FCL and LCL sea freight

products

Prof .V.M.MOHAMED ALI

FCL and LCL are two of common terms

used in shipping under Export and Import

trade of International business.

What is FCL?
If an exporter has goods to accommodate in one

full container load, he books an FCL(Full

Container Load) to stuff his cargo.
In an FCL cargo, the complete goods in the said
container owns by one shipper.
In anFCLowned by one shipper, the cargo in the
container need not have fully loaded cargo in the
container.
Let the cargo be half loaded or quarter loaded
container, if booked by one shipper under one
shipment, the said shipment is called FCL
shipment.

What is LCL?
Under anLCLcargo, where in a shipper does

not have enough goods to accommodate in

one full container, he books cargo with a
consolidator to console his goods along with
goods of other shippers.
This type of shipment is calledLCL shipment.
The said consolidator arranges a fully loaded
container(FCL), and consoles the shipments
of other shippers and deliver each shipment
to final destination by separating each
shipment at final destination

Most buyers, however, simply buy what they need.

They dont want to carry extra inventory that might

not get sold. If they have, say, 22 cubic meters it is
not a problem it will nearly fill a 20 container up.
So they book an FCL (Full Container Load).
Now, what to do if you only have 12 cubic meters
of products to ship?
Most freight forwarders offer to consolidate your
shipment with those of some of their other clients.
Each client books LCL (Less than Container Load),
and then the forwarder arranges to put it all
together in one container.

LCL is often in transit for a longer period of time, due

to the freight company having to load and unload

numerous companies items.
It is also possible that your shipment will be delayed
whilst the shipping company find enough items to fit
the container.
Another cause of delay, not mentioned in the CPG
article, is the risk that other goods inside the same
container are blocked by Customs.
One regular reader tells me she saw cases where an
importer lost his products completely this way
(because Customs had a problem with OTHER
products).

Insurance is more expensive

When shipping by LCL you are likely to be

paying more towards insurance then you
otherwise would with FCL.
Your cartons might get damaged

If you ship soft goods, and your loose

cartons(not on pallets) are placed
aside/under heavy hard goods, your
products might get crushed.

Uses of LCL
When using LCL shipping services, you

need not worry about returning the

container after delivery.
Because you are sharing the container, it is
the concern of the shipping container
service company, which is likely to have
return trips booked for that LCL container.
Shippers using LCL need be concerned only
about the load being shipped and nothing
else.

LCL is one of the most cost saving and time consuming

way of international container shipping. For customers

who don't have enough cargo to fill whole ocean
container, LCL freight is the right solution providing
Full Container Load frequency and service.
LCL can drastically decrease shipping cost.
We can provide you with space within ocean container
and the sailing time will be the same when
transporting goods LCL internationally.
You will share the cost of whole container shipping
with other customers, based on your cargo volume.
Freight volume (cubic meter / cubic foot) is the most
important pricing factor, forming the cost of your LCL
shipment abroad.

 To do this we first take the length, width, and depth of each piece and add from 2-10

centimeters to each dimension.

We add the 2-10 cm to the size of the pieces to allow for packing and framing. Once

we get the total volume of the piece or pieces you are ordering we divide the total
volume by 1,000,000.
We get the 1,000,000 figure from length 100 cm multiplied by width 100 cm

multiplied by Depth 100 cm . note* there are 100 cm in one meter, thus there are
1,000,000 cm in a cubic meter.
Example 1.

Item #widget 12
Quantity 1
Size 75 x 50 x 90 cm
Let us assume that this item is fragile so it will need very good packing and framing.
To insure that we are able to pack this very well we will add 10 cm on to each side of
the object. The new shipping size of Item #widget 12 is 85 x 60 x 90 cm.
85 x 60 = 5,100
5,100 x 90 = 459,000
459,000 / 1,000,000 = 0.46 or 46%
From this example we know that widget 12 will occupy 46% or about half of a cubic
meter. Since there is a minimum shipping volume of one cubic meter for LCL there is
an extra 54% of a cubic meter that can be used.

FCL gets delivered more quickly

than LCL
When an FCL shipment arrives at port, its unloaded

from the vessel and delivered to the buyer.

Its more complicated for LCL: someone has to
consolidate different shipments, process multiple
documents per container, and then sort goods for
each customer.
Every point could be delayed. At origin, the cargo
has to be grouped together to fill a container.
At destination, theres a greater risk of examination
by customs: When one shipment in a container gets
flagged, every shipment has to be checked. That
can cause delays of days.

Multiport LCL consolidation

Through our global LCL gateways in either

Singapore or Colombo, Kuehne + Nagel can

consolidate shipments from multiple
countries and vendors for efficient onwards
global transportation - offering defined
country shipments or a hub solution for
multiple delivery countries

By doing this you can benefit from the

following;
Pulling stock holding together to assist in agile or lean

inventory management decisions.

Optimised transportation costs by combining shipments to
either LCL or FCL.
Reduced distribution costs through direct delivery from the
gateway to alternate global delivery points.
Offering improved load factors in full container shipments
Opportunity of combining LCL for onwards transportation
to reduce delivery and handling costs
Simplified pricing and cost management
Regular, reliable, fixed sailings and services.

Benefits of Consolidating
Shipments

There are multiple benefits to consolidating your shipments overseas.

Reduce Transportation Costs Just as many companies combine

domestic shipments in the US into a truckload, the same holds true for
consolidating container shipments at the point of origin. You are also
reducing shipments by increasing the amount of product you ship within one
full container.

Reduced Labor Cost Much of the work that is performed in the U.S. to
consolidate shipments can be done overseas for a much lower labor cost. You
can accomplish the same for less.

More control By having a consolidator who knows the lay of the land, you
have better control over the local vendors. The consolidator can act as your
eyes and ears in country.

Become Demand Driven By maintaining fewer inventories in the

domestic distribution center and keeping it at a consolidator overseas helps
you better meet supply based on the demand from the consumer. This
provides increased flexibility.

Sustainability Efforts By consolidating shipments overseas, you are

reducing the number of times you ship. Not only does this reduce costs, but
it also reduces a companys supply chain carbon footprint.

Multi-Country Consolidation
(MCC)
Multi-Country Consolidation (MCC) involves receiving

goods at our warehouses in each country, shipping to a

single port hub, and consolidating into full container
loads.
MCC movements throughout local and global
infrastructures.
Options include re-handling at port hub to make FLCs for
the final destination, waybills covering the entire
journey, and a range of value added services.
MCC can offer increased efficiency with lower costs
compared to multiple LCL shipments, flexibility, time
gains (especially on smaller orders), and reliability
through scheduled departures from hub ports, and easier
final destination deliveries.