If you are looking for a cost-effective way to ship goods from China to North America, one of the best options is less-than-containerload consolidation or LCL shipping. It allows you to ship smaller cargo loads and share the container space, and costs, with other shipping heading to the same destination port. It’s a good option for companies that lack the volume to ship in more cost-effective full container loads.
When you choose LCL consolidation services, your freight forwarder will arrange for transport from the origin port in China to the destination port in the U.S. or Canada, and will handle customs clearance and delivery to your final destination. You will be charged based on the volume or weight of your cargo, as well as additional fees for clearance, documentation or last-mile delivery.
What are the benefits of LCL consolidation services from China to the U.S. and Canada?
Here are a few:
- Save money by sharing shipping costs with other small-volume ocean shippers. If you work with a freight forwarder that has pre-booked carrier capacity for a regular consolidation shipment, you can take advantage of the attractive rates they have locked in with carriers.
- Keep inventory levels lean by ordering in lower, regular volumes from suppliers.
- Ship out quickly since there is no need to wait to fill a full container. Also, consolidated loads tend to ship direct from port to port, with no stops.
- Minimize your carbon footprint by shipping via sea vs air.
LCL consolidation services can also be an option for air freight shippers. For example, Dimerco works with a large semiconductor company that shifted from air freight to LCL for products that were not as time-sensitive, saving more than 30% vs the cost of air. This customer takes advantage of set weekly consolidations to move goods reliably and predictably.
Benefits of LCL for the Importer of Record
The most common incoterm for international transactions when shipping sea freight is FOB (free on board). With FOB, the seller (in this case, a supplier in China) is responsible for loading cargo onto the ship and all related costs. From that point, the Importer of Record (IOR) in North America assumes all costs and risks.
When buying FOB, the shipment process becomes much more convenient for you, as the IOR, if you can convince suppliers to use your designated forwarder for a single LCL service. A forwarder with a full suite of services and offices at origin and destination can serve as a one-stop solution for door-to-door transit and customs clearance, saving considerable time and hassle working with different agents and customs brokers.
One of the most beneficial applications of ocean freight consolidation services from China to the U.S. and Canada is a buyer’s consolidation service.
While LCL shipping involves the consolidation of freight from different shippers to different consignees based on a shared destination hub, buyer’s consolidation involves the consolidation of multiple shipments for the same buyer or consignee.
Buyers consolidation is ideal if you are purchasing items from multiple suppliers in the same country. You arrange with a forwarder to coordinate with suppliers on the logistical details and enjoy the following benefits over straight LCL shipping:
- More economical full container shipping rates.
- Faster, more cost-effective shipping – the container can go straight to you; there’s no need to de-consolidate your cargo at a CFS, thereby eliminating warehouse handling and extra transportation costs. This can save you 5 or more days.
- Simpler shipping – no need to track multiple supplier shipments.
- Faster customs clearance – all documents from multiple suppliers are submitted together.
- More control – you can select a specific sailing and date for the load, based on the options provided by your freight forwarder/NVOCC.
Here’s an example of a buyers consolidation service at work:
A US manufacturer uses Dimerco to consolidate shipments from different suppliers in China and ship them door-to-door to different consignees in Toronto, Canada and Buffalo, NY. Goods ship as LCL in a single container to Toronto where they are divided for final delivery locally and to Buffalo. The customer gets a better rate due to the consolidation. Ultimately, Dimerco’s customer can move cargo faster than waiting for each consignee to order enough to fill one container. Everyone in the chain pays less and the consignees get their goods faster.
Are there downsides to LCL consolidation?
There’s are some downsides to sharing container space with other shippers.
- Longer lead times – LCL loads must be built at origin and deconsolidated at destination.
- Increased risk of damage – your goods will be handled more frequently at the origin and destination CFS. Also, you’re not always sure what kind of cargo will be placed next to or on top of yours, making it difficult to know how to package your shipment for maximum protection. NOTE: the right logistics partner can mitigate this challenge by following container load plans and backing that up with photos illustrating that proper measures were taken.
- Your shipment could be delayed by Customs, even if the inspection involves another company’s cargo.
Do you need an LCL consolidation partner for container shipments from China to North America?
If you are an Importer of Record in the U.S. or Canada and see the clear advantages of either pure LCL consolidation or a buyer’s consolidation program, the most important thing you’ll need is the right freight forwarder that can deliver the best consolidation service at the lowest cost. Here’s a list of the things to look for:
- One-stop partner – a forwarder that can handle all freight, warehousing and brokerage services at origin and destination. It makes your job easier when coordination is handled by the same company with global offices, including locations in China and near your destination port in the U.S. or Canada. Communication and billing is easier. And there is one point of accountability, with no finger pointing.
- Direct port-to-port service. Make sure the container is not stopping at other ports before reaching its final port destination. For consolidated containers, Dimerco will always ship direct.
- 24/7 visibility to freight status. Make sure the forwarder provides up-to-date reporting of shipment status online.
- Bonded warehouses. This could be relevant if you seek a cash flow advantage by deferring duty payments until items are shipped out to the buyer.
- Regular schedule of consolidated shipments. This is probably the most important criterion. You want reliability in your shipping schedules. That requires a partner with significant outbound freight volume from China to North America. Dimerco, for instance, has a set schedule of LCL consolidations from China’s top production hubs. In fact, Dimerco’s offices in North America work closely with sister offices in China to ensure they have the volume to sustain this consolidation schedule. Below is just a partial list of Dimerco LCL consolidations from China and Taiwan to North America.
Dimerco LCL Consolidation Schedule from Mainland China and Taiwan to North America*
|Origin||Destination||Frequency||Cut Off||ETD||Transit Time|
|Shenzhen||Toronto||Weekly||Wed||Next Tues||28 days|
|Shenzhen||Montreal||Weekly||Wed||Next Tues||30 days|
|Shenzhen||Vancouver||Weekly||Wed||Next Fri||17 days|
|Shanghai||Los Angeles/ Long Beach||Weekly||Fri||Next Thur||15-16 days|
|Ningbo||Toronto||Weekly||Wed||Next Mon||24 days|
|Ningbo||Montreal||Weekly||Wed||Next Mon||25 days|
|Ningbo||Los Angeles/ Long Beach||Bi-weekly||Wed||Next Mon||15-16 days|
|Ningbo||Chicago||Weekly||Fri||Next Wed||28 days|
|Taiwan||Vancouver||Weekly||Mon||Next Wed||14 days|
|Taiwan||Toronto||Weekly||Mon||Next Wed||26 days|
|Taiwan||Los Angeles/ Long Beach||Bi-weekly||Wed||Next Tue/Fri||14 days|
*Dimerco also organizes LCL consolidations from Hong Kong to Vancouver and LA/Long Beach, from Shanghai to Chicago, and from Taiwan to Chicago.
Even though your shipment may need to go to an inland point in the US, like Dallas, sending the consolidated shipment to Los Angeles is still the most efficient strategy when combined with Interior Point Intermodal (IPI) services. Dimerco, for instance, can service 70+ U.S. cities from Los Angeles with IPI services.
Is it time for a container shipping check-up?
Each year you visit the doctor for your yearly check up looking for the answer to one question: “Am I healthy?”
Well, you can do the same for your global shipping program. By asking some basic questions about your freight, volumes, trade lanes, and shipping frequencies, the global freight experts at Dimerco can provide a quick diagnosis to determine if there are opportunities to capitalize on LCL consolidation or other cost-saving strategies. Reach out to start a conversation.