Less-than-Container-Load or Full-Container-Load? That is the question.
Why would someone go with LCL if it usually costs more per unit of freight than FCL?
Cash Flow – It may not be a good idea to put up the money for inventory if it won’t move that quickly. The expense of taking up warehouse space may cut into the savings, and possibly cost more money in the end.
Storage Space Availability – Smaller volumes equal less space used for storage. Purchasing less will help keep your inventory lean. Whether the reason is to keep cash flow available or the lack of storage space available, this is a major factor for many companies when choosing LCL.
Delivery Appointments – Sending a full container load to a final destination is not always ideal considering the container must get picked up, delivered, unloaded, and returned to the port within about 8 days. After that grace period, the demurrage and/or per diem fees start piling up.
Keep in mind that there is not only a question of capacity, but also labor for unloading availability. A warehouse may not have enough manpower (or lumpers) to unload that container within that time period.
An LCL shipment typically has a longer “free” period. About 5 days to pick up at the port, and another 7 days for de-consolidation at a warehouse. This gives a customer more time to lock in a delivery appointment.
Multiple Final Destinations – Split up your shipments if the final destinations only need part of that container. Just imagine all the suppliers/vendors trying to send a full container to every fulfillment center.
What are the advantages of shipping a Full Container Load?
Quicker Delivery – There is nothing to split up and the full container goes to the final destination. LCL needs to first be consolidated before shipping, has multiple documents per container, and has to get sorted once it reaches a de-consolidation warehouse.
Lower cost per freight unit – It is easier to fill a container and send it to a single final destination. The total cost is not always cheaper though since getting charged demurrage and/or per diem fees gets very expensive if the container is not delivered, unloaded and returned within the grace period.
Contact BOA Logistics for Drayage Services
With some insight on why one would choose LCL or FCL, there are many opportunities to streamline your logistics with BOA. Contact us to book your ocean freight!