For smaller companies, ocean shipping expenses can eat up a good chunk of total revenue, so it pays to be a smart buyer of FCL and LCL container shipping services. This article will outline the various lower-cost ocean shipping services available, and which could make sense for your business. We’ll put particular focus on container freight from Asia into North America.
LCL vs FCL Container Shipping
When it comes to ocean shipping, the more you ship, generally the less you pay. Large-volume, ocean shippers pay the least because they ship exclusively in lower-cost full container load (FCL) shipments. FCL means your shipment fills an entire container. You’ll pay a flat rate for FCL service, whether the box is half-full or full.
Less than container load (LCL) shipping is used when your goods can’t fill an entire container and are consolidated at the origin point with cargo from other shippers whose goods are headed to the same destination port. You “share the ride” with fellow shippers, ultimately paying only for the space you use.
Who uses LCL container consolidation?
LCL container shipping is best for small to mid-sized companies who don’t have the volume to regularly fill a container. In general, if your shipment is 20 CBM or under, you’re better off shipping LCL.
Some manufacturers have customer agreements that require them to ship immediately upon production, so there is not an option to hold freight at the factory to build a full container. In China, the government offers an export VAT refund for sold goods that leave the factory bound for export. This financial incentive is another reason manufacturers there want to ship out in smaller, more frequent shipments.
The advantages and disadvantages of LCL container shipping
Types of LCL consolidation shipping
LCL shipping comes in a few different “flavors.” Let’s explore each.
LCL Shipping – Seller’s Consolidation
In seller’s consolidation, a large supplier in China, for instance, might be shipping to multiple customers in the U.S. and Canada. These separate shipments are loaded into a container at the factory and sent to the origin port and on to the destination port, where the individual shipments are deconsolidated and sent to different customers.
Seller’s Consolidation
LCL Shipping – Buyer’s Consolidation
A buyer’s consolidation service combines shipments from multiple suppliers bound for the same overseas customer. If you’re a North American importer, it’s ideal if you’re buying from multiple suppliers in the same region – let’s say the popular manufacturing hub of Shenzhen China. Buyer’s consolidation is generally done when the Incoterm is FCA Origin and the suppliers’ quantities are small. If, as the Importer of Record, you can have your suppliers use your designated freight forwarder at origin, the entire process becomes simple and cost-effective. First, you’ll pay the much cheaper FCL rate. Secondly, if you use a full-service freight forwarder with offices at origin and destination, they will provide a single-source solution for door-to-door transit and customs clearance.
Buyer’s Consolidation
LCL Shipping – Consolidation Box
Some large freight forwarders, like Dimerco Express Group, have a regular LCL consolidation service based on the large volume of ocean freight the company manages from Asia into North America. These containers are pre-booked with carriers and often move on a fixed schedule. Advantages of consolidation boxes include:
- Faster door-to-door transit time. A freight forwarder like Dimerco can move consolidation containers direct from the port to a nearby warehouse for deconsolidation and often ship to final customers the next day.
- Lower costs. Use of outside parties for warehousing and local trucking adds complexity and cost markups versus getting a single, transparent invoice from a full-service international 3PL.
What to look for in an LCL container consolidation partner
If you are in the market for a reliable partner for LCL container shipping services from China to North America, look for the following characteristics:
- Enough volume to sustain regular consolidations. You want reliability in your shipping schedule. Predictable sailing dates for consolidation boxes helps.
- Direct offices at origin and destination. Otherwise, you must reach out to multiple partners for answers on freight status and other questions.
- Single-source, end-to-end services – from origin to final destination. That includes land side trucking, along with CFS, NVOCC, and customs clearance services. This advantage also comes with more transparent pricing.
- Direct routing. You don’t want to wait while your cargo stops at other ports before reaching yours.
- Online visibility to freight status. This avoids phone calls and emails and lets you plan better.
Dimerco’s Transpacific LCL Consolidation Service
For transpacific container freight, Dimerco Express Group’s network of 130+ forwarding offices across Mainland China, Hong Kong, Taiwan, and Southeast Asia drives significant demand for LCL consolidation services among U.S. and Canadian importers and their Asia suppliers. That translates into regular, scheduled shipping of consolidation boxes.
Dimerco offices in Asia collaborate closely with the company’s 20 offices across the U.S. and Canada, particularly our Los Angeles, San Francisco and Vancouver offices.
Some advantages of Dimerco’s LCL container consolidation program:
- Reduced shipping costs.
- Ability to offer a fixed, long-term rate agreement vs FCL or air, resulting in predictable costs and consistent transit times.
- Single-source solution, from pick-up to final delivery
- One point of contact for communication and status updates. Dimerco offices at origin and destination coordinate closely using a single global operating system.
- Dedicated service contracts with carriers, with pre-booked space.
- Direct service to the destination port.
- CFS services in all key U.S. and Canadian port cities to enable rapid container transloading.
- CFS costs can be as much as 32% lower at a Dimerco-operated location, such as the company’s San Franciso CFS/bonded warehouse, where they can better control costs for space, labor, equipment and chassis versus passing on the costs of a sub-contracted CFS.
- Regularly scheduled consolidations from Asia to North America. Check out the current schedule below (contact Dimerco for updates).
Dimerco LCL Consolidation Schedule from Mainland China and Taiwan to North America
Need LCL Container Shipping from Asia to U.S. and Canada?
For small and mid-sized shippers that don’t have the volume to fill a container, LCL container shipping can yield significant savings over the course of a year. Are you looking for LCL container consolidation services? Dimerco has several direct, Asia-to-North America routes that put you on the path to lowering your ocean freight costs. To learn how LCL container consolidation can benefit your business, contact Dimerco today.
