FCL vs. LCL Shipping – Things to Consider, writes Max Jerard for Global Trade news source.
FCL and LCL shipping
When it is time to ship your goods using ocean freight, you have two available options. FCL and LCL shipping. FCL stands for ‘Full Container Load,’ and as the name implies, this means that you are using the full extent of a container’s capacity for your own goods. On the other hand, LCL stands for ‘Less than Container-Load’ and implies that you will be sharing container capacity with someone else’s goods. Both approaches admittedly have things to recommend, so picking one or the other as a business owner can be difficult, especially if you are trying to make the most financially optimal choice for your business. In order to make a choice a little easier for you, we have prepared a guide on FCL vs. LCL shipping – things to consider.
The cost of renting storage containers regularly
The first thing we need to bring up on the topic of FCL vs. LCL shipping is the costs involved. Now, it should come as a surprise to no one that renting out a whole container as FCL demands are more expensive, especially when there is a container shortage, which happened globally a relatively short time ago. LCL, on the other hand, lets you share the cost of a container with others. This means you’d only need to pay for the space your goods are actually taking up. If you are paying for a full container yet, don’t fill it up; that wastes your resources. And a thing you’ll quickly learn about logistics is that doing business gets expensive if you’re not doing things optimally. So, in most scenarios, it is better to opt for LCL.
The volume of your regular shipments
The second thing to consider when deciding on FCL vs. LCL shipping is the volume of your regular shipments. Going FCL, if you have to ship large volumes of goods that do take up an entire container, is honestly the better option. You maintain more control over your goods, and you avoid the waste of resources we mentioned before. Still, the situation is once more in favor of LCL if you don’t have large shipments. Or if you prefer to send out smaller shipments frequently. Even getting hold of a whole container on your own is still somewhat difficult due to the aforementioned container shortage. And although opportunities to get containers are opening up, this doesn’t necessarily make them any cheaper. As such, it’s much better to simply share container space with other businesses.
The speed of shipment arrival
When it comes to the speed of FCL and LCL shipments, the former finally wins out. LCL shipments, even if they do take the same routes as FCL, are by necessity slower. This is because it takes time to find enough interested businesses to fill up all the shared containers. And even once that’s done, and the destination is reached, distributing the cargo takes care and time. After all, you wouldn’t want your shipment to be accidentally handed off to someone else, and this is a serious risk if unloading goods from shared containers are rushed. This makes LCL shipping a poor choice for a business that needs the shipments delivered quickly and efficiently. In turn, this might force you to opt for the more expensive and less optimal FCL shipping, even if you’d prefer the LCL shipping method.
The security afforded to your goods
Another reason why you might lean towards FCL shipping is security. After all, once a shipping container is sealed, you know with absolute certainty that your goods are safe. And that they will arrive at their destination unaltered. Since your employees or the person receiving the shipment will be there to take over the goods once they arrive at the destination, you once more have assurances that they won’t be meddled with. However, sharing a container with others necessitates more people having access to it. And the goods will need to be taken out and distributed once they reach their destination. This increases the odds of your shipment getting damaged or even stolen.
The convenience of shipment organization
To make things complicated once more, we have the following argument in favor of LCL: convenience. If you are shipping your goods in a single container or struggling to fill one up to avoid wasting resources, your distribution is likely, not optimal. It may be better to send part of the shipment to a different warehouse. Or you might even be forced to separate the shipment and then transfer the goods to different nearby ports or cities by land. On the other hand, LCL shipping lets you earmark a destination for each of the containers you contribute goods to. This gives you a ton more flexibility, and you don’t need to worry about proper distribution as much. And it will make warehouse management a tad bit easier, too, if your warehouses don’t have to constantly serve as mere transit points.
Additional considerations of FCL vs. LCL shipping
The final thing to consider on the topic of FCL vs. LCL shipping is ‘special’ goods. Here, we generally have two categories. First, extremely fragile shipments could get damaged if shipped in a shared container. And second, hazardous goods, which are extremely difficult or even impossible to find a shared container for. So, in these scenarios, you would once again be forced to opt for FCL almost every time.
Make an informed decision when deciding how to ship
With our guide on FCL vs. LCL shipping, you can make an informed decision! Of course, it all comes down to your personal preferences and business model in the end. But it is still possible to argue that if you are not in a hurry or value security above all else, LCL is the superior shipping method.
Author Bio
Max Jerard Fielding is a warehouse manager who spent most of his career overseeing a warehouse on a dock before becoming associated with Maximus Moving & Delivery. His past and current managerial positions make him more than qualified to offer advice on a host of logistics-related topics.
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Source: Global Trade Mag
