FCL and LCL sea freight products Prof .V.M.MOHAMED ALI

FCL and LCL are two of common terms used in shipping under  Export and Import  trade of International business.

What is FCL? If an exporter has goods to accommodate in one full container load, he books an FCL (Full Container Load) to stuff his cargo. In an FCL cargo, the complete goods in the said container owns by one shipper. In an FCL owned by one shipper, the cargo in the container need not have fully loaded cargo in the container. Let the cargo be half loaded or quarter loaded container, if booked by one shipper under one shipment, the said shipment is called FCL shipment.

What is LCL? Under an LCL cargo, where in a shipper does not have enough goods to accommodate in one full container, he books cargo with a consolidator to console his goods along with goods of other shippers. This type of shipment is called LCL shipment. The said consolidator arranges a fully loaded container (FCL), and consoles the shipments of other shippers and deliver each shipment to final destination by separating each shipment at final destination

Most buyers, however, simply buy what they need Most buyers, however, simply buy what they need. They don’t want to carry extra inventory that might not get sold. If they have, say, 22 cubic meters it is not a problem — it will nearly fill a 20′ container up. So they book an FCL (Full Container Load). Now, what to do if you only have 12 cubic meters of products to ship? Most freight forwarders offer to consolidate your shipment with those of some of their other clients. Each client books LCL (Less than Container Load), and then the forwarder arranges to put it all together in one container.

LCL is often in transit for a longer period of time, due to the freight company having to load and unload numerous companies’ items. It is also possible that your shipment will be delayed whilst the shipping company find enough items to fit the container. Another cause of delay, not mentioned in the CPG article, is the risk that other goods inside the same container are blocked by Customs. One regular reader tells me she saw cases where an importer lost his products completely this way (because Customs had a problem with OTHER products).

Insurance is more expensive When shipping by LCL you are likely to be paying more towards insurance then you otherwise would with FCL. Your cartons might get damaged If you ship soft goods, and your loose cartons (not on pallets) are placed aside/under heavy hard goods, your products might get crushed.

Uses of LCL When using LCL shipping services, you need not worry about returning the container after delivery. Because you are sharing the container, it is the concern of the shipping container service company, which is likely to have return trips booked for that LCL container. Shippers using LCL need be concerned only about the load being shipped and nothing else.

LCL is one of the most cost saving and time consuming way of international container shipping. For customers who don't have enough cargo to fill whole ocean container, LCL freight is the right solution providing Full Container Load frequency and service. LCL can drastically decrease shipping cost. We can provide you with space within ocean container and the sailing time will be the same when transporting goods LCL internationally. You will share the cost of whole container shipping with other customers, based on your cargo volume. Freight volume (cubic meter / cubic foot) is the most important pricing factor, forming the cost of your LCL shipment abroad.

To do this we first take the length, width, and depth of each piece and add from 2-10 centimeters to each dimension. We add the 2-10 cm to the size of the pieces to allow for packing and framing. Once we get the total volume of the piece or pieces you are ordering we divide the total volume by 1,000,000. We get the 1,000,000 figure from length 100 cm multiplied by width 100 cm multiplied by Depth 100 cm . note* there are 100 cm in one meter, thus there are 1,000,000 cm in a cubic meter. Example 1. Item #widget 12 Quantity 1 Size 75 x 50 x 90 cm Let us assume that this item is fragile so it will need very good packing and framing. To insure that we are able to pack this very well we will add 10 cm on to each side of the object. The new shipping size of Item #widget 12 is 85 x 60 x 90 cm. 85 x 60 = 5,100 5,100 x 90 = 459,000 459,000 / 1,000,000 = 0.46 or 46% From this example we know that widget 12 will occupy 46% or about half of a cubic meter. Since there is a minimum shipping volume of one cubic meter for LCL there is an extra 54% of a cubic meter that can be used.

FCL gets delivered more quickly than LCL When an FCL shipment arrives at port, it’s unloaded from the vessel and delivered to the buyer. It’s more complicated for LCL: someone has to consolidate different shipments, process multiple documents per container, and then sort goods for each customer. Every point could be delayed. At origin, the cargo has to be grouped together to fill a container. At destination, there’s a greater risk of examination by customs: When one shipment in a container gets flagged, every shipment has to be checked. That can cause delays of days.

Multiport LCL consolidation Through our global LCL gateways in either Singapore or Colombo, Kuehne + Nagel can consolidate shipments from multiple countries and vendors for efficient onwards global transportation - offering defined country shipments or a hub solution for multiple delivery countries

By doing this you can benefit from the following; Pulling stock holding together to assist in agile or lean inventory management decisions. Optimised transportation costs by combining shipments to either LCL or FCL. Reduced distribution costs through direct delivery from the gateway to alternate global delivery points. Offering improved load factors in full container shipments Opportunity of combining LCL for onwards transportation to reduce delivery and handling costs Simplified pricing and cost management Regular, reliable, fixed sailings and services.

Benefits of Consolidating Shipments There are multiple benefits to consolidating your shipments overseas. Reduce Transportation Costs – Just as many companies combine domestic shipments in the US into a truckload, the same holds true for consolidating container shipments at the point of origin. You are also reducing shipments by increasing the amount of product you ship within one full container. Reduced Labor Cost – Much of the work that is performed in the U.S. to consolidate shipments can be done overseas for a much lower labor cost. You can accomplish the same for less. More control – By having a consolidator who knows the lay of the land, you have better control over the local vendors. The consolidator can act as your eyes and ears in country. Become Demand Driven – By maintaining fewer inventories in the domestic distribution center and keeping it at a consolidator overseas helps you better meet supply based on the demand from the consumer. This provides increased flexibility. Sustainability Efforts – By consolidating shipments overseas, you are reducing the number of times you ship. Not only does this reduce costs,  but it also reduces a company’s supply chain carbon footprint.

Multi-Country Consolidation (MCC) Multi-Country Consolidation (MCC) involves receiving goods at our warehouses in each country, shipping to a single port hub, and consolidating into full container loads. MCC movements throughout local and global infrastructures. Options include re-handling at port hub to make FLCs for the final destination, waybills covering the entire journey, and a range of value added services. MCC can offer increased efficiency with lower costs compared to multiple LCL shipments, flexibility, time gains (especially on smaller orders), and reliability through scheduled departures from hub ports, and easier final destination deliveries.