A Complete Guide to LCL Shipping

LCL shipping means Less-than-Container-Load, and it is when your goods do not fill an entire shipping container. As the name implies, your goods are less than the standard container, thus giving room to load other shipper’s goods. LCL is a cheaper freight shipping method (compared to FCL shipping), and this article is for you if you are considering LCL shipping for your business.

By the end of this article, you will understand everything about LCL shipping meaning, including LCL shipping rates and the pros and cons of this shipping method. We will also answer the difference between FCL and LCL and some tips for a successful LCL experience.

Let’s get into it.

What is LCL shipping?

The shipping industry has standard containers for shipping: the two main types are the 20ft container and the 40ft container. When shipping your goods, you can use any of the two containers for your shipment, but what happens when your cargo doesn't fill up the entire 20-foot or 40-foot container? This is where LCL comes in.

What does LCL mean in shipping? In simple terms, it describes cargo loads that are not large enough to fill a 20-ft or 40-ft shipping container. With this type of freight shipping, you can ship loads that occupy less than a full container. LCL shipping is less expensive because the freight company will combine your order with goods from other shippers.

In other words, LCL shipping is a shipment method that involves sharing a container with other shippers’ goods. LCL is a more economical method for shipping a small volume of goods since you get to combine your delivery with other consignee orders.

What does LCL mean in shipping?

Records show that there has been a high demand for LCL shipping since 2020 due to COVID-19 and the rise of the e-commerce industry.¹ LCL in shipping is the short form of Less than Container Load. This term, as mentioned earlier, is a method of freight shipping where the load does not require the entire capacity of a standard container. LCL shipping is also called consolidated shipping because it involves the addition of other shippers’ goods so that the container can reach its total capacity.

How does LCL shipping work?

When your goods fill up a 20ft or 40ft container, you will be the sole consignee of the container. However, when your goods can’t fit the entire container, other shippers will get to use the remaining space for their goods. This is exactly how LCL shipping works. The freight carries a container of different consignees into a single shipment, and then the goods are shared when they arrive at the destination port.

If your goods cannot fill up a container, LCL shipping is a better option for you. Since different shippers share a container, they share the cost, too, which makes LCL shipping cheaper in most cases.

When to use LCL?

LCL is a popular shipping method among many buyers due to its many benefits. Also, with containers costing 5 to 6 times more than they were in 2020, you’ll need to find a cost-effective way to ship your goods.² If you are shipping goods that won't fill up a container, you should consider using LCL shipping to save money. Some of the other things you should consider before you use the LCL shipping method are:

1. Volume: It is best to consider an LCL shipping method if the volume of your goods is between 1 and 18 cubic meters. This volume of goods will not fill up an entire container, so using a whole container will not be economical. You can calculate the volume of your goods by multiplying the length by width and height.

2. Product category: Some products, such as dry ice and aerosol cans, are not suitable for air freight. For this reason, ocean freight, especially LCL, is a better alternative for goods you can't ship by air due to airline restrictions.

3. Weight: Besides the volume of your goods, you also have to consider the total weight of your shipment. LCL shipping is best for goods with a gross weight of more than 150 kg to 200 kg.

4. Routing: Another thing to consider before choosing an LCL shipping agreement is the route. If the freight won't be using your route due to multiple shipments, then it’s best to consider an alternative route.

LCL shipping costs

LCL shipping rates depend on factors like the volume of your goods, the destination of your shipment, the time of the year, and the shipping company. The primary thing that determines the shipping costs of your LCL shipping is the volume, which is the amount of cubic space that your goods will take up. Therefore, the more volume your order takes up, the more money you will pay. LCL shipping rates also depend on factors like loading, deconsolidation, time of the year, and delivery, but these have less bearing than the volume.

What does an LCL price quote include?

An LCL price quote often includes the shipping costs of your goods from the origin to the destination and other shipping handling fees. Some additional costs often included in LCL price quotes include customs bonds, taxes, loading, delivery, and labeling. An LCL price quote also consists of the costs to load and unload your goods into the container. It’s best to contact reputable freight forwarders or logistics companies to obtain quotes before shipping your goods.

How is LCL freight calculated?

One of the major things to consider when calculating LCL freight is the volume of your goods. To calculate an LCL shipping quote, you need the volume (length, width, and height) of your cargo (measured in cubic meters) and the size of the container. The standard container is usually 20 feet or 6.1 meters.

Once you have the measurement, you can use this formula to calculate your load volume: Length x Width x Height = Cubic Meters.

Your shipping price will depend on the number of CBMs in your LCL shipment.

You can also use an online LCL shipping calculator to get an idea of how much it will cost you to ship your volume of goods via LCL. Some shopping companies have an LCL shipping calculator to help you do this. Otherwise, you should consider messaging the company to request a quote.

Benefits and drawbacks of LCL shipping

Before going ahead with LCL shipping, it’s best to weigh the benefits and drawbacks to help you decide if it’s right for you. Let’s look at some of the pros and cons of the shipping method:

Benefits of using LCL shipping

• Cost efficiency of LCL shipping

  One of the top pros of LCL shipping is the cost. Multiple shippers will share the total cost of a container, which makes shipping fees smaller. LCL shipment is cost-effective and less expensive than FCL shipping, making it a great option, especially if you are shipping smaller loads. You will only be paying for the volume of goods you are shipping and not the flat rate as with FCL.

• Flexibility in LCL shipping

  Another benefit of LCL shipping is that it offers shippers more flexibility when it comes to scheduling and routing. Also, this shipping method is suitable for everyone and everything, whether it’s a small parcel or a trunk of goods.

• Greater control

  More often than not, FCL shippers have to wait until their goods fill a complete container before they start shipping. With LCL, you can begin shipping as soon as you have your goods ready. This gives you greater control over sending your goods whenever you want instead of waiting for one container to fill up.

• Less inventory management

  Since the volume of goods in LCL shipping is lower than in FCL containers, there is less inventory management in the warehouse. Also, shipping fewer goods means spending less on inventory warehouse space.

• Easier to find

  During peak shipping periods, it is easier to find LCL shipments than it is to find FCL.

Drawbacks and limitations of LCL shipping

No shipping method is perfect. Here are some cons of LCL shipping

• Extra handling time

  LCL shipping is slower than FCl shipping due to delays caused by the fact that different people use the containers. Goods shipped with LCL also require more handling during loading and unloading compared to the FCL solution. In addition, you can't decide what other type of people or cargo you will be sharing one container with.

• Risks of damage and loss

  LCL shipping involves more handling during the shipping process, thus increasing the risk of damaged or lost goods. There is also a high risk of contamination, spillage, and logistical issues. If you are shipping very fragile or dangerous goods, it’s better to use the FCL method.

• Delays

  Because you are sharing your shipment with other consignees, you can experience customs delays, which may affect your shipping deadlines. Also, LCL shipments need to be loaded and unloaded often, which may add more days to the journey.

FCL vs LCL shipping: Key differences

Ocean freight is a critical part of the supply chain worldwide. About 80% of goods in the world are transported by shipping.³ FCL and LCL are both methods of shipping goods internationally via the oceans.

Now, FCL vs LCL shipping.

LCL shipping, as explained earlier, is freight shipping where your goods do not fill up the container, so they are consolidated with the goods of other shippers. In other words, LCL describes a container filled by multiple orders.

FCL or Full-Container-Load involves shipping your goods only. In the case of FCL, you ship an entire container full of your goods. You have the sole use of the container, and you will not be sharing it with other shippers.

Some of the differences between FCL vs. LCL shipping include:

Volume of goods: FCL means you have the sole use of one container, so other shippers’ goods will not be added to yours. LCL shipping, on the other hand, means you are shipping your goods with other shippers since your shipment is less than the space in the container.

Shipment size: FCL shipping is best for large shipments, while LCL shipping is more suitable for smaller goods that won't take the entire container. If your shipment contains one or a few parcels, it may be cheaper to send it via an LCL shipment.

Cost: In the case of LCL, you pay for the space your shipment will take, while FCL means you will be paying for the entire container.

Strategies for successful LCL shipping

LCL is an excellent option for businesses who want to save money on shipping or want to ship small loads across the globe. Some of the tips to ensure your products arrive safely and on time are:

Optimizing packing

It is essential to invest in great packaging for your LCL shipping to ensure the safety of your goods. Depending on the kind of goods you are shipping, you may need packaging materials like sturdy boxes, crates, and bubble wraps to keep them protected. Once you’ve got the right packaging material, you need to secure and seal your shipment using great packing tape.

Label correctly

Another essential thing to consider when shipping via the LCL method is labeling. Ensure you use correct labeling with visible details to prevent mixing it up with another consignee's goods. Some of the details you should add to your boxes include:

• Name of shipper
• Name of the consignee
• Content of your shipment
• Country of destination
• Booking reference number
• Freight receiver's contact details

Choosing the right partners

Another thing to consider when shipping an LCL shipment is the shipping company. Make sure you research different freight forwarders and logistics partners to find one that will offer the services you need.

Technology Integration

You should make sure you work with a company with technology integration that can allow you to track your shipment and monitor its progress as it reaches its destination. This will make it easy to identify and resolve any issue that might arise during shipment.

FAQs

What is LCL meaning in shipping?

LCL stands for “Less than Container Load.” It is a method of sea shipping where the goods don't fill an entire container. In this case, your goods are lumped with other shippers’ goods in a single container. Once the goods arrive, they will be unloaded, separated into individual shipments, and delivered to the respective owners.

How does the cost for LCL shipping determine?

The cost for LCL (Less than Container Load) shipping relies on different factors, including the volume of the cargo, the weight of the goods, the time of the year, and the origin and destination of the shipment. LCL shipping rates may also include additional service charges like customs clearance and taxes. Rates may also fluctuate based on market conditions, season, fuel costs, and shipping company.

What is the difference between LCL and FCL shipping?

LCL (Less than Container Load) shipping involves sharing a container with other shippers to get your goods to their destination. FCL (Full Container Load) shipping is where you rent a whole container for your goods alone. You are the sole owner of the container, so the shipping company will not consolidate your goods with other shipments. FCL is best for large shipments, and it has faster delivery times since you won't be sharing the container space with anyone else. LCL is cost-effective and more suited to smaller shipments.

What should be considered when choosing LCL shipping?

Some of the things to consider when choosing LCL (Less than Container Load) shipping include the type of goods, product category, routing, reputation of the shipping company, and the estimated transit time.

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