Should I ship by LCL or FCL?

Should I ship my freight with FCL (full container load) or LCL (less than container load)? We lay out the different variables to consider in this post to help you make your decision.

LCL lets you keep inventory low

If you don’t have the money or space to accommodate a full container at your warehouse, it makes sense to use LCL. LCL lets you ship in smaller volumes so that you can keep your inventory lean. Instead of purchasing large quantities from suppliers, you can use LCL to keep a steady flow of inventory in smaller quantities. That frees up cash flow for other purchases.

FCL is cheaper than LCL

LCL costs more than FCL per unit of freight. That’s because freight agents prefer a full container load rather than to figure out how to bundle many LCL shipments in a full container. In addition, many importing fees are fixed, which means that you have to pay them regardless of how large your container is.

FCL gets delivered more quickly than LCL

When an FCL shipment arrives at port, it’s unloaded from the vessel and delivered to the buyer. It’s more complicated for LCL: someone has to consolidate different shipments, process multiple documents per container, and then sort goods for each customer. Every point could be delayed. At origin, the cargo has to be grouped together to fill a container. At destination, there’s a greater risk of examination by customs: When one shipment in a container gets flagged, every shipment has to be checked. That can cause delays of days.

LCL increases risk of damaged goods

If you ship LCL, you have no control over the cargo that will be loaded in the same container as your goods. There could be more dangerous objects traveling in the same container, like liquids, heavy weights, smelly objects, etc. Instead of knowing exactly what’s going into a container, you have to prepare for the risk that your shipment will be damaged. In addition, given the additional complexity of going to multiple places, there’s a greater risk that your cargo gets misplaced or lost.

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If you’re able to structure shipments together into an FCL without having too high of inventory costs, it probably makes more sense to ship FCL.

By Brandon Kronitz, operations associate at Flexport.