With the world becoming more interconnected than ever before, most things rely on shipping to get to where they need to go. In fact, shipping has made both buying and selling items easier than ever before, as you can technically buy something anytime, anywhere, and have it delivered to your doorstep. That being said, the shipping industry does have a few terms and acronyms that are often mentioned depending on what shipping method you use, such as FCL and LCL. But what do they even mean, and which one should you pick? If you are confused, we have fortunately listed and explained these terms below, so feel free to keep on reading to learn more about them!
What is FCL?
FCL shipping specifically refers to a shipping method using sea freight, which is where your goods are loaded onto containers and stored on a shipping vessel for transit – usually overseas. FCL, standing for full container load, is where you hire or rent out an entire shipping container to transport your goods. That being said, you are not necessarily required to fill up the entire container – just that you have rented it exclusively. When using FCL, there is a flat rate for the entire container, and you have access to its entire space. So, if you are looking to ship more than 20cbm of goods, then FCL is generally considered a better option.
Another thing to remember is that aside from your supplier and customs (if there is an inspection), no one else is going to touch your shipment, which is good if your items are either valuable or fragile.
What is LCL?
FCL is basically everything FCL is not. LCL, standing for less than container load. Refers to a shipping method where instead of filling an entire container with your goods, you are instead sharing the same container with other shippers. This shipping method is well suited for those who do not have enough stock to fill out an entire container load, so instead, you only pay for the space that you end up using. This makes it a more cost-effective option for small to medium-sized businesses, as well as first-time importers who are looking to test the waters. So, if you are looking to ship a small volume of items (so over 0.5cbm and 100kg), then you can consider checking out this shipping method.
Advantages of FCL and LCL:
As you may have already guessed, both FCL and LCL shipping methods have their own advantages and disadvantages. So, the option you go for will depend on which one is more suitable for your needs. Most likely, the size and volume of your shipment, as well as the cost of shipping will dictate which one you eventually choose to use. If you are still in the middle of deciding which one to go for though, we have listed a few advantages to each method that may help you to make your final decision.
FCL is cheaper per CBM: While FCL may look more expensive at first glance, it is actually surprisingly cheaper per cubic meter (cbm)! This is because you just pay a flat fee for the use of an entire container, regardless of how much space your goods actually take up inside – so you are technically not paying for the amount of space that you use. So, if you use the space efficiently and creatively, then you could actually keep costs down by using FCL.
LCL is cheaper to ship small volumes: Although in the long run, it is actually more expensive to ship per cubic meter, because most LCL shipments start from 0.5 cbm it can be a lot more cost-efficient for smaller shipments. This is because you only pay for the volume that you are using in a container. This makes it great for small to medium-sized businesses – especially e-commerce businesses, that may not have a lot of stock or a large production line, but still want to utilize sea freight to distribute their goods to overseas customers.
Order and stock control
FCL requires specific volumes: When you use FCL, you need to ship a certain volume. This is to make it a suitable option for your business. For instance, if you are a startup or do not have a large production line, then committing to using a container with the expectation that you will fill it with a large amount of stock may not be practical or feasible.
LCL is very flexible: LCL can be a lot more practical for smaller businesses because you technically do not have to hit a certain ‘level’ of stock to make it cost-efficient to ship it. This is because if you do not fill the container for FCL, you are technically just paying to ship fresh air. With LCL, you can import as little stock as possible, without needing to worry about whether it is cost-efficient to do so or not.
When it comes to FCL, only your suppliers and customs (if inspection occurs) will touch your goods. This helps to reduce the chance of your goods being damaged, misplaced, lost, or stolen. When FCL shipments are loaded into a container and the container sealed, the container is delivered to you still sealed. So, even if you are transporting a large variety of fragile or valuable goods, it is unlikely that they will get damaged through transit.
On the flip side, LCL shipments change hands a lot more often. This is because you are sharing the container space with other people’s shipments, meaning that it takes time to unload and sort through them, so the goods go to the right destination. Because there are a lot more hands touching your goods, there is a higher chance that things may end up breaking, being misplaced, or stolen during transit.
When it comes to how fast the shipment will take to reach its final destination, transit time on FCL shipments generally are faster in comparison to LCL. This is because LCL shipments combine multiple people’s goods in one container, so there tend to be additional steps when goods need to be loaded and unloaded. Whereas with FCL, because you have rented out an entire container for your own use exclusively, the shipment can travel directly to its final destination. As such, if you are somewhat strapped for time, it may be worth using FCL instead.