destination port, the container is unloaded and each shipment is separated according to its documentation. The goods are then prepared for separate deliveries to the final point.
Comparison with full container load (FCL)
- In FCL (full container load) shipping, goods from one supplier take up the entire container space. In LCL shipping, smaller shipments from multiple vendors share space in one container.
Advantages of LCL shipping
- Cost savings: Allows shippers to pay only for the space needed within a container, making it more budget-friendly for smaller consignments.
Disadvantages
- Longer lead times: Takes longer for goods to reach their destination due to additional steps at origin and destination ports for consolidating and separating shipments. Moreover, any customs issue with a single consignment can delay the entire cargo.
When to choose LCL shipping
LCL shipping is a common choice for businesses looking to ship internationally while not having enough cargo or time to wait to fill a whole container. This method allows freight forwarders to combine smaller shipments from other vendors, increase the frequency of deliveries, and saving on transport costs.
It’s best to choose LCL when you want to transport low-value goods more frequently under FOB or CIF Incoterms. Small businesses often choose this option as they may not be ready to commit a significant amount to shipping costs associated with FCL or air freight. It is also a viable solution for companies facing space constraints during peak shipping seasons.