The world of international shipping entails various stakeholders and processes working to achieve a common objective — getting cargo from one country to another. However, collaborating with different stakeholders and navigating different processes comes with their share of complexities, which can increase operational costs for shippers. That is why the option of Shared Container Loads (SCL) is so important for shippers.
Beyond being a shipping option, SCL is also a strategy businesses can leverage to optimize the cost of their shipping operations. It is the sweet spot between less-than-container load (LCL) and full-container load (FCL) shipping, limiting the downsides of LCL shipping and embracing the upside of FCL shipments. In this article, we take a deep dive into how shippers can optimize costs while leveraging shared container load shipping.
Cost Benefits of Shared Container Load Shipping
The shared container load shipping is unique in many ways. One of these is its ability to give the FCL shipping experience while leveraging the principles of LCL shipping. Here are some reasons why that is so beneficial to reducing your shipping costs.
1. Decreased Shipping Costs
While LCL shipping enables shippers to pay only for the space their cargo occupies, making it more affordable for smaller shipments, it becomes more expensive than FCL shipping once the cargo reaches around 20 cbm. It is cheaper to ship a container that is only 30% full than to consolidate your cargo, which is why a shared container load is important. It allows a business to ship more cargo for less, especially when that is still less than an FCL shipment.
2. Lower Inventory Carrying Cost
Businesses can leverage SCL shipping to continue serving growing customers in new markets. This is particularly helpful where LCL shipping cannot serve these customers, but FCL shipments are too expensive. Sometimes, to make the most of the FCL shipping opportunity, businesses are forced to ship items prematurely so that they don’t have to pay more for shipping. With shared container load shipping, the business can effectively manipulate the inventory levels to serve these customers.
3. Reduced Handling Costs
There are often too many handling processes with LCL shipments because several shippers leverage one container, and considering that they have different stops along the same route, it exposes these shippers to theft or damage of their shipments. This increases costs and concerns for the associated shippers. However, with SCL shipping, a shipper only has to consolidate with only one other shipper along the same shipping route, minimizing the handling process and the costs that come along with it.
Strategies For Optimizing Operational Costs Through Shared Container Load (SCL) Shipping
Although SCL shipping is cost-beneficial for businesses and shippers leveraging it, it is not automatic. There are strategies these businesses can leverage to realize the full benefits of the shared container shipping experience.
1. Accurate Planning and Forecasting
The nature of shared container load means that the shipper or the freight forwarder has to find other businesses willing to partner or consolidate in one container. Then there is the issue of these shippers needing to move the same items or at least the same category of items. For instance, a business shipping food and beverages will not want to partner with a furniture shipper. A freight forwarder like Silq can help here, ensuring vetted shipper partners and managing the logistics of these consolidated shipments efficiently.
To make SCL work, planning and forecasting are necessary components. They entail accurately estimating demand, picking a shipping commencement date, and finding the right shipper to partner with in the shared container load shipping operation. The shipper or freight forwarder needs to carefully measure cargo dimensions to determine the exact container space it will take to ensure seamless cargo consolidation.
2. Consolidation and Collaboration
Consolidation and collaboration with other shippers involve partnering with the ideal shipping partner and carefully loading the cargo into the container. Consolidation considers the secure arrangement of the cargo across the container so that each shipper maximizes the space paid for while also ensuring the securement and security of each cargo.
To do this effectively, shippers usually have to rely on freight forwarding businesses or partners like Silq that leverage experience and expertise to ensure careful consolidation, leading to a seamless shipping experience. However, effective consolidation cannot be achieved without adequate packaging of the SCL cargo being shipped. Optimized labeling and packaging are usually the shipper's responsibility, and they are critical because they add an extra layer of protection to the cargo while creating a unique identity that makes it easily recognizable.
3. Leveraging Technology Solutions
Technology solutions are critical during the SCL freight process because they allow for effective and streamlined loading and unloading processes, documentation, communication, and tracking abilities. With technology solutions like Silq’s freight forwarding platform, the entire SCL shipping experience becomes much more optimized for success.
The platform is important because it allows shippers and other stakeholders to effectively monitor the shipping process, customize workflows, and use real-time data to navigate and proactively manage potential risks that could impact the shipping operation.
4. Risk Mitigation
Insurance and compliance with existing shipping regulations are other important requirements for a successful shipping experience, especially with LCL and SCL shipments. Comprehensive cargo insurance can safeguard the SCL cargo from potential loss or damage during transit. Ensuring the SCL freight adheres to all relevant customs regulations, import/export restrictions, and safety standards will prevent delays and penalties across the entire SCL operation.
From Chicago to Hong Kong With Silq
A small but ambitious toy manufacturer in Chicago was thrilled to receive a sizable order from a retail chain in Hong Kong. The catch? While the orders were scheduled to be shipped every month, each individual order was too big for a standard LCL shipment but insufficient to fill a whole container. FCL shipping alone would eat up the profits, and LCL's potential delays and mishandling risks were worrisome.
Enter Silq. The digital freight forwarding platform quickly matched the manufacturer with a compatible partner — a craft brewery sending a shipment of specialty ales to the same area in Hong Kong. Silq handled everything: coordinating the pickup of both shipments, expertly consolidating them into a single container, and providing the bakery with real-time tracking updates between ports.
Silq's customs experts navigated the intricacies of international shipping, ensuring smooth clearance at both U.S. and Hong Kong customs. The manufacturer's toys shared space harmoniously with the brewery's ales, reaching Hong Kong in perfect condition and ahead of schedule.
The cost savings from shared container shipping were substantial, and the manufacturer could offer competitive pricing to its new Hong Kong client, paving the way for a long-term partnership. Silq's smart solution and platform made a small manufacturer part of a global marketplace.
No longer overwhelmed by the logistics of international shipping, the business could focus on its operations, knowing Silq had its back. Shared container shipping was no longer a logistical puzzle; it was its gateway to expanding the business across the pond.
Leveraging Shared Container Load Shipping To Optimize The Supply Chain
Silq's Shared Container Load is the best solution for moving shipments between 15-50 cbm globally. With our shared container load platform, you have the best features from the LCL and FCL shipping services, which enhances your supply chain's ability to:
- Ship alongside trusted partners: Share containers with other vetted shippers, ensuring your cargo is in reliable company.
- Pay only for what you use: No more paying for an entire transport container service when you only need a portion.
- Get FCL-like speed: Your shipments leave the origin port within 5 days of final inspection.
- Ship more frequently: Keep your inventory moving by shipping each SKU as soon as it's ready.
- De-risk your supply chain: Split your POs into multiple shipments for flexibility and security.
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