What Is Less Than Container Load Shipping

 

Among the many shipping methods available in today’s competitive landscape, less than container load shipping (LCL) service is a cost-effective alternative that offers more predictable and speedy transit times to distribution hubs across the United States. It is making headline news across the country and worldwide as more shippers discover the benefits of LCL ocean transportation. Rather than forcing shippers to accumulate enough cargo and delay shipments until a full container capacity is reached, the shipping option allows for greater flexibility and freedom with partial container shipments. 

Less than container load shipping services benefit ocean freight shippers and logistics managers in several ways. By its very nature, ocean freight has its own set of built-in obstacles and is prone to certain disruptions that must be accounted for in any shipping plans. Adaptability and flexibility are often enough to handle some issues, such as cargo rollovers, demurrage fees, port access bottlenecks, and scheduling conflicts. Other disruptions can be planned for but not controlled. For ocean transportation service providers, seasonal capacity highs and lows, as well as somewhat predictable weather patterns, can also impact shipping scheduling and choices. 

The Atlantic hurricane season can throw even the best planned route into chaos and cause delays and problems for shippers. At some point, it might be better to send smaller shipments more regularly than risk delays of days or weeks...or worse—losing an entire load to a storm. Beneficial cargo owners and other shippers and carriers must carefully consider all possible factors when choosing whether LCL shipping options are right for their current needs.

To fully understand and appreciate the benefits of less than container load transportation, one must understand how modern LCL shipping services, like those available from FreightMango, work.

What Is LCL Shipping

The shipping method known as less than container load is a specialized ocean freight transportation mode where goods from multiple shippers are organized and consolidated within one container. Shipping managers typically use LCL shipping in import and export situations where cargo volume from individual shippers is insufficient to fill a container fully.  

An essential aspect of LCL shipping involves combining multiple shippers' cargo at a centrally located point of origin and transporting them together to a destination. This method helps to reduce rates and helps maintain capacity levels while also keeping shipping lanes from becoming overcrowded. This mode of transportation helps reduce costs for shippers, as they pay only for the amount of container space used. 

If their cargo load fills half a container, they pay half the price of the container fees when using less than container load shipping. If they needed only a third of the space, they would split the cost with other shippers and pay a third of the total cost for the container. This is particularly helpful for smaller businesses or first-time importers who are just testing the waters or for those who are established but operate on much smaller volumes and capacities than some other players. 

That is one of the greatest benefits of LCL shipping — it can be used by anyone and offers benefits to large and small shippers alike, depending on their current situation or needs. LCL transportation services help shipping and logistics managers keep pace with the ever-changing needs of consumers and shifting market trends.

When to Ship LCL

When a company needs to move a small number of items or work with products that are considered low volume due to their small size, LCL shipping will likely be the best choice. Small start-ups and small-scale shipping companies often have small orders and deal with smaller and lighter items. Shipping a load of 2,000 phone cases or laptops takes up less space and weight capacity than transporting 500 washing machines or a couple of cars. 

These smaller orders can easily be combined with less than container load-based shipping to pack multiple orders together in one container. Rather than each shipper paying for a full container they can never hope to utilize, they can combine their resources, reduce their overall price, and often accelerate speed to market in the process, according to Greg Knowler of JOC.com.  Ultimately, whether to use less than container load shipping remains an individual choice each shipping manager must make. LCL shipping can serve as a valuable tool to help cut costs and improve delivery time and accuracy. Still, it must be applied to the right situation to be beneficial and impactful. 

How Is Less Than Container Load Price Calculated

LCL shipping prices are calculated based upon the volume of space needed to occupy within the container. According to Logistics Management, many of the biggest shippers and transportation companies take advantage of the LCL shipping option. They have learned how to incorporate the unique services provided by LCL transportation and maximize its potential. It sounds simple enough, but there is a little more complexity to it. 

For example, it is important to understand the amount of volume shipped for a given price. Logically, the more volume occupied inside the container, the more it will cost to cover that needed space. However, it takes a surprisingly significant increase in volume to change the less than container load rate price. It is possible to double the shipment volume before there is any real noticeable increase in the price.

The reason for this plays off the same situation where shipments under a particular volume lose most or all of their cost-effectiveness when shipping with less than container load for sea freight. These are known as the minimums and generally represent the minimal volume that a cargo container can hold where the shipping rate would be cheaper than using some other method. Cargo ships are enormous and contain thousands of containers, with many vessels topping out with as many as 25,000 containers per load.  This translates to abundant available cargo space, meaning a lot can be shipped with every trip, so it's cheaper than other modes of transportation.

However, this is where the “minimums” come in and can affect rates and fees, according to CNBC. If the total volume falls below the set minimum rate charge, less than cargo load shipping is not necessarily the most cost-effective option. For example, if the minimum space a shipper will pay for in a container is 1cbm (100cm x 100cm x 100cm). So, if the shipment consists of just one small box of cables or phone cases that measures 20cm x 20cm x 20cm, that minimum fee will still be applied. 

This means the shipper will still end up paying for five times the volume of what they used. So, while LCL shipping is a safe, secure, and affordable way to ship loads that would not fill up an entire cargo container, there is such a thing as the load being too small to make less than container load a viable option. This is why careful planning and analysis are important when considering this shipping method. With the right application and usage, it can make a tremendous impact on costs and overall profits.

What's Involved in the LCL Shipping Process?

While the premise is relatively straightforward, there is a certain degree of complexity to the actual workings of less than container load shipping. A few key details shippers need to keep in mind include:

While it seems complicated with steps involved, less than container load options offer an excellent opportunity for smaller shipments to be on the move quicker. Less than container load shipping helps save money and reduces waste. Controlling the number of containers moving and the overall number of trips conserves fuel and reduces pollution.

How Does LCL Differ From FCL

LCL shipping involves goods packed into a shared container alongside multiple orders and customers’ items. On the other hand, full container load shipments happen when a shipper rents all the space inside the container. As is common in transportation and shipping management, there are pros and cons to everything.  Some of the benefits to shipping FCL, as opposed to LCL shipping, include:

Here are some drawbacks of shipping full container load instead of less than container load:

These two common and essential shipping modes are actually two sides of the same coin. FCL and LCL are available to shippers and provide versatility and scalability when it matters most. 

The ability to adjust shipment modes and methods based on capacity volume and what specifically is being shipped makes the entire process easier for shippers and logistics managers. Knowing how to strategically leverage both of these valuable options can help transportation service providers maximize efficiency and maintain a competitive advantage in any market situation. 

How FreightMango, a Digital Freight Marketplace, Can Help People Find LCL Freight.

While LCL shipping offers obvious benefits to shippers, onboarding new systems and managing a new shipping process can present a real challenge to transportation service providers and managers. Working with a dedicated team of cargo shipping experts and utilizing a digitally managed freight marketplace allows for better management of international shipments, notably less than container load shipments.

Less than container load service providers can offer several benefits that cannot be attained elsewhere:

 

Additional benefits shippers can enjoy by utilizing less than container load shipping options, according to  JOC.com, include:

Less than cargo load shipping has revolutionized ocean freight transportation services. Innovations within ocean freight shipping have also made it easier than ever for transportation service providers of all sizes to provide in-demand services for shipping and finance to their customers.    

Streamline LCL Shipping by Partnering With FreightMango

LCL shipping has become a significant game-changer in the global supply chain and transportation market. When a company needs to move items of limited quantity and volume, LCL transportation is the best choice in many cases. Thanks to the adaptability, scalability, and visibility available with less than container load shipping, this mode of ocean freight transportation is increasingly popular among shippers.

With smaller start-ups and small-scale shipping companies, less than container load features open doors for better shipping services and more competitive pricing than ever before. Maximizing shipping efficiency and capitalizing on profits by reducing expenses and boosting returns remains a critical aspect of global supply chain and transportation management.

Taking advantage of the flexibility and scalability of less than container load shipping with a collaborative partnership can help streamline the entire process. Sign up with FreightMango today to discover the benefits of LCL shipping and take transportation services to a whole new level.