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Full Container Loads VS Less than

Container Loads in Shipping
03/06/2021
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What is FCL and LCL?

The full form of FCL is ‘Full Container Load’, it is a container that is for the
use of a single consignee. In international shipping, an FCL means a single
container that is booked by the shipper exclusively for the transportation of
their cargo only. The shipper doesn’t have to share the container with cargo
booked by other shippers. This enhances security and simplifies ocean
freight logistics management.

Whereas, LCL which is Less than Container Load is handy when the
exporter doesn’t have to book an entire container because the size of the
cargo doesn’t demand that much space. Smaller shipments that need to be
sent economically and are less time-sensitive are sent on an LCL container.
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Freight forwarders often book cargoes under the LCL category and create a
‘consolidation’ by merging several of their LCL cargoes. They do so by
booking an FCL container and consolidating the same with cargo accepted
from different shippers. The cargoes are then sorted as per their port of
destination or trans-shipment.

Also Read: Choosing the Right Clearing and Forwarding Agent

Key Differences between FCL and LCL containers

As the volume of the cargo increases, there is a break-even point at
which the cost of LCL surpasses that of FCL
The product type suited for FCL is bulky and heavy, while for LCL it is
small and portable
Traditionally, FCL rates are known to be volatile, compared to the more
stable LCL rates
Half-height containers are ideal for heavy cargo
Collapsible racks are used to transport cars
Bulkers are used for granular cargoes
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What is FCL & LCL in shipping terms?

To ship an FCL cargo, the shipper will have to book at least one whole
container. For an LCL shipment, it is not necessary to book a container; only
a portion of it needs to be booked. Naturally, in the case of FCL, the goods
therein will be owned by one company only. In LCL, there may be goods
that are consolidated and are owned by different companies.

FCL delivery happens much faster than LCL. As the entire container is
booked, there is no need to sort and unpack the container at separate
delivery ports. The possibility of delay at ports and in the hands of customs
authorities is also lower. In the case of LCL, additional time is required for
sorting the goods, consolidation of documents, and processing. The time
required in loading and unloading can also be higher in the case of LCL
consignments.

Unlike with FCL, there may be less clarity about the handling and
documentation charges associated with LCL cargoes. Although the freight
charge itself is quite low compared to FCL, there may be higher terminal
handling charges and documentation fees, so it is best to discuss the terms
with the shipper beforehand.

Documents required
Some of the basic to carry out the process would be:

Bill of Lading / Ocean Bill of Lading (Ocean Freight)

Certificate of Origin
 Commercial Invoice
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Packing List
Fumigation Certificate
Inspection Certificate
Insurance (Marine Insurance)

Note:- The documentation will vary depending upon the commodity and
the country of origin.

Shipment Cost
In terms of total costs, booking an FCL container will be more expensive
given the sheer volume. However, if the dimension-wise cost is considered,
the FCL booking is generally cheaper than LCL. So, the cost per freight is
higher in the case of LCL booking, although in terms of the total cost it is
the more economical option.

For small cargo, it is obvious that LCL is the only logical option. However, if
the volume of the cargo is big, the exporter must compare the costs for
both FCL and LCL. Apart from the freight, there will be haulage charges
and destination service charges. These charges may be recovered from the
buyer, but even in that case, such price escalation may affect future
dealings.

The cubic meter calculation of LCL will also determine how good an option
it is for an exporter. In the case of FCL, the freight is charged for the full
container load basis. But in LCL, the freight charge calculation is based on
the volume of the cargo. Beyond a certain weight limit, the freight is
charged based on the weight instead of the dimension.

FCL VS LCL Container - Which is Better?

Several essential considerations decide which of the two load options is
best for you.

A primary factor is transit time. In LCL, the goods are stuffed into the
container only after the freight forwarder receives sufficient cargo to fill the
container. With multiple cargoes, there might be multiple trans-shipment
ports, which can delay the arrival of the cargo at the port of destination. So,
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while selecting LCL, the exporter must find out the container stuffing date,
the carrier itinerary, the trans-shipment schedule, and the expected date of
arrival.

The choice between FCL and LCL is quite simple when the volume of the
cargo is a lot or very little. But when it comes to choosing between the two,
an exporter has to balance the cost of the shipment with the convenience
and speed of the logistical process.

Also Read: Export Logistics and its Process

Containers are a convenient way of shipping cargo to overseas

destinations. They are made from durable materials such as steel,
aluminum, fiber polymer, etc. The size of containers is as per the
specifications defined by the International Organisation for Standardisation
(ISO). They come in standard dimensions, with lengths that can be of 8, 10,
20, 30, or 40 feet.

Features of FCL and LCL Containers

Containers may have varied features. Here are some common designs:

Tunnel design has a double door on both sides

Open-sided containers have one door that can be pulled down, covering
one complete side
Double open-sided containers have doors on both the sides that can be
opened and closed
Open-top containers have a removable tarpaulin roof
Refrigerated containers are used for frozen or perishable cargo
Flat rack containers have no roof and side panels and have collapsible
end frames; these are especially suitable for oversized cargo
Tank containers are meant for liquid cargo

Also Read: 24 Types of Containers used in International Shipping