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Glossary Shipping Terms

LCL Cargo

When it comes to container shipping, there are several service types that are in use usually represented in documents as either FCL/FCL, LCL/LCL and other variations of the same.

LCL is the abbreviation for Less than Container Load. In an LCL shipment, multiple LCL cargoes belonging to multiple shippers and consignees are packed into a single container for shipment.

Shippers who ship LCL cargo are usually shippers who do not have enough cargo to fill an entire container. Therefore, for them, it makes sense to use and pay for only a certain amount of space that they use.

Naturally, therefore, an LCL container is not handled by an individual shipper, but by an LCL operator.

Depending on various countries, LCL cargo is handled either by a shipping line or a cargo consolidator.

Clients deliver their LCL cargo to the packing station (CFS – Container Freight Station). The LCL operator then tags the LCL cargo to the various destinations that it is meant for.

Once they have received enough cargo from various shippers to a certain destination, they will then consolidate the LCL cargo and pack it for the destination.

The LCL operator will issue an individual bill of lading to each of the LCL cargo shippers. Depending on who the LCL operator is, it could be a direct bill of lading from the carrier or a house bill of lading from the consolidator, NVOCC or freight forwarder.

When a consolidator accepts an LCL cargo, they accept the responsibility from the CFS (Container Freight Station) at the port of load till the CFS at the port of discharge. This should normally also include any responsibility for cargo damage during packing of the cargo into the container (unless there are specific exclusions in the trading terms of the LCL operator).

In countries where a shipping line offers LCL cargo service, they may do so only to a few main ports and not to all ports. If a shipper requires LCL cargo service to many different ports, it is better to use the services of a freight consolidator or groupage operator.

While performing a service more or less similar to the shipping line (in terms of LCL cargo only), a consolidator will accept cargo to various ports but may use a “hub” to consolidate the various LCL cargo that they receive.

For example, if Los Angeles based customers deliver LCL cargo to the LCL operator to be shipped to a popular import destination like Singapore, an LCL operator can most certainly fill up an FCL container with multiple LCL cargoes.

However, if Los Angeles based customers delivery LCL cargo to one of the not-so-popular destinations like say Ouagadougou, then the consolidator may send this cargo to their “hub” in Singapore.

Once this cargo reaches the Singapore hub, the cargo may wait for other cargoes from other ports of load bound for Ouagadougou in order for it to be consolidated into an FCL and shipped.

Therefore, while deciding to ship LCL cargo, especially to a not-so-popular destination, the shipper must remember and be prepared for a possible difference in transit time of an LCL cargo as compared to an FCL cargo.

So, if an FCL container takes 45 days from Los Angeles to Ouagadougou, an LCL cargo may take 60 days from same Los Angeles to Ouagadougou due to above consolidation process.

The  freight charges for LCL cargo are charged in proportion to the amount of cargo that has been delivered to the LCL operator and may be charged per revenue ton.

A very important point that LCL cargo shippers must remember is that because there is a possibility that the cargo maybe reworked there will be some extra charges that the shipping line and/or the LCL operator may charge the customer.

It is therefore very important that the LCL cargo shippers take extra precaution in  understanding the freight rate sheet that they receive from the LCL operator, benchmark and explore ways in which to lower ocean freight costs.

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