What are LCL and FCL in shipping?

LCL, or Less than Container Load, is a shipping method where your goods share space in a container with shipments from other individuals or businesses. Instead of booking an entire container, you only use the portion required for your cargo while others occupy the remaining space.

This option is ideal for smaller shipments, such as boxes or pallets, that do not require a full container. With LCL, you only pay for the space your cargo occupies, making it a cost-effective solution for transporting small volumes. 

By sharing container space and costs, LCL offers flexibility and affordability for businesses or individuals shipping limited quantities.

FCL, or Full Container Load, is a shipping method in which an entire container is reserved for your cargo. You pay for the full container, regardless of whether it is completely filled.

FCL is ideal for businesses or individuals who have enough goods to fill a container. The container size, such as 20-foot or 40-foot, plays a key role in determining whether this option suits your shipment. For example, you might have enough cargo to fill a 20-foot container but not a 40-foot one. Even if your goods do not completely fill the container, many businesses still choose FCL when the cost difference is minimal.

This method ensures that your goods travel securely without sharing space with others, making it a preferred choice for large shipments or when privacy and direct delivery are priorities.

Also Read: Different Types of Containers Used in International Shipping

Choosing between FCL (Full Container Load) and LCL (Less than Container Load) shipping is not just about the size or cost of your shipment. Both options have unique features that can impact your shipping experience. Here are some key factors to consider while going through FCL LCL shipping terms and deciding which option is best for you:

Security

FCL shipping provides enhanced security since your goods are stored in a dedicated container. This reduces the risk of damage, theft or loss, as your cargo is not mixed with others.

On the other hand, LCL freight involves more handling because shipments from multiple businesses share the same container. While experienced shipping providers minimise risks, FCL offers greater peace of mind for high-value or fragile goods.

 Speed 

FCL shipping is generally faster than LCL. With FCL, your container is loaded, transported and unloaded without delays caused by sorting or separating shipments.

In contrast, LCL freight can take longer as goods need to be consolidated before departure and separated at the destination port. Plus, LCL shipments may face delays if the container is not fully loaded or if other shipments are late.

Flexibility 

LCL shipping offers more flexibility if you need to send goods to multiple destinations. For example, if you are shipping to various cities in the USA, you can divide your cargo across different shared containers. This saves time and money by reducing the need for warehousing and sorting at the destination port.

FCL, on the other hand, is less flexible as the entire container is dedicated to one shipment and destination.

 Cost 

While FCL might seem more expensive initially, it is not always the case. LCL freight is charged based on the space your cargo occupies (measured in cubic meters or CBM). If your shipment takes up a significant portion of a container, paying for an entire container with FCL might be more cost-effective.

Calculate the cost per CBM carefully and compare it to the cost of a full container to make an informed decision.

Availability 

During peak shipping seasons, such as before major holidays like Chinese New Year, FCL containers can be in high demand and harder to secure. In such cases, LCL shipping might be a more practical choice, as shared containers are often more readily available.

Volume 

The volume of your shipment is a crucial factor. For smaller shipments, LCL is a better fit as it allows you to share space and costs. For larger shipments that can fill a container or come close, FCL is usually the better option. 

For instance, some providers have specific volume limits for LCL, such as a maximum of 3,000 kg or 29 CBM for single packages.

Now that you know the FCL LCL meaning in logistics, let us consider an Indian company shipping goods to China for distribution to multiple retail stores to understand the FCL/LCL shipping process:

• Transportation to Port: The Indian company transports its consignment by truck to the nearest port, such as Mumbai or Chennai.
• Customs Clearance: The goods undergo customs clearance, ensuring all export regulations and documentation are in order.
• Container Loading: The shipment is unloaded from the truck and loaded into a container. If FCL is chosen, the entire container is filled with the company’s goods. If LCL is selected, the container is shared with shipments from other businesses.
• Loading Onto Cargo Ship: The container is securely placed on a cargo ship bound for China.
• Arrival at Destination Port: When the container reaches a major port in China, such as Shanghai, it is unloaded from the ship.
• Unpacking and Sorting: For LCL shipments, the container is opened, and the goods are separated and sorted according to the final recipients. For FCL shipments, the entire container is delivered directly to the consignee.

Choosing between LCL and FCL shipping depends on your cargo volume, budget and specific requirements. While air freight is faster and more reliable, ocean freight remains a preferred option for businesses due to its affordability and capacity. A single 20-foot container, for instance, can carry around 100 washing machines, making it an economical choice for large shipments.

LCL shipping is ideal for smaller consignments, where you share container space and costs. FCL is better suited for larger volumes, offering added security and faster processing times. Both methods have their unique advantages, and selecting the right one ensures efficient and cost-effective transportation.

No matter the choice, safeguarding your shipment with the right cargo insurance policy is crucial. It provides peace of mind and ensures your goods are protected throughout their journey across the seas.

TATA AIG offers comprehensive marine cargo insurance designed to safeguard your cargo against loss, theft and various risks. Features like robust risk management and support for seamless international trade ensure your shipments are protected throughout their journey.

 Why is LCL More Expensive Than FCL? 

LCL is costlier per unit because it involves bundling multiple shipments into one container, requiring more handling, documentation and formalities. In contrast, FCL shipments are simpler to process, as the container is dedicated to one consignee and destination.

How Are LCL Charges Calculated? 

LCL charges are based on "W/M" (weight or measurement), meaning the cost is determined by either the shipment's weight or its volume in cubic meters (CBM), whichever is greater.

Which Is Better for Urgent Shipments: LCL or FCL?

FCL is ideal for urgent shipments or those with strict deadlines, as it ensures faster delivery. LCL is better suited for shipments with flexible timelines.

 Is Marine Insurance Mandatory for International Shipments from India?

Yes, marine insurance in India is mandatory for businesses involved in transportation and commercial activities. Beyond the legal requirement, having marine insurance protects the financial interests of shipowners and cargo owners by covering the loss or damage of vessels, cargo and other maritime assets during international shipments.