Updated on June 21, 2023
Among the many shipping methods available in today’s competitive landscape, less than container load shipping (LCL) service is a cost-effective alternative that offers more predictable and speedy transit times to distribution hubs across the United States. It is making headline news across the country and worldwide as more shippers discover the benefits of LCL ocean transportation. Rather than forcing shippers to accumulate enough cargo and delay shipments until a full container capacity is reached, the shipping option allows for greater flexibility and freedom with partial container shipments.
Less than container load shipping services benefit ocean freight shippers and logistics managers in several ways. By its very nature, ocean freight has its own set of built-in obstacles and is prone to certain disruptions that must be accounted for in any shipping plans. Adaptability and flexibility are often enough to handle some issues, such as cargo rollovers, demurrage fees, port access bottlenecks, and scheduling conflicts. Other disruptions can be planned for but not controlled. For ocean transportation service providers, seasonal capacity highs and lows, as well as somewhat predictable weather patterns, can also impact shipping scheduling and choices.
The Atlantic hurricane season can throw even the best planned route into chaos and cause delays and problems for shippers. At some point, it might be better to send smaller shipments more regularly than risk delays of days or weeks...or worse—losing an entire load to a storm. Beneficial cargo owners and other shippers and carriers must carefully consider all possible factors when choosing whether LCL shipping options are right for their current needs.
To fully understand and appreciate the benefits of less than container load transportation, one must understand how modern LCL shipping services, like those available from FreightMango, work.
The shipping method known as less than container load is a specialized ocean freight transportation mode where goods from multiple shippers are organized and consolidated within one container. Shipping managers typically use LCL shipping in import and export situations where cargo volume from individual shippers is insufficient to fill a container fully.
An essential aspect of LCL shipping involves combining multiple shippers' cargo at a centrally located point of origin and transporting them together to a destination. This method helps to reduce rates and helps maintain capacity levels while also keeping shipping lanes from becoming overcrowded. This mode of transportation helps reduce costs for shippers, as they pay only for the amount of container space used.
If their cargo load fills half a container, they pay half the price of the container fees when using less than container load shipping. If they needed only a third of the space, they would split the cost with other shippers and pay a third of the total cost for the container. This is particularly helpful for smaller businesses or first-time importers who are just testing the waters or for those who are established but operate on much smaller volumes and capacities than some other players.
That is one of the greatest benefits of LCL shipping — it can be used by anyone and offers benefits to large and small shippers alike, depending on their current situation or needs. LCL transportation services help shipping and logistics managers keep pace with the ever-changing needs of consumers and shifting market trends.
When a company needs to move a small number of items or work with products that are considered low volume due to their small size, LCL shipping will likely be the best choice. Small start-ups and small-scale shipping companies often have small orders and deal with smaller and lighter items. Shipping a load of 2,000 phone cases or laptops takes up less space and weight capacity than transporting 500 washing machines or a couple of cars.
These smaller orders can easily be combined with less than container load-based shipping to pack multiple orders together in one container. Rather than each shipper paying for a full container they can never hope to utilize, they can combine their resources, reduce their overall price, and often accelerate speed to market in the process, according to Greg Knowler of JOC.com. Ultimately, whether to use less than container load shipping remains an individual choice each shipping manager must make. LCL shipping can serve as a valuable tool to help cut costs and improve delivery time and accuracy. Still, it must be applied to the right situation to be beneficial and impactful.
LCL shipping prices are calculated based upon the volume of space needed to occupy within the container. According to Logistics Management, many of the biggest shippers and transportation companies take advantage of the LCL shipping option. They have learned how to incorporate the unique services provided by LCL transportation and maximize its potential. It sounds simple enough, but there is a little more complexity to it.
For example, it is important to understand the amount of volume shipped for a given price. Logically, the more volume occupied inside the container, the more it will cost to cover that needed space. However, it takes a surprisingly significant increase in volume to change the less than container load rate price. It is possible to double the shipment volume before there is any real noticeable increase in the price.
The reason for this plays off the same situation where shipments under a particular volume lose most or all of their cost-effectiveness when shipping with less than container load for sea freight. These are known as the minimums and generally represent the minimal volume that a cargo container can hold where the shipping rate would be cheaper than using some other method. Cargo ships are enormous and contain thousands of containers, with many vessels topping out with as many as 25,000 containers per load. This translates to abundant available cargo space, meaning a lot can be shipped with every trip, so it's cheaper than other modes of transportation.
However, this is where the “minimums” come in and can affect rates and fees, according to CNBC. If the total volume falls below the set minimum rate charge, less than cargo load shipping is not necessarily the most cost-effective option. For example, if the minimum space a shipper will pay for in a container is 1cbm (100cm x 100cm x 100cm). So, if the shipment consists of just one small box of cables or phone cases that measures 20cm x 20cm x 20cm, that minimum fee will still be applied.
This means the shipper will still end up paying for five times the volume of what they used. So, while LCL shipping is a safe, secure, and affordable way to ship loads that would not fill up an entire cargo container, there is such a thing as the load being too small to make less than container load a viable option. This is why careful planning and analysis are important when considering this shipping method. With the right application and usage, it can make a tremendous impact on costs and overall profits.
While the premise is relatively straightforward, there is a certain degree of complexity to the actual workings of less than container load shipping. A few key details shippers need to keep in mind include:
Dedicated shipping agents work to organize load arrangements with suppliers and coordinate the timeline for a specific shipment. This helps take some of the pressure off the shippers themselves and allows for faster and more efficient scheduling.
Based on goods, destination, and timeline, it is determined which container ship offers the best solution for that particular shipment. Detailed planning accommodates current shipping needs and freight capacity.
The goods then get delivered to a warehouse and preparations begin for final transportation to the port of origin for shipment. They are sorted, inspected, packaged, and prepared as needed so they can safely be loaded into their designated container.
The warehouse management team will load the items into a shared container alongside the cargo from other customers using LCL shipping. This shared location is where final preparations and checks are made before the final loading process begins.
The container then gets sealed and taken to the port, loaded onto the ship alongside all the other containers, and shipped off at the scheduled time. Monitoring and tracking are in place, so real-time status updates and notifications can be sent and received.
The ship will make its journey to the destination port, where all the containers are unloaded and sent to a local warehouse. This again is usually a shared warehouse location where less than container load cargo gets unpacked.
At the warehouse, the goods will be unpacked from the container and separated according to the shipper and final destination. At this time, initial inspections will identify any obvious signs of damage or missing cargo.
All customers, fees, declarations, and other necessary paperwork will be handled, and the goods will then be released for final shipment. The dedicated shipping agents will ensure all papers are filed and recorded according to legal requirements.
Final delivery coordination and timing are mutually agreed upon. The goods are delivered to the final destination, signed for, and accepted. Final payments and terms are settled and the goods are officially released and ready to be used.
The goods are then used, distributed, or sold as needed, just like with any other shipment of goods. The LCL shipping process has been completed successfully.
While it seems complicated with steps involved, less than container load options offer an excellent opportunity for smaller shipments to be on the move quicker. Less than container load shipping helps save money and reduces waste. Controlling the number of containers moving and the overall number of trips conserves fuel and reduces pollution.
LCL shipping involves goods packed into a shared container alongside multiple orders and customers’ items. On the other hand, full container load shipments happen when a shipper rents all the space inside the container. As is common in transportation and shipping management, there are pros and cons to everything. Some of the benefits to shipping FCL, as opposed to LCL shipping, include:
FCL shipments do not necessarily have to be loaded and unloaded together with other freight, which can help minimize loading and unloading delays and optimize transit time.
Sealing containers at the factory right from the start, rather than keeping them open during initial transportation to pick up additional loads, means less handling and less opportunity for damage.
Shipping with less than container load options also means faster transfers at the port as there is less chance for inspections and customs to slow things down with only one shipping slip to inspect.
The price per unit on LCL can get a bit exorbitant when capacity gets close to a full container load, so paying the FCL flat fee may save money for more prominent and bulkier shipments.
Here are some drawbacks of shipping full container load instead of less than container load:
Moving larger quantities means that shippers have to find, secure, and pay for more inventory space, and a large order may be delayed because a few boxes could not be accommodated with FCL.
FCL will probably be more costly for small loads, and it can also become more complicated to schedule things like pick up and delivery with such large loads and capacity in play.
Drayage costs can become a bit problematic with full container load shipments, as there is much more load to move. This will require more equipment and more man-hours or more trips to complete.
Delivering a full container usually requires specialized equipment and dedicated personnel to load/unload containers that can weigh tons apiece, something not every facility can readily accommodate.
While both FCL and LCL are valid options for shippers who need to find available capacity for their goods, less than container load shipping is usually the best option for most small and medium-sized shippers.
These two common and essential shipping modes are actually two sides of the same coin. FCL and LCL are available to shippers and provide versatility and scalability when it matters most.
The ability to adjust shipment modes and methods based on capacity volume and what specifically is being shipped makes the entire process easier for shippers and logistics managers. Knowing how to strategically leverage both of these valuable options can help transportation service providers maximize efficiency and maintain a competitive advantage in any market situation.
While LCL shipping offers obvious benefits to shippers, onboarding new systems and managing a new shipping process can present a real challenge to transportation service providers and managers. Working with a dedicated team of cargo shipping experts and utilizing a digitally managed freight marketplace allows for better management of international shipments, notably less than container load shipments.
Less than container load service providers can offer several benefits that cannot be attained elsewhere:
Lower cost: LCL shipping remains among the most cost-effective options for smaller shipments and small to medium-size providers. This versatile and scalable shipping option provides a less expensive alternative to other transportation methods such as air and FCL. It requires less overhead investment and usually incurs fewer fees, so it's an excellent option for shippers who need to watch their budgets and who have tight limits to their expenditures.
Improved flexibility: The way less than container load shipment is arranged helps to enhance overall flexibility within shipping services, scheduling, pricing, and protocols. LCL loads reduce shippers' inventory investment and allow more scheduling flexibility and faster and easier adaptability to disruptions and changes that occur during shipping. It's easier to adjust shipments and accommodate rush orders, business needs, last-minute customer requests, and other situations that FCL shipping cannot handle effectively.
More control: With LCL shipping, shippers can pick up and drop off cargo directly from the warehouse where they are loaded and unloaded, cutting out other entities and ensuring shipments reach their destination. This keeps the control in the hands of the shippers themselves and makes it easier to adjust and adapt as needed. Changes can be made in real time to account for consumer needs, market trends, and any disruptions that may arise during the transportation process.
Additional benefits shippers can enjoy by utilizing less than container load shipping options, according to JOC.com, include:
Simplified pricing options for straightforward quoting, budgeting, and invoicing.
Real-time tracking and status updates for the duration of the shipment.
Dedicated team to handle all logistics, planning, documentation, and customs.
Shipping features that specifically deal with LCL shipping.
Complete shipment visibility from end to end with real-time reporting.
Specialized platforms and dashboards for easy coordination and collaboration.
All-in-one access to everything related to a shipment and tracking details.
24/7 access to customer service for customized and individual services.
Less than cargo load shipping has revolutionized ocean freight transportation services. Innovations within ocean freight shipping have also made it easier than ever for transportation service providers of all sizes to provide in-demand services for shipping and finance to their customers.
LCL shipping has become a significant game-changer in the global supply chain and transportation market. When a company needs to move items of limited quantity and volume, LCL transportation is the best choice in many cases. Thanks to the adaptability, scalability, and visibility available with less than container load shipping, this mode of ocean freight transportation is increasingly popular among shippers.
With smaller start-ups and small-scale shipping companies, less than container load features open doors for better shipping services and more competitive pricing than ever before. Maximizing shipping efficiency and capitalizing on profits by reducing expenses and boosting returns remains a critical aspect of global supply chain and transportation management.
Taking advantage of the flexibility and scalability of less than container load shipping with a collaborative partnership can help streamline the entire process. Sign up with FreightMango today to discover the benefits of LCL shipping and take transportation services to a whole new level.