What are FCL and LCL? | LOTUS Containers
Containers are a convenient way to ship cargoes in bulk quantity overseas destinations. Over the years, their usage in the logistics and supply chain industry has been proved to be immensely significant. With increasing LPG (Liberalization, Globalization & Privatization), more and more goods started to be transported from one country to another. Every day tons of cargoes are being loaded and unloaded offshore to supply the goods to meet the demands of the people at large. Depending upon the cargo size, there are different options available for shippers through which they can load their cargo in containers and set them off for shipment. Shippers tend to choose the most significant way to ship their cargoes that could cost them less while offering quality. Considering various factors like cargo size, weight, distance to be travelled, shippers find ocean shipping cheaper and easier. Apart from being the most versatile mode of transportation, ocean shipping also offers reliable ways like- FCL (Full Container Load) & LCL (less than a Container Load). What is FCL? FCL (Full Container Load) is a way of shipment in which the entire container space is used by a single consignee. The shipping container is solely used for a single shipment and does not
share its space with other consignee’s goods. It comes to be more secure and simplifies logistics as the container will not be opened multiple times to unload the goods of other shippers. FCL is considered best if a shipper has to ship cargoes that takes up the entire space of the box. Working of FCL or How does FCL work? As mentioned above, in FCL, the goods of a single shipper are loaded in a container and set off for transition. The products are claimed by one consignee. Even if the cargo is left with enough space after loading, the carrier company holds no right to adjust other shipper’s cargo in it. Although it doesn’t make sense to leave space vacant where space could be used for other’s goods. But for security point of view, some shippers do not want to take the risk by sharing the space with others and hence pay individually for the entire container space. Why go for FCL? There are multiple reasons for which shippers opt for FCL. In terms of price: Though FCL seems to be costlier because you may think in terms of paying for the entire container. But that’s not indeed true. In the shipping industry, you pay according to the unit per freight. And in FCL, the cost of unit per freight is less than that of LCL. That is why it doesn’t matter even if you take up the space of a full container, it will cost you cheaper than LCL. To know how? Keep reading till LCL. In terms of speed: Shipping through FCL is faster than LCL. Since the container handles single consignee’s goods, the cargo is loaded one time at the port of origin and unloaded one time at the port of destination. Apart from this, no extra loading and unloading take place in between. Multiple loading at multiple locations eats up a lot of time causing delay to the final shipper. Hence, if you’re looking for faster delivery, FCL could be the best option for you. Flexibags: For goods that need to be packed in flexibags are advised to be shipped through FCL. Since flexibags do not offer a uniform top, the stacking of other cargoes is hindered. Therefore, flexibags loading is offered only by FCL. Other costs: Transportation and insurance costs for FCL are low as compared to LCL. This is because FCL has a lower likelihood of damaged goods as the container just contains a single consignee’s goods and is not opened multiple times. The container travels directly to the one who’s assigned to receive them while in LCL the container has to travel various ports for the distribution of other shipper’s goods. In FCL, the transportation and insurance cost, both get reduced. What is LCL?
LCL (Less than a Container Load) is a shipment way in which a container is composed of goods of more than one shipper. It is used when the cargo does not occupy the full space of a container. Many times, shippers have cargo which is much less than the size of a full container. In such a scenario, he opts for LCL that allows him to load his goods alongside the products of other shippers. The smaller shipment that needs to be sent economically and is less time-sensitive is shipped through LCL. In LCL, each shipment is separated upon final shipment when delivered to their final destination. PS- Less than a container Load comes to be handy only when you have a limited size of cargo and when you are ready to compromise on other things like- transition time, multiple loading & unloading, etc. How does LCL work/ Working of LCL FOR LCL shipment, the carriers wait for the container to be loaded fully. It takes a few days because not every shipper brings their cargoes the same day. Once the cargo by each shipper is dropped at the carrier’s place, the assigned person then loads the packed goods (keeping in mind the location). The ship after setting off for sail crosses several ports drop containers at various ports. Cargoes are kept accordingly based on which port they will sail first. The container after reaching the port of destination is distributed and handed to their respective authorized person. How is the price calculated in LCL? LCL shipment price is not calculated by the size, weight, or number of cargoes you keep but it is calculated by the volume of space your cargo occupies inside the container. You would then think, more the volume, higher is the price- but that’s not actually true. It takes quite a large to increase the price. You can often double your shipment volume before setting any real difference. This is because, the average vessel can hold as many as 3,500 containers, with many vessels having the capacity to carry more. This directly dictates that there is a lot of space available, so sea mode is cheaper than other modes of transportation. And the minimum space you pay for usage is 1cbm. If you are shipping something below this measurement, you will still have to pay for at least a minimum volume price (1cbm). Shipment below a certain volume isn’t so cost-effective. So, either you can have a cargo of the volume equal to or more than 1cbmor you will have to end up paying the minimum standard amount set as per cbm. When to go for LCL? For small volume of goods: Most of the time, shippers come to carriers asking for a small space because they have a very small quantity of goods. In such a case, hiring an entire container doesn’t make sense, and carriers come with a mutual conclusion asking you to allow him to ship your goods in an LCL shipment. This is because your goods can easily be
adjusted with other shipper’s consignment and making you liable to pay only for the volume your goods occupy. Save on cost: If you have very small-scale goods and you want to save on cost, then LCL could be a better option. Although LCL is costlier than FCL, paying for the entire container sometimes comes to be costlier than paying for your extremely small volume of good. Therefore, for an extremely small volume of goods, opt for LCL and not FCL. When you have plenty of time: LCL is quite good when you are not in a hurry or you can wait for one or two days for other shippers to bring their consignment to ports. In those waiting days, you can re-think upon documentation and correction that you might have entered incorrectly in hurry. FCL vs LCL There is no true comparison between FCL and LCL especially to state which one is good. The judgment depends on several criteria discussed above. Both have their own pros and cons. Based on the cargo size, price, port of destination, transition time, security, etc you can determine which suits your shipment best.