In ocean freight shipping, containerized cargo comes in two main forms - LCL (Less than Container Load) and FCL (Full Container Load). As their names suggest, LCL involves merchandise that takes up less than the entire space of a full container, which means having to share a container, and FCL simply means having an entire container to yourself.
Also known as ‘groupage’, LCL shipping essentially means grouping various shipments together in one container. Since this involves sharing a container, it is a little more logistically complicated and requires more and better coordination to ensure that everything goes smoothly and as planned.
When you decide to ship LCL, you will need to provide the dimensions and weight of your cargo to your freight forwarder. Documents and forms such as the Bill of Lading, commercial invoice, and cargo packing list must also filled in and submitted. Depending on your cargo type and destination port, additional documentation may also be required.
LCL shipments are usually shipped on a fixed schedule, either weekly or fortnightly depending on the destination port, so timing is crucial. Grouping of LCL cargo takes place at a warehouse, called the origin consolidation warehouse.
Your freight forwarder can arrange your cargo to be picked up, which is the more common practice. Alternatively, you can also delivery your cargo the the consolidator warehouse yourself. Keep in mind, however, that should you choose to do the latter, that your cargo needs to arrive well-prepared, packaged, and ready to be loaded. If preparing your cargo yourself, make sure to give our guide on how to calculate the volume of an LCL shipment with Tetris a read.
Whichever option you opt for, note that your cargo must arrive at the warehouse with time to spare. If the warehouse is located at/near the departure port, the cut-off date for your cargo to reach the consolidation warehouse is typically seven days before sail date. This varies depending on the location of the warehouse. With inland warehouses, given that more time is required to get the container to the port, the cut-off date will be earlier.
This is to allow for sufficient time to properly consolidate all the LCL cargo in the container. Do give our article on how to properly prepare an LCL shipment to guide you.
Once the LCL container is packed and prepared, it is then transported to the departure port as stated on the contract/booking. Port cut-off dates for containers are usually around three days prior to sail date. Once the consolidated cargo arrives at port, it is transferred into the hands of the shipping line and then shipped to the destination port.
If you’re shipping to a secondary port, your LCL cargo may be offloaded at a transshipment point, where it will either get transported to another container or wait for more cargo to fill the container before continuing to its final destination.
In layman terms, it’s similar to what happens to your luggage when you’re transiting at an airport. It will need to be offloaded from the plane in which you landed and transferred to your next flight.
Once the LCL container arrives at destination port, the freight forwarder’s destination agent takes over. He/she will collect the container and transport it to a warehouse called the destination deconsolidation warehouse. There, the cargo in the container is deconsolidated into individual LCL shipments.
At this point, the consignee can go to the warehouse to pick up the merchandise. Alternatively, you can have the agent handle delivery to the receiver, in which case your merchandise will be transferred from the destination deconsolidation warehouse to the final destination warehouse from which it will be delivered to you.
In general, LCL shipping does not take any longer than FCL shipping in terms of transit time if all goes well. It may even be faster if you’re lucky enough to secure a remaining space fit for your cargo at the last minute.
However, you may face delays while waiting for other shippers to get their cargo grouped and ready. Additionally, should any paperwork errors arise, delays are highly possible as customs may detain the entire container. As much as you’d hate to get held back because of the mistakes of another, you should make sure to get your cargo ready on time and make sure your documents are properly and accurately filled in.
Another delay issue that may arise is if you’re shipping to lesser-known ports. Most international tradelanes offer frequent and fixed sail dates. But having your goods sent to secondary ports means you may have to wait a couple of weeks for the next sail date, and then having to wait more for local feeders to transport your cargo from the main ports.
If your cargo is going through transshipment and/or intermodal transportation, delays are not uncommon. As mentioned above with transshipment, your cargo may need to be offloaded and transferred into another container or wait for other cargos to be loaded into your container. As for intermodal transportation, more logistics are required as your cargo will need to be transferred from the deconsolidating port to the inland terminal and onwards.
"The problem with these costs is that they’re often impossible to predict and are thus hardly ever considered when analyzing and comparing ocean freight rates"
Klaus Lydsal, vice president of operations at iContainers