LCL meaning: What is less-than-container load?

If you’re frequently shipping smaller volumes of goods or testing the sales potential of newly released products, paying the full price for a container adds unnecessary costs that can hurt your bottom line.

Less-than-container load (LCL) shipping is a method that involves consolidating your goods with other shippers’ items. By sharing container space and fees, all parties can benefit from reduced shipping costs—enabling you to access the benefits of containerized shipping despite transporting smaller volumes of goods.

Keep reading to learn the definition of LCL and the pros and cons of this shipping method.

What you’ll learn 

What LCL is and when it’s most useful

Financial advantages of LCL shipping

Distinctions of LCL vs. full-container-load (FCL) 

TL;DR:

Key takeaways 

LCL helps reduce your carbon footprint through more efficient use of shipping resources.

Companies can ship as little or as much as needed, making LCL particularly adaptable for varying business needs.

LCL may not be suitable for time-sensitive shipments due to additional handling time required.

Risks include customs delays, damage during consolidation/deconsolidation, and less control over scheduling.

LCL Meaning

Less-than-container load (LCL) is a type of freight shipping that’s used for goods that do not fill an entire container. Rather than a single shipper paying for an entire container, the container space and costs are shared with multiple parties.

LCL is used frequently in shipping, trucking, air freight, and rail services where containerized goods need to be transported between two locations. Because containerized shipments are often priced by volume, it’s especially useful for small but heavy items that can be tightly packed together.

For businesses launching new products, LCL shipping offers a cost-effective way to assess market demand without committing to full container loads of inventory.

NOTE: LCL refers to shipping containers, while less-than-truckload (LTL) refers to trailers. Both operate on the same principle that your shipment shares space with other shipments within the transport medium.

Benefits of shipping LCL

The main benefits of LCL shipping include:

• Cost savings.
  Using LCL, you only pay for the portion of container space occupied by your goods—rather than paying for the entire full-container-load (FCL). Similarly, you won’t need to pay for container storage space at your destination.
• More flexibility.
  If you have smaller shipments that don’t justify a full container or inconsistent shipment sizes, LCL enables you to take advantage of containerized shipping without the extra costs.
• Reduced environmental impact.
  Sharing container space with other parties means fewer containers required to ship goods, reducing your global footprint.
• Scalability.
  LCL shipping allows businesses to scale shipping as sales grow, allowing you to avoid FCL shipments until they become economically viable.
• Rapid deployment.
  If you need to ship smaller quantities of goods more frequently—for example, when testing the market viability of new products—LCL enables you to meet market demand faster without waiting to fill a full container.

In short, LCL is an optimal method if you wish to attain the benefits of shipping containerized goods while avoiding the added costs and environmental impact of FCL shipments.

Disadvantages of LCL shipping

Although LCL can be a practical solution in many cases, it comes with a few added risks and downsides.

The main disadvantages of LCL shipping include:

• Shipping delays.
  LCL shipments require additional handling time to consolidate and deconsolidate, and they may involve extra stops or transfers as other goods are added to the container load.
• Customs delays.
  Mixed-item shipments can take longer to process during customs inspections as they carry multiple bills of lading. If another party’s goods fail the inspection, your shipment may be further delayed.
• Higher risk of damage or loss.
  Consolidated goods are at risk of being misplaced, damaged, stolen, or mixed up with other shipments during deconsolidation.
• Less control.
  Shipping LCL means submitting to the schedule and container-packing process of the consolidator, which may not align with your preferred timeline or packing methods.
• Higher hidden costs.
  While LCL is cost-effective compared with FCL for smaller shipments, the volumetric or per-unit weight costs are typically higher. There may also be extra fees for handling, documentation, and consolidation.

PRO TIP: Customs clearance is the process of passing goods through customs so they can enter or leave a country. LCL shipments may face longer customs clearance times due to the complexity of mixed shipments.

Less-than-container load vs. full container load (FCL)

LCL is one of two transportation methods for containerized goods. It differs from FCL, where all the goods in a container are owned by the same party.

Here’s a quick summary of the differences:

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To learn more about Red Stag Fulfillment’s logistics services, get in touch today for a friendly chat about how we can help your business thrive.