LCL Shipping: Definition, Charges & More

If you plan a small freight shipment, and your goods cannot take up the space of one container, LCL shipping is what you need.

  1. Definition of LCL
  2. Cost of Shipping LCL
  3. Advantages of shipping LCL
  4. Is LCL Right for you?
LCL (Less than container load)
LCL (Less than container load)

Definition of LCL

LCL stands for less than a container load and describes sea shipping for cargo loads not large enough to fill a full 20ft or 40ft shipping container

Since LCL shipments fill less than a full 20ft or 40ft shipping container, these are grouped with other cargo. FCL and LCL are 2 main forms in sea freight shipping. As the names suggest, LCL means that the merchandise takes up less than entire space of a full container. FCL means having an entire container for yourself

Cost of Shipping LCL

The cost of an LCL shipment is calculated based on the actual volume or the space that the shipment occupies in a shared shipping container, which is usually at a minimum of 1 CBM. If the total volume of the load is less than the minimum, then the charges will be considered as 1 CBM. That being said, even if your goods take far less space than the minimal requirement, you will still be obligated to pay the cost for the minimum volume.

If ocean freight is calculated based on the actual volume, air freight charges either by the gross weight or the volume weight, whichever is higher. For example, a 0.8 CBM shipment with a gross weight of 50kg will have a volume weight of 160kg when shipped using Air express. If sent using LCL, the cost will be based on the ocean freight’s minimum of 1 CBM.

Advantages of shipping LCL

Save cost: You can ship your products by LCL as soon as they come off the production line without breaking your budget.

Truncated shipping times: It ensures that your customers get the product they need, when they need it. Also save on inventory and warehousing costs.

Flexible: Consolidation providers consolidate shipments from several customers to fill an entire container, and you will only pay for the space you use. You can choose a reliable freight forwarder if you need LCL service. TJ China freight is your optimal choice if you need China freight forwarding service.

Is LCL Right for you?

If you’re not sure which one to choose, LCL or LCL? Feel free to contact our expert forwarder team of TJ China freight. We’ll run you through making the best decision for your shipment.

International Cargo Booking Service from China

International Cargo Booking Service from China
International Cargo Booking Service from China

Booking is simply the process of booking a space for your cargo from a shipping company in order to use their shipping company. This article explains some of the main steps to take before booking a LCL shipment with a freight forwarder. These precautions help you handle LCL shipments with your forwarder for smooth delivery and cost savings.

Cargo booking regarding transit time

First of all, don't expect the goods to arrive faster than the whole box. As a reminder to exporters, when booking LCL shipments with a forwarder copy, the cargo will be stuffed into the container as the cargo is a Less Container (LCL), once the forwarder has received enough cargo to make the container 'full' instead Receipt. The place of receipt may be close to the port of loading or container freight station, far from the port of loading depending on where your factory is located, export cargo is booked.

Second, they may have one or more transshipment ports before the goods reach their final destination. There may also be a delay of one or more days at the transfer point. Before appointing a freight forwarder, you need to have a clear understanding of the arrival of the goods at the destination. Have your forwarder provide you with the closing date (container packing date), the planned vessel schedule, the vessel schedule at the transshipment port (if any) and the estimated time of arrival (ETA). Once the cargo booking is delivered to the forwarder, the arrival schedule is properly monitored according to the planning details given by them.

Get a quote before booking

If any shipping is involved, what is the cost of inland shipping? How much is the sea freight to the final destination port, etc.? As the cargo booking is for Less Container Load (LCL), the freight forwarder quotes a fee per cubic meter basis (CBM basis). Learn how the CBM is calculated if the weight is more.

Destination service fee

Get written information from your local freight forwarder about "the amount of the fee, what their counterparty at the destination charges your buyer." This is important because in the LCL world, different freight forwarders charge different "delivery note fees" to the consignee. Because, as the forwarder gets to know each other at the port of loading and the final destination, the price quoted at the port of loading may be lower, but the “freight” price at the final destination is higher. Here, once the excess is charged to the consignee at the port of discharge as a "Bill of Lading fee" and a certain "rebate" is refunded to the forwarder at the port of loading!

Booking type

Shipping incoterms are international standard codes used to determine when and where to transfer cargo bookings between suppliers and importers.

For example, FOB (Free on Board) only includes transportation from the factory to the port of destination (ie, Hong Kong). In addition, FOB also includes all export formalities that are necessary to ensure that the goods can be exported legally. However, from the port of destination, you must arrange for transshipment to the final destination.

You can also pre-order DAP (Delivered in Place), which includes shipping from a factory in China to a designated address overseas. For example your office or warehouse when the cargo is booked.

Huiyang Shipping’s first-quarter profit tripled year-on-year

The crisis in Russia and Ukraine pushed up the freight rate of bulk carriers, and the performance of Huiyang Shipping in March and the first quarter both hit record highs.

On April 6, Huiyang Shipping announced its financial report. The revenue in March was NT$2.203 billion (approximately RMB 486 million), and the self-settled operating profit was NT$1.139 billion (approximately RMB 251 million). The monthly pre-tax profit was NT$1.175 billion (approximately RMB 259 million).

The financial report shows that in the first quarter, Huiyang Shipping’s revenue was NT$5.754 billion (approximately RMB 1.269 billion), and its pre-tax profit was NT$2.777 billion (approximately RMB 612 million), three times that of the same period last year. , a record high for the same period of the previous year, with an average operating profit rate of 48%.

Huiyang Shipping said that the global dry bulk shipping market is still affected by the crisis in Russia and Ukraine. At present, due to the surge in oil prices and the transfer of raw material importing countries to other countries for procurement, the voyage has increased. These factors may increase the freight rate. However, whether the demand for raw materials is It can be fully supplemented by other regions, and the impact of subsequent economic sanctions by various countries still needs to be continuously observed.

On the other hand, the epidemic in mainland China heated up again in late March, and the first-tier cities along the coast were shut down due to epidemic prevention, resulting in a slight decline in the market volume. However, Huiyang Shipping believes that this is a short-term impact, and there is a possibility of demand recovery sex.

In terms of fleet planning, Huiyang Shipping received the 37,800-dwt handy-sized high-specification energy-saving and environmentally friendly bulk carrier "Bunun Treasure" delivered by Imabari Shipbuilding in Japan at the end of March, and has signed a stable charter. Up to now, the company's fleet operates 139 ships, with an average age of 7 years. The fleet size and the proportion of energy-saving ships are in a leading position in the industry.

Looking forward to 2022, Huiyang Shipping still maintains an optimistic attitude. Due to the rising freight market and raw material prices in recent years, the construction cost of bulk carriers has increased by about 30%-40% on average compared with the same period last year. The number of orders on hand for cargo ships is still low, and after the new environmental protection regulations hit the road in 2023, it is expected that the elimination of old ships will make the supply of capacity even tighter, and Huiyang Shipping maintains a consistent and stable ship purchase policy, which will give it a more competitive advantage.