Ocean freight is on the rise, according to a report by Research and Markets. The research company has projected a 3% compound annual growth rate for this mode of transportation through 2025.i If that holds true, terms like LCL and its close cousin, FCL, will only increase in popularity as more businesses start moving goods via ocean freight.
If you’re one of those companies interested in ocean freight—or you simply want to learn more about this mode—we’ll walk you through exactly what exactly LCL freight is. We’ll also show you why it might be right (or not!) for your organization.
(And, if you have questions about any other terms, make sure to check out our Approved glossary of freight and logistics terms!)
What Does LCL Stand For?
Simply put, LCL stands for Less than Container Load, as opposed to FCL, which is a Full Container Load shipment. As the name implies, LCL cargo doesn’t take up an entire container by itself. Instead, several LCL shipments headed to the same destination are packed into a container together.
You’ll hear the terms LCL and FCL used around both ocean and intermodal freight that travels in containers. Road freight has its own set of terms with similar meaning: LTL (Less Than truckLoad) and FTL (Full TruckLoad).
What Is LCL Cargo? Is It the Same as LCL Freight?
Businesses that are moving goods don’t always need a dedicated container to themselves. In these cases, they can work with a freight forwarder to arrange an LCL cargo solution, in which a number of smaller shipments share a container headed to the same destination. In other words, LCL shipments allow you to pay only for the space you need, rather than the entire container.
“LCL freight” is just another way of referring to this method of consolidating multiple shipments into a single container for transport.
What Are the Alternatives to an LCL Shipment?
If you have enough cargo to fill a 20′ or a 40′ container, you’d likely arrange for an FCL solution. In this scenario, no one else’s shipments get loaded with yours. Instead, your cargo has the entire container all to itself.
On the other end of the spectrum, if you’ve got a small shipment that’s relatively light weight, you might consider air freight. Air freight is priced either by actual weight or volumetric weight, whichever is greater. To discover more, check out these five concepts you need to know about air freight.
What Are the Pros of LCL Freight?
Businesses with smaller shipments can save significantly by sharing a container, as opposed to paying for a dedicated container they can’t fill on their own.
Additionally, you might even be able to get a deal on your rate if you have the kind of shipment a freight forwarder is looking for. As they put together these consolidations, forwarders are always looking to complete balanced loads. So, if they have a heavy shipment that’s waiting to go to the Big Island and you have a relatively light one headed there, they might be willing to offer you a solid deal in order to call that load “ready” and get it on its way. (Learn more about the advantages of working with a freight forwarder.)
What Are the Cons of LCL Shipments?
Although LCL shipments can be cheaper, they don’t always move as quickly as FCL shipments. As we mentioned, freight forwarders generally hold their LCL shipments until they have a full load to send. So your shipment might sit in their warehouse for a bit until they’re able to complete their load. This is especially true if you’re shipping to a destination that’s not popular with other shippers.
Additionally, since other shipments are loaded in and out of the same container, there’s a slightly increased risk for damage to your shipment. Some shippers who move high-value items, such as luxury goods, may opt to pay for a dedicated container to ensure that their cargo is subject to the least amount of handling possible.
Finally, ocean freight can come with a number of industry-standard charges, whereas air freight is subject to a flat $20 handling fee. Depending on the size and weight of your shipment, you might want to consider an air freight consolidation, rather than LCL ocean freight.
Is LCL Related to LTL?
Yes—at least in terms of the concept. In an LCL shipment, you’re sharing an ocean or intermodal freight container, whereas in an LTL shipment, you’re sharing a truck trailer with other shippers.
- LCL = Ocean and intermodal freight (although these containers will likely travel over the road at some point during their journey from origin to destination!)
- LTL = Road freight
Finding the Right LCL Options for Your Business
If you’re looking for a forwarder who put together an LCL solution, we’d be happy to help. We can also help you decide whether ocean, intermodal, or air freight is the right solution for you. It all starts with a complimentary consultation with one of our experts. We’ll lay out all your options for you (in plain English!) and connect you with the right solution for your business.
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