In 2022, the freight transport market had an estimated value of $30.91 billion. By 2030, experts forecast its revenue to reach $72.97 billion.
A chief reason for that projected growth is the drastic increase in e-commerce. For instance, in the U.S. alone, 263 million. people shop online. By 2025, experts forecast that to spike to 291.2 million online shoppers.
So if you're about to start a business that sells products in and outside the U.S., you must decide on a freight option. For larger volumes, your two primary options are LCL and FCL shipment. They're both sea freight methods, but they have fundamental differences.
So what exactly do LCL and FCL stand for, and how do they differ? Most importantly, when should you choose which?
This guide addresses those questions, so read on.
What Is LCL Shipment?
LCL is an acronym for "less than container load." It describes shipment loads that don't fill an entire shipping container.
When you choose LCL shipment, you share the container with other shippers. You then only pay for the space, measured in cubic meters (CBM), that your shipments occupy.
What About FCL Shipment?
FCL stands for "full container load." It provides a single shipper full access to an entire shipping container.
So if you opt for FCL, no other shipper or entity can use it, even if you don't fill the container. However, because you're getting the entire container to yourself, you pay for it alone.
Choosing Between LCL and FCL
Whether to choose LCL or FCL depends on your shipping requirements.
The top factors for consideration are shipment volume, price, security, and transit time. But, of course, you'd also want to choose the best freight forwarder with a stellar reputation.
Consider the following to help you decide when to use LCL or FCL.
FCL is ideal for shipping large volumes of goods that can fill 20- to 40-foot containers. However, you can choose this method even if your shipments won't fill the entire container. For example, if the difference isn't that big, such as when your shipments only take up 17 feet of a 20-foot container.
When you choose LCL, remember that your shipment gets consolidated with others.
For that reason, LCL makes more sense than FCL for smaller-volume shipments. That's also why LCL is a good starting point for small businesses with lower shipment loads. Most freight companies accept shipments for LCL if they're between 1 and 10 CBM.
If you only ship items under 1 CBM weighing less than 440 pounds, go with air freight.
LCL is a good option for shippers looking for lower-cost freight service. For instance, it often costs less than FCL because you only pay for a portion of the container.
However, LCL can sometimes cost more, depending on your shipment's space requirements.
Suppose your goods' volume only totals 10 CBM, but they can't have anything stacked on top of them. In this case, you'd also have to pay for that space that other shippers could have used.
Total Transit Time
FCL is the preferred choice for shipments that require faster overall transit time. This is because they have shorter processes from start to finish.
For one, FCL shipments have reduced handling processes. This is because the freight forwarder only needs to sort your shipments, no one else's. As a result, they can deliver it much quicker to the intended recipient.
So as soon as you've finished loading the FCL container, the freight company can begin its journey. Then, upon arrival at the destination's port, the entire container gets unloaded.
Since the contents are for a single recipient, they don't have to undergo sorting. Instead, they get delivered to the final destination after unloading.
LCL shipments take longer since they undergo more processes than FCL. For starters, you'd have to wait for a container used in an LCL to fill up with other shippers' goods. Only after that would the freight company start its transit.
Upon arrival, the contents of an LCL container undergo sorting and de-consolidation. This can add a few more days before your shipment can get delivered to its recipient.
Another factor that can make LCL shipments take longer is custom inspection. While you may have followed all laws of the destination country, you can't say the same for other shippers. If they ship suspicious items, customs can decide to hold on to the entire LCL container.
Safety and Security
Cargo theft costs U.S. businesses an estimated $15 billion to $30 billion annually. Thus, you should do everything possible to reduce your theft risks.
Opting for FCL is one way to do that, as it usually has a lower theft risk than LCL. After all, with FCL, you're the only one who can use the container. That can help reduce the risk of potential theft.
There's also a lower risk of shipment loss with FCL because of their isolation from other items. Also, fewer people will handle your goods, as there's no need for de-consolidation.
FCL shipment also has a reduced risk of shipment damage, as it's up to you how you'd fill the container. For instance, you can specify which goods are fragile and should not have anything placed on them.
What if paying for FCL isn't practical, such as when you're shipping goods under 10 CBM? In this case, invest in freight insurance to safeguard your shipments. It protects against damage or loss during transit due to unforeseen circumstances.
Choose the Right Shipment Method
Now that you know how LCL and FCL shipment methods differ, it's time to make an educated decision. Remember that LCL could be ideal for lower-volume shipments but takes longer than FCL. On the other hand, FCL may cost more initially, but it's much faster, safer, and more secure.
If you're looking for more shipping-related news, we have you covered. Check out our travel and logistics page for the latest on these topics!