LCL Shipping: How and When To Ship LCL

The ocean holds plenty of records. It’s home to the world’s largest mammal (the blue whale), the oldest living animal (a 10,000-year-old glass sponge), and the oldest surviving species (the horseshoe crab, or coelacanth, depending on who you ask). It’s also responsible for the majority of international trade: About 80% of global cargo ships by sea.

Ocean freight is typically the most affordable option for businesses sending large or heavy shipments. But it can be trickier for smaller packages. With interior dimensions just under 20 feet by eight feet by 10 feet and a capacity of 39 cubic meters, a small commercial shipping container is still pretty big. The size may not be practical for low-volume shipping.

For small businesses or shipments, less than container load (LCL) shipping might be a more suitable option. LCL shipping consolidates small shipments with other businesses to fill a container, making it more cost-effective. Here’s what LCL shipments are, how they work, and how to tell if they’re right for your company.

What is less than container load (LCL) shipping?

Less than container load (LCL) shipping is an ocean freight shipping method in which a shipper purchases a portion of the space in a standard shipping container. It can be a cost-effective solution for a cargo load that doesn’t fill an entire shipping container. Instead of renting a full container, shippers purchase shared container space by cubic meters (CBM).

Here’s how LCL shipping works:

1. Container booking. A business contacts a third-party logistics (3PL) provider to book an LCL shipment.

2. Packaging. The business boxes LCL cargo. For a large-volume shipment, it might also load boxes onto pallets.

3. Pickup. The 3PL picks up boxes or pallets from the point of origin and delivers them to a container freight station (CFS), a warehouse owned by the 3PL provider, the shipment carrier, or a third party.

4. Loading. Warehouse staff pack any loose shipment boxes onto pallets and load the pallets into the shipping container. Once the other cargo has been loaded, the CFS team arranges transportation to the port of origin and loading onto the international carrier.

5. Transportation. The shipping carrier moves the cargo to the destination port.

6. Unloading. Destination staff unloads the container from the vessel, and the 3PL arranges delivery to the destination CFS. The CFS team unloads the container and deconsolidates the shipment, unloading any pallets that contain boxes from multiple shipments.

7. Final delivery. The 3PL ensures delivery of the boxes or pallets to their final destination.

LCL vs. loose cargo load

Generally, an LCL shipment isn’t the same thing as a loose cargo load. Loose cargo refers to a shipment that isn’t palletized. Most carriers require LCL shipments to be palletized before loading into the shipping container, although there are sometimes exceptions.

LCL vs. FCL

Unlike LCL shipments, full container load (FCL) shipments occupy an entire container. Shippers pay a flat rate per container regardless of whether they fill all available space. With FCL, shipments don’t share container space with other cargo: A single container has one shipper and one recipient.

The best option for you depends on your total shipment volume, delivery timelines, and privacy and security needs. LCL rates per CBM are higher, but LCL is typically cheaper for small shipments. If your cargo can fill (or nearly fill) a standard container, however, FCL may provide lower shipping costs.

Ask your 3PL to calculate the difference. FCL shipment can also offer increased security and a faster transit time, so it can be worth paying a slightly higher price to book FCL.

Benefits of LCL shipping

LCL solutions can help businesses save money on transportation and storage. Here’s an overview of the benefits:

• Cost-effective for smaller shipments. When you book LCL, you pay only for the container space you use. This means it’s typically less expensive to send small shipments via LCL than FCL.
• More affordable than air shipment. Ocean freight costs less than air freight, in general, and LCL shipment is a particularly good option for low-volume, high-weight (i.e., dense) shipments. While air cargo rates depend on weight, LCL cargo rates depend primarily on volume.
• Better peak season availability. Ocean freight shipping peaks between August and October, and it can be difficult to reserve FCL containers during peak season. You might ship LCL so you don’t have to wait for an FCL option.
• Reduced storage expenses. LCL shipment lets businesses order smaller volumes, which can reduce storage costs. You don’t need as much space in the destination country.

Drawbacks of LCL shipping

LCL shipment isn’t always cheaper, and it often means more time in transit. Here are four drawbacks:

• Longer transit times. It takes longer to ship ocean freight than air freight, and LCL is the slower of the two sea shipping options. Transporting LCL freight to and from CFS warehouses and consolidating and deconsolidating shipments adds a few days on top of FCL transit times.
• Less control over delivery timelines. LCL shipping ties multiple shippers to the same timeline, which makes it less flexible than FCL. If you’re ready to ship your cargo early, you’ll still need to wait for other shippers. Your 3PL might also delay a shipment if another party needs more time to deliver their cargo, which will push back your delivery date.
• Higher cost per CBM. LCL shipping isn’t always cheaper. It costs more per CBM than FCL shipment. If you can ship enough cargo to fill an entire container (or come close), shipping FCL can be a better option. Ask your 3PL to calculate the difference.
• Greater risk of shipment loss. While FCL containers are sealed on a business’s premises and can remain unopened until delivery, LCL containers are loaded and unloaded at a CFS. If privacy or security is a concern for your business or you want to minimize merchandise handling, you might choose to shipFCL instead.

How much does LCL shipping cost?

LCL rates depend on shipment volume, route, time of year, weight, and the cost of transporting goods from the point of origin to the final destination. Here’s an overview of the factors:

• Volume. Carriers charge by CBM for LCL shipment, so shipment volume is the most significant factor in an LCL rate calculation. Minimum shipment volume is typically one CBM.
• Weight. Some carriers also factor in shipment weight, but the effect on LCL rates is minimal (especially compared to the impact of weight on air shipment).
• Route. Shipping carriers use a demand model to determine the price of a particular route at any given time. You can expect to pay more in peak season, which is August through October.
• Warehouse proximity. Your 3PL will arrange pickup and final dropoff of LCL cargo. The farther each location is from the CFS warehouse (and the more difficult transport between each point is), the more you can expect to pay.