So what exactly does LCL mean?
Like any industry, Freight Forwarding is full of awesome acronyms, which to the average jo public mean absolutely nothing. One of the more common phrases you heard getting thrown around is ‘LCL Seafreight’, but what exactly does it mean, and how does it work?
LCL means ‘Less than a Container Load’.. So, if you don’t have enough cargo to fill a whole container, you can still send it via LCL.
So, what’s the difference between sending something as LCL or FCL (Full Container Load)?
Well, as the shipping line cannot accept your LCL cargo on board their container vessel, the forwarder needs to pack or consolidate your cargo into a full container with other client’s shipments to send it as a FCL.
LCL Cargo is sent to a packing depot where this consolidation takes place, usually a couple of days before the container is due to leave for the terminal. Because the cargo needs to be properly packed with other shippers, the transit time allowed for LCL cargo is usually slightly longer than sending via FCL.
LCL Cargo doesn’t always stay in the same container either. If you’re shipping something in a non-direct consolidation service, occasionally the forwarder will unpack/repack at a transhipment port. Make sure you ask for a direct service where possible!
So when does my LCL shipment become more economic to send as a FCL shipment?
This really depends on where you’re Importing/Exporting your cargo to or from, but into Fremantle for LCL Cargo under FOB Terms you should cut off of around 10m3. This is where LCL becomes more expensive than FCL.
When setting the rate for LCL, consolidators will generally take the total cost to ship a container (Including Transport, Packing, and Unpacking) and divide it by the total usable volume. You can always ask MPW Supply Chain to do a full LCL vs FCL Comparison for you to calculate the most economical way to import your goods.
Once you exceed 10m3, you will start to notice the allocated cost for Port Service Charges and Terminal Handling Fee’s exceeds that for a Full Container. This is because the consolidator has to build in Unpacking and Wharf Cartage fee’s into that figure, so the larger the volume, the less cost-effective it becomes.
So how do I pack my LCL Shipment?
We highly recommend that when you ship something as LCL you don’t cut costs on packaging. Make sure your supplier loads your cargo on to either a treated timber pallet (To Australian Standards), or a Plastic Pallet. Shrink Wrapping and Corner protection is also highly recommended as you don’t want your cargo getting damaged in transit. As previously mentioned LCL Cargo often gets transshipped (Unloaded and Re-Loaded) en-route, so any additional handling increases the risk of damage. Correct and clear labelling is also essential. If your cargo cannot be stacked on top of, have your supplier provide clear labels to warn your consolidator.
My Supplier has offered Free LCL Shipping to Port, should I take it?
Based on my previous article, there is no such thing as Free Freight. Make sure if you receive a CIF/C&F/CFR quote from your supplier that you have them quote destination Port, Customs Clearance, and Delivery charges too. Often these charges under pre-paid terms can be excessively inflated.
What if my cargo is too big to fit in a container?
Check our handy container specifications guide to see if your cargo is too big to fit in a 20′ or 40′ Container. If it’s longer than 5.8m most consolidator will charge a ‘over length’ surcharge to make up for the increase in costs to ship a 40′ container instead of a 20′ Container.
If your cargo is too tall/wide/long, it will need to move via a break-bulk service on a special roll on-roll off vessel. MPW Supply Chain can offer pricing on request!
Ok, I have an LCL Shipment I want to send, what do I do?
MPW Supply Chain are both Import and Export LCL Specialists, so please get in touch today and ask for a quote. Even if you just have some questions about the process, feel free to phone us now and have a chat!