FCL and LCL shipping are the two most common shipping modes for international trade.
These two freight options can be leveraged by businesses of any size. More importantly, the businesses and supply chains using them must leverage the right one to optimize their freight operation. However, it can be challenging for many shippers to decide on the best option for their shipping operation. The trick is to focus on the needs of the business.
This article provides practical insights into FCL and LCL shipping, offering shippers a clear understanding of when to use each method.
What is FCL Shipping?
Full container load (FCL) shipping is a shipping mode whereby shippers or supply chains leverage an entire container to transport freight internationally.
The containers are usually 20 to 40 feet long and will be dedicated solely to that business or supply chain. The business may fill up the FCL shipment with different products or cargo if it doesn’t exceed the recommended volume. On the flip side, the rest of the container space will be unallocated if the business doesn’t have enough to fill the container.
When using full container load shipping, it is important to note that the supply chain is responsible for the entire container, so filling it up will help optimize or utilize the container.
When is FCL Shipping Necessary?
Knowing when to use the FCL logistics service will help the supply chain effectively manage operations and optimize costs. The FCL requires a lot of shipment, so it is typically favored by businesses that ship large volumes consistently, but there are other situations where it will make sense for smaller businesses to leverage it.
Here are factors to consider before deciding on the FCL freight solution:
Large Cargo Volume
FCL requires that the shipper pays for an entire container load. It could be 20 or 40-ft in size, but it will only benefit the shipper or supply chain when there is a large volume of products to fill up the container or at least take up reasonable space. Paying for a full container without having enough cargo will be expensive for the supply chain.
The following are common container sizes and their capacity:
Time Sensitivity
Some time-sensitive items or products will make it critical to leverage the FCL shipping. For instance, food and beverage supply chains or chemical and pharmaceutical supply chains will need the reefer or cold chain logistics solution. Because of the time-sensitive nature of the cargo, leveraging an FCL shipping service will ensure that the goods can get to their destination without interruption.
Security and Fragile Cargo
Unlike the LCL shipment solution, the FCL is usually more secure. Because it is only for one shipper, opening the container is unnecessary while in transit. Unlike LCL shipping, there will be minimal interference from the container freight station to its destination.
FCL also comes in handy when transporting fragile shipments.
This means there is ample space and securement to prevent damage or collision with other products in the container. The fragile cargo can be sufficiently arranged to ensure that the movement of the container will not impact the shipment. However, in many cases, this will mean using the available space in the container to ensure adequate securement.
Predictable Costs
The cost of FCL is usually uniform and predictable, making the supply chain planning and budgeting more seamless. Shippers know what to expect, and they can adequately prepare for it. Unlike the LCL freight option, where the pricing may depend on the volume of goods being transported necessitating adequate weighing before the pricing can be determined. Predictable costs also allow for optimization across the entire supply chain operation.
What is LCL Shipping
Less than container load (LCL) shipping is a shipping solution whereby shippers or supply chains only have to pay for space on the container rather than paying for the entire container space.
It is a cost-effective shipping mode, typically for small businesses, larger businesses that wish to stay nimble depending on demand patterns, or e-commerce platforms. LCL shipments serve as a bridge that allows smaller businesses to participate in international trade. It levels the playing field for all supply chains wishing to operate on a global scale. However, it is not always ideal.
Considering a shipper is not in control of the entire container, there are situations or limitations that will come with less-than-container load shipping.
When is LCL Shipping Necessary?
Although LCL logistics service is a game changer in the world of international shipping and trade, it is not always ideal. Understanding when it is necessary will inform businesses and their supply chains on how best to take advantage of or leverage the shipping solution.
Here are various factors to consider when choosing an LCL freight solution:
Cost Effectiveness For Smaller Shipments
From the table depicting the size of containers, it is clear that a 40ft container (GP) has a nominal capacity of 67.8 CBM and a maximum payload of 28,780kg. Now imagine trying to transport a shipment of 10 CBM and a maximum payload of 1000kg, and the only available option is FCL. The waste of space and money will be astronomical after a period of time, impacting profitability. This is why LCL shipping is so critical.
It helps businesses operate a cost-effective supply chain.
Reaching New Markets
New markets can be scary and unpredictable. Caution is always advised when exploring one, and LCL shipping also plays a critical role here. It offers shippers or businesses the flexibility they require to manage their inventory in the new market. They can run a streamlined supply chain until they have a stronghold on the new market. One scenario LCL cargo service helps businesses avoid is transporting a lot of inventory into a new market and then having to deal with the pressure of selling it off.
With LCL logistics solutions, businesses can gradually scale their operation in any market until they are ready to go all out.
Streamlining Inventory Management
Inventory is a critical aspect of any supply chain; having the right balance can be critical to the success of the supply chain. However, holding inventory can be quite expensive. Today, many businesses are clamoring for more streamlined inventory management, such as JIT. Operating one can be tricky, and one will need a consistent shipping service that will deliver what the business and supply chain need at every given point.
How Gyne Electrics Optimized Its Shipping Operation WIth Silq
Gyne Electrics has enjoyed much success in the electronics sector, both locally and internationally. However, the business was struggling with optimizing its shipping operation. The problem was that it shipped a lot of goods across the globe, but it failed miserably in determining which shipping mode was best every time.
The management was beginning to realize they were losing money in their logistics operations but were unsure how. But one thing was sure: Gyne Electrics did not become a global success by leaving money on the table, so the company wanted to get to the root of this matter. After extensive research for the best freight forwarder, the company was introduced to Silq, and that is where things turned around for the better.
Silq, being a freight forwarding platform that leverages experience, expertise, and technology solutions to help customers optimize their shipping operations, immediately got to work. It quickly found that although the company was shipping regularly, it was always making use of the FCL freight option when that wasn’t necessary.
So next step involved sending professionals to the Gyne Electrics factories for inspection. This helped them plan effectively. When the shipment is beyond a certain threshold, Silq will leverage LCL shipping, and when it is above a certain threshold, Silq will decide on the type of container to use for the FCL cargo service, considering the price of 20 ft containers was cheaper than that of 40 ft containers.
Within a month, Gyne Electrics could see the difference in costs. More importantly, the company was able to optimize the entire shipping process for more effectiveness.
Why Silq is The Best Partner For Your LCL and FCL Shipping Solution
Determining when and where your business or supply chain needs the FCL or LCL logistics solution is a tricky decision to make as a shipper. This makes it crucial to find a platform that helps you make that decision and implement it all the way. That partner is Silq.
Whether your mode of shipping is via air freight or ocean freight, Silq leverages technical expertise and a freight forwarding platform to ensure that shippers can optimize their entire logistics process. Silq has boots on the ground, with its inspectors ensuring your shipment is checked and safely secured in the freight containers before their voyage. As a shipper, you are guaranteed a seamless shipping experience devoid of logistics hiccups. Get started now.
