Demystifying LCL Shipping: An Essential Guide for Small Shippers

What is LCL?

The two standard container sizes used in the shipping industry are TEUs (twenty-foot equivalent units) and FEUs (forty-foot equivalent units). You can choose the LCL service if your goods are lower than the required standard units. Less-than-container load (LCL) does not demand a particular volume to transport. In LCL shipping, containers are loaded and transported with multiple orders and goods from several clients. Whereas, FCL shipping is transporting an entire container of goods from a single client.

What is Groupage?

The term “Groupage” denoted a group of cargo collected from different exporters or shippers and consigned to the corresponding importers or buyers as a Full-container -load in a single shipment. The cargo is dispatched from the same port and may be delivered to the same or different ports. This method of multiple LCL shipping is known as “Groupage Operation” or “Cargo Consolidation”.

The Advantages of LCL

If you frequently ship smaller quantities of goods, using LCL is obviously the best option for you and it has the following benefits:

1. The cost of LCL shipping is charged in accordance with volumetric weight (the space that is used/equivalent weight). Therefore, the shipments are less expensive and cost-effective than air freight or FCL (Full-container-load).
2. LCL shipments are more flexible in the case of shipping small quantities. You can consign LCL whenever you need and don’t need to wait until a container gets filled whole.
3. Frequent shipping of small-scale commodities minimizes the overhead costs including warehousing.
4. LCL shipments could be easier to track down than FCL during times of peak demand.

Importance of Packing

Being transported with various matchless commodities, the LCL shipments require extra care and protection. If the packing is fragile, then the goods are likely easily to be damaged. In general, corrugated cardboard is used to manufacture the carton for shipping. Packaging cushions and bubble films are also used to keep the cargo secure.

Labelling for LCL cargo

Labelling is another crucial necessity. Labels with the address of the consignee and clear handling instructions guarantee that the cargo arrives at the destination safely and is not mixed up with other items. Instructions on the label also help the staff to handle the goods carefully. For instance, “Fragile goods”, and “ Right side up” instructions make the staff keep an eye on them.

Necessity of Palletization

Palletization is the act of stacking goods on pallets (a transportable flat platform made of wood or plastic). Palletization is strongly recommended before shipping cargo especially, in the case of LCL shipping. Palletizing cargo makes forklift operations easier and the loading process faster. It also prevents damage to goods due to scraping each other.

Required Documents for LCL shipping

Almost all the documents that are needed for FCL shipping are also required for LCL shipping.

• Bill of lading
• Packing list
• Commercial invoice
• Dangerous cargo certificate ( If necessary)
• Certificate of origin
• Insurance certificate

LCL Shipping Cost Factors

The cost of LCL is mostly determined by volume, typically measured in cubic metres (m3). In other words, the cost increases as the volume of the LCL shipment increases. There are also some other factors that influence the cost. They are:

• Weight and dimension of goods
• Size or shape of goods
• Risk of damage or pilfering
• Requirement of refrigeration or any other special considerations.

In conclusion, LCL shipping offers a cost-effective solution for small and medium-sized businesses that cannot afford to fill up an entire container with their goods. With LCL, businesses can consolidate their cargo with other shippers, which significantly reduces the shipping cost per unit. However, it is important to choose a reliable freight forwarder who can handle the consolidation process efficiently and ensure that the cargo arrives at its destination on time and in good condition. Additionally, businesses should carefully consider the transit time and potential delays that may arise due to the consolidation process. With careful planning and execution, LCL shipping can be a viable and cost-effective option for businesses looking to expand their international trade.