FCL vs. LCL: What’s the difference and which is right for your shipment?
At Stockwells, we believe in making logistics lingo simple. In this blog, we’re breaking down two essential terms you’ll come across in ocean freight: FCL and LCL. These stand for Full Container Load (FCL) and Less than Container Load (LCL), the two main ways to ship goods by container. Understanding the difference can help you make smarter, more cost-effective shipping decisions.
Let’s get started.
What is Full Container Load (FCL)?
FCL means that a container is exclusively filled with goods from a single shipper. The container is sealed once packed and transported as a complete unit, without sharing the space with other shipments. Importantly, an FCL shipment doesn’t need to completely fill the container; the term refers to the fact that the shipment occupies the entire container and is sealed for security during transit.
FCL is commonly used for larger shipments and is ideal for international trade. Here’s a closer look at the benefits and drawbacks of FCL:
Benefits of FCL:
- Efficient for large volumes: If you have a lot of goods to ship, FCL is often the most efficient choice. The container can handle large shipments without being divided up.
- Quicker process times: Since the container is booked and handled by one shipper, the process is faster and more streamlined, with fewer touchpoints in transit.
- Faster transit times: FCL shipments generally reach their destination faster since there’s less handling and fewer stops along the way, making it a great option if time is a priority.
- Increased security: Since your goods are the only ones in the container, there’s less risk of damage or theft. The container stays sealed and secure throughout the entire journey.
- Cost-effectiveness for larger loads: As the shipment size increases, the cost per unit typically decreases, leading to lower costs overall for large volumes.
Drawbacks of FCL:
- Higher upfront costs: Booking an entire container can incur higher costs upfront, especially if you don’t have enough cargo to fill the space. However, it can be more cost-effective per unit if you have enough cargo.
- Underutilised space: If you don’t have a full container’s worth of goods, you may still end up paying for unused space, which can be inefficient for smaller shipments.
What is Less Container Load (LCL)?
LCL is also known as groupage. In this case, your goods share container space with shipments from other shippers. You only pay for the space your cargo occupies, making it an economical choice for smaller shipments. However, LCL involves more processes, as it requires consolidation and deconsolidation at various points.
Benefits of LCL:
- Economical for smaller shipments: LCL is perfect for businesses that need to ship low-volume goods. Since you’re only paying for the space used, it’s a more affordable option when you don’t have enough cargo for a full container.
- Flexible shipping options: LCL allows for more frequent shipping since your cargo is combined with other shipments. You don’t need to wait until you have enough goods to fill a full container, making it easier to send smaller loads as space becomes available.
- Lower warehousing costs: If you’re storing goods in a warehouse before shipping a full container, LCL allows you to lower your inventory costs by consolidating multiple smaller shipments.
- Access to global shipping: LCL opens up international shipping to smaller businesses that might not have enough products to fill an entire container. It’s a great way for small and medium-sized businesses to tap into global markets without the need for large shipments.
- Scalability: As your business grows, LCL lets you adjust the size of your shipments based on demand. There’s no need to commit to full container loads—you can scale up or down as needed, making it a flexible solution for businesses at any stage.
Drawbacks of LCL:
- Longer customs clearance times: Because your goods share the container with others, customs clearance can take longer due to the need to separate and check each shipment individually.
- More handling: With LCL, your goods will be handled multiple times during consolidation and deconsolidation. More handling increases the risk of damage compared to FCL.
- Longer transit times: These shipments usually face longer transit times as the cargo is consolidated at one location and deconsolidated at the destination, making several stops along the way.
How to choose between FCL and LCL?
Several factors should influence your decision:
- Volume and weight: If you have a large shipment, FCL is the way to go. For smaller shipments, LCL is more cost-effective.
- Shipping costs: If your shipment doesn’t fill a full container, LCL can save you money. However, for larger shipments, FCL offers better value in terms of cost per unit.
- Transit time: FCL tends to be faster because there are fewer handling processes involved. If time is a critical factor, FCL might be your best option.
- Security: If the safety of your goods is a concern, FCL offers the added benefit of exclusive container use, reducing the chances of damage or theft.
Both FCL and LCL have their place depending on the size and urgency of your shipment. For large shipments, FCL is typically the best choice, while LCL works well for smaller, less time-sensitive loads. It’s always wise to work with a freight forwarder who can guide you on the best option based on your specific needs.
If you’re unsure which method is right for your shipment, get in touch with us today at Stockwells to discuss your options!