FCL vs LCL Shipping: What’s the Difference?
Is your company starting to have products manufactured overseas? If so, it’s likely you are using factories in Asia, such as in China, Taiwan, Japan, or Thailand.
It’s almost always cheaper to have products manufactured and assembled overseas. But you’ll need to have them shipped back to your warehouse in the US for individual distributing.
The logistics industry is huge and there are many types of shipping options available. Factors include the amount, size, and weight of your shipments, as well as the shipping speed desired. As such, you might opt for LCL shipping, FCL shipping, or shipment by air.
But what is LCL shipping, and how is it different from other shipping options? Keep reading to find out the best way to transport your goods across the globe.
Understanding the Global Shipping Industry
International shipping, or logistics, is a very large and very complex industry. There are dozens of moving pieces and it can be very complicated to get materials or goods from point A to point B.
It is daunting to break into global shipping. It starts with selecting shipping options to ensure safety and compliance with customs. But navigating declarations, and tracking your shipments can also be difficult.
Each country has its own shipping regulations which seem like they are always changing. And ensuring your shipment gets to a port on time to be prepared for the next shipment is incredibly stressful.
In order to ensure success when it comes to shipping, it’s imperative to work with a logistics company. They can handle many, if not all, of these details for you. It takes an expert to manage this process. Especially since your shipment will pass through many different hands, borders, and vehicles.
Types of Shipping
When it comes to shipping goods and materials internationally, you have a few main options. Common shipping options include container shipping, freight shipping, and courier shipping.
Courier shipping is the most simple. It’s virtually the same process as sending a package across your city or country. You’ll package up a small shipment, affix the appropriate shipping label, and drop it off at the parcel service.
If shipping internationally, you’ll need to fill out the proper customs information. This is typically the fastest shipping option. But courier shipping is generally only used for single packages under 20 lbs. Anything above that can become cost-ineffective.
As a manufacturer, you’ll generally only use this service when ordering product samples.
Freight shipping is another common form of commercial shipping. Rather than sending an individual box or two, you’ll generally send a shipment that fills up a portion of a truck (LTL, or less-than-truckload) or fills an entire shipping truck (FTL, or full-truck-load).
Freight shipments may be transported by truck, van, or airplane as well. This type of shipping is used for shipments large enough to warrant the use of a truck, but not so large that it warrants using a container.
Freight shipping also allows for the shipping of virtually anything, so long as it’s packaged and declared appropriately. It can also be faster than the final option; container shipping.
The third main type of international shipping is the most widely used by corporations and manufacturers; container shipping.
Shipping via containers comes with very specific requirements. There are many things you cannot ship in a container. But there are many other things you can ship in a container, such as cars.
This is how most product moves across the globe. Massive cargo ships carry dozens, if not hundreds of shipping containers at a time, moving across the ocean from the country of origin to the final destination.
For very large shipments, this can be the most cost-effective option. But it can also be the slowest option, as boats travel slower, and can take a long time to unload at the port of destination.
When shipping via container, you have two main options, FCL vs LCL.
FCL vs LCL Shipping
So you are planning to ship products or materials from one country to another, right? Then you are probably starting to see terms such as FCL and LCL all over the place. But what do they mean, and what’s the difference?
FCL stands for Full Container Load. This means your contents are filling up an entire container, either 20 or 40 feet long. As a result, you are paying for the entire shipment cost of that container.
LCL stands for Less Than Container Load. This is when your contents don’t quite warrant an entire container. You can then split the cost of the container with another merchant by sharing space inside the container.
LCL shipping rates are often less than FTL, and much less than options such as air freight.
When to Use LCL Shipping
Many companies choose to use LCL shipping for various reasons. Some have no other option, as they are only receiving a small shipment. Companies that choose LCL over FCL are those who are choosing a lean inventory strategy.
Rather than sitting on larger amounts of inventory in their warehouse, which drives up costs as larger facilities are required, they opt for smaller shipments. They’ll choose to have multiple LCL shipments over the course of the year rather than one or two FCLs.
Using LCL shipping can also slow down your overall shipping speed. Sharing space with other merchants adds time. This might be time at the port of origin, awaiting the shipment from the other company. It can also be a delay at the port of destination, as customs generally takes longer for LCL.
And once the container does pass through customs, it has to go to an additional facility to be unloaded and separated before your goods finally head towards your warehouse.
As such, LCL is better suited to companies without super strict deadlines, as delays are out of your control. But working with a freight forwarder can help you determine the best shipping option for your needs, and can manage the process much more efficiently than those without experience.
Making the Most of International Shipping
Shipping across the globe is a daunting task that requires specialized knowledge and constant learning. If your company plans to move a lot of materials or products on a regular basis, it pays to establish a relationship with a freight forwarder who can always provide the best shipping options, such as LCL shipping or working with other merchants to create an FTL.
Working with a forwarder to determine the most efficient course of shipping will always be more cost-effective and less risky than trying to do it all yourself.
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