LCL Freight Shipping: Cost-Effective Solution For Businesses

Jan 19, 2023

Less-Than-Container-Load shipping, also known as LCL Freight Shipping, is a cost-effective way for individuals and businesses to ship goods internationally. 

LCL Shipping allows several parties to share the space of a shipping container. This reduces the cost of transportation for each individual shipper. Because there’s no need to fill an entire container, this type of shipping is ideal for small to medium-sized businesses

LCL freight shipping is commonly used in the international trade industry. This is a convenient option for those looking to save on shipping costs while still ensuring safe and timely delivery of their goods. 

In this blog, we will explore how this type of shipping works and considerations before getting an LCL freight shipping quote.

LCL vs FCL: Which Shipping Type Is For You?

Before we jump into the details of LCL freight shipping, let’s first discuss its counterpart: Full-Container Load Shipping.

Full-Container Load Shipping

In Full-Container-Load shipping, the shipper rents the entire container exclusively. This means that the shipper is responsible for loading and unloading the cargo and has full control over handling of goods during the entire shipping process.

This method of international transportation is suited for large shipments that can fill an entire container. This makes it cost-effective for businesses and individuals with high volume cargo. With FCL shipping, they also have more control over the shipping schedule compared to LCL shipping where the schedule and handling are all coordinated by the freight forwarder.

forklift lift container box loading depot

How Does LCL Freight Shipping Work?

The freight consolidation process of LCL freight shipping involves grouping multiple smaller shipments from different parties into a single container. 

The shippers will share the cost of transportation. This reduces the overall cost of shipping for each individual party. 

Are you considering using LCL freight shipping for your items? Here’s the breakdown of steps: 

  1. Book your shipment
  2. Prepare goods for shipping
  3. Consolidate your goods
  4. Drayage
  5. Shipping
  6. Deconsolidation
  7. Pickup or delivery

During the consolidation process, the freight forwarder will also ensure that each shipment is properly packaged and labeled. The necessary paperwork for customs clearance should also be complete.

The freight forwarder will then arrange for the container to be transported to the port of loading. There, it will be loaded onto a ship for transport to the port of destination.

At the port of destination, the container will be offloaded and the freight forwarder will arrange for the individual shipments to be delivered to the recipients.

Advantages of Less-Than-Container Load Freight

Cost-effectiveness for small or infrequent shipments

One of the main advantages of LCL freight shipping is its cost-effectiveness. 

Because it allows multiple parties to share the space of a shipping container, the cost of transportation is spread out among different shippers.

This means that individuals and businesses who are shipping small or infrequent shipments can save money compared to using FCL shipping. This also eliminates the need to fill an entire container themselves. This makes it cost-effective for small players that don’t have enough shipments to fill a whole container.

home delivery of box

Flexibility in terms of destination and route options

Another advantage is the flexibility it offers in terms of destination and route options.

Since LCL shipping allows multiple parties to share the space of a shipping container, this allows for more destination and route options than FCL shipping.

Because the cargo is consolidated with other shipments, it  can be shipped to destinations where there might not be enough cargo to fill a container. This allows shippers to reach more remote or less-served destinations.

Aside from this, the freight forwarder can choose the efficient and cost-effective route for the consolidated cargo.

This flexibility can be particularly beneficial for businesses and individuals who need to ship to multiple destinations or who might have a limited budget for transportation costs.

Reduced risk of damage or loss

LCL freight shipping offers an advantage in terms of reduced risk of damage or loss of cargo.

Because LCL shipments are consolidated with other smaller shipments, the cargo is handled fewer times during the entire shipping process. Thus reducing the risk of damage or loss.

This is different from FCL shipping wherein the shipper is responsible for loading and unloading the cargo. This step increases the chances of mishandling or damage to the items.

The freight forwarder takes the responsibility of handling the cargo during the consolidation process. It’s the company’s responsibility to ensure that the cargo is properly packaged, labeled and loaded into the container.

Also, the LCL shipping process is usually better supervised and managed by the experienced freight forwarder. They can provide more detailed tracking and cargo monitoring as it moves across the supply chain. 

This can provide shippers with more visibility and control over their cargo.

man checking pallets of items in warehouse

Considerations Before Shipping Less-than-Container Load Freight

Before shipping less-than-container load freight, here are some factors to consider:

Longer Transit Times

Because LCL cargo is consolidated with multiple shippers and then shipped in a shared container, expect to have a longer transit time for your cargo. 

Consolidating and de-consolidating as an added step in the shipping process can lead to longer transit times as the cargo may have to wait at the consolidation warehouse for other cargo to be added before it can be shipped.

Additionally, shipping LCL cargo takes time because it may be shipped on a slower vessel or on a less direct route than a full container load (FCL) cargo. 

This can make LCL shipping less attractive for time-sensitive cargo.

Possibility of Delayed Delivery

Another consideration in using LCL freight shipping is the possibility of delayed delivery. 

The cargo has to be consolidated at a freight forwarder or consolidation warehouse before being shipped, and then de-consolidated at the destination port before delivering to the final recipient.

Also, if any document or customs clearance is missing, it can cause further delays in delivery.

Importance of Careful Packaging and Labeling

Careful packaging and labeling is crucial in LCL freight shipping to ensure the safe and secure transit of cargo.

Proper labeling and documentation will ensure that the cargo is cleared through customs quickly and delivered to the final recipient in a timely manner.

Overall, proper packaging and labeling not only helps prevent damage, but can also help in smooth clearance and timely delivery of cargo.

workman at warehouse with orange helmet

Best Practices For LCL Freight Shipping

Choosing the Right Freight Carrier

When it comes to selecting a freight forwarder, it’s important to consider the carrier’s reputation for reliability, cargo handling and on-time delivery.

It’s important to consider the carrier’s routes and services - such as the shipping frequency and transit times. This is to ensure that they align with your shipping needs.

Consider also the carrier’s network and the voyage route, whether it will be a direct voyage or with transshipments. 

Cost is also an important factor when considering a carrier.

Compare sea freight rates from multiple carriers to get the best value for your shipping needs. 

Pro Tip: You can also negotiate with the carrier for volume discounts based on the frequency of shipping and the volume of your cargo.

Properly packaging and labeling your cargo

Before you ship, it is essential that each item is properly packaged and secured to prevent during transit. This includes using sturdy boxes or crates, applying appropriate cushioning materials, and properly securing the items with shrink wrap or straps.

Proper labeling is also important to ensure that your cargo is easily identified and sorted at the consolidation warehouse and destination port.

This includes clear and legible labels that indicate the shipper’s name and address, the consignee’s name and address, and any special handling instructions. 

In addition, labeling the fragile items, hazardous materials, and oversize items properly is highly necessary.

This will help in handling the cargo carefully and to avoid any delays.

effective communication with freight forwarder

Communicating Effectively with Your Freight Forwarder

To ensure a smooth and successful transit of cargo, consider effective communication with your freight forwarder as a best practice.

A freight forwarder acts as a liaison between the carrier and the shipper and is responsible for arranging the transportation of and logistics of your cargo.

Clearly communicate your shipping needs and requirements to your freight forwarder. This will help the company provide the most appropriate and cost-effective solution for your cargo.

If you have changed in shipping schedule or destination, inform your freight forwarder immediately. This will help them make necessary adjustments and ensure that your cargo arrives at its destination on time.

Finishing Thoughts

Now that you have learned about the benefits and considerations of LCL freight shipping, you can now make an informed decision in choosing which type of freight shipping is best for your shipping needs. 

While there may be longer transit times, consider carefully the biggest trade-off with LCL freight shipping. 

After all, your business needs the best cost-effective solution that matches your shipping needs.

robert lynch headshot

Robert Lynch

Founder of Australia’s largest outside hire company Couriers & Freight, Robert Lynch is a seasoned business leader in the shipping industry with over 20 years of experience. His expertise spans from outside hire, taxi truck, and last-mile services to freight management, freight forwarding and warehousing. 

Robert has also incorporated technology into his business through custom software to enhance growth and efficiency. Robert is a valuable resource for business owners looking to improve their logistics operations.

Connect with Robert Lynch on LinkedIn.

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