Making sure you’re getting the best deal when shipping your freight, either overseas or within the UK, can require an understanding of the terms and processes involved. For sea freight, an attractive option for economical shipping to ports across the globe, you may have seen the terms LCL and FCL.
Understand what LCL and FCL are with advice from professionals. At Allegro Freight Forwarding, we have over four decades of experience in dealing with freight of all shapes, sizes, and channels. In this article we’ll discuss what LCL and FCL are along with their differences and individual benefits.
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LCL and FCL are incoterms – a type of term that shippers, suppliers, and freight forwarders use to describe assets and their considerations as part of supply chain management.
LCL stands for “less-than container load”, while FCL stands for “full container load”.
An LCL shipment is one which doesn’t require its own container to ship and may be grouped with other items or shipments, while an FCL shipment either fills its container or requires a dedicated one.
Sea freight is the only place where LCL and FCL are used. Other methods of shipping either have their own terms, or don’t require any at all.
For example, road freight uses a similar structure to sea but has LTL and FTL (with the “T” being truck instead of container, while the rest of the term is the same). On the other hand, air freight forgoes incoterms and instead refers to items as for groupage or dedicated delivery.
How are LCL and FCL Different?
With their definitions out of the way, it is important to outline their differences. These include their use in defining the contents of a container, along with some of the inherent benefits that each method of transportation offers.
LCL makes use of the full space available in a container, grouping your products together with others with similar shipping requirements and the same port of call. This is a cost-effective way to transport goods via the sea but can end up being less expedient than other options available.
FCL means your assets will have their own dedicated container. This can reduce complications with the shipping process as they won’t need to be separated from other products if the freight journey takes multiple steps, and often means a quicker and more direct route can be taken.
However, with each of these options there are a number of benefits and specific use cases that determine when they are best to use.
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The Benefits of LCL vs FCL
With good tracking and freight management services, you should never be in a position where the location of your container or its contents has gone awry. However, there are a number of benefits to each LCL and FCL that you should consider when deciding which one to use for your product.
The Benefits of LCL Shipping
If you don’t have enough goods to fill a container, or you have enough to fill a container with a surplus, then LCL shipping may be a good consideration for your products. With a number of advantages, LCL shipping:
- Often more cost effective
- Provides an economical option for delivering small packages via sea
- Makes use of available, making it more environmentally friendly
- A good choice for non-urgent shipments using sea freight
The Benefits of FCL Shipping
A full-container load fills the entire shipping container, making it a great way to keep all your products in one place and ensure a speedy delivery. This doesn’t require filling the container but could lead to increased charges relative to your load’s size when underfilling.
Some of the key advantages to FCL shipping are:
- A dedicated service
- Direct transportation to your destination using boats
- Allows the shipment of hazardous content like batteries
- Can keep refrigerated goods like food and pharmaceuticals in good condition
You can choose the type of shipment yourself or leave it to a trusted freight forwarder who will ensure your shipment reaches its destination intact, on time, and at the best rates available. Get in touch to start benefitting today.
Find out more with our ultimate guide to freight forwarding >
Other Common Incoterms Used in Sea Freight
Understanding what LCL and FCL stand for, as well as their equivalences in other methods of freight transportation, can give you a good knowledge foundation when looking into shipping and freight forwarding.
You can further your understanding by learning some of the other common incoterms that are used in sea freight in particular. Some of the most common ones that may show up are:
EXW – Ex Works. This incoterm refers to buyers as the ones responsible for the entire supply chain of their order.
DDO – Delivered Duty Paid. This means the seller is responsible for the entire supply chain, this is the opposite to EXW.
FOB – Free on Board. This means the seller arranges and pays for delivering the goods to the ship, and the buyer pays for everything from there on.
CIF – Cost, Insurance, and Freight. CIF is similar to FOB but also requires the seller to manage the sea freight costs and insurance as well.
FAS – Free Alongside Ship. This is similar to FOB as well, but only requires the seller to deliver the goods to a named port rather than the ship itself.
Incoterms are one of a few aspects of shipping that need specialist knowledge to fully understand. Another common query people have is on the role of customs compliance and customs brokers during the freight forwarding process.
Find out more with our article on customs compliance with freight forwarding >