Market analysts expect considerable growth in global Less than Container Load (LCL) shipments, driven by the need for faster deliveries and supply chain resilience. According to a market report, the compounded annual growth rate (CAGR) is expected to be around 5% from 2021-2027.
During the pandemic, LCL was an attractive option for businesses due to a shortage of equipment and vessel space. Businesses looked to LCL to get goods to market quickly to meet the then-growing consumer demand.
Post-pandemic, LCL offered a cost-effective way to manage full warehouses by allowing only the required goods to be shipped.
During these times, it became evident that supply chain disruptions are unpredictable, and not every eventuality can be planned for. This has prompted more shippers to consider diversifying their transport options, including adding LCL to keep goods flowing.
Besides supply-chain disruptions, consumers demand faster delivery and more cost-effective solutions thanks to the growing e-commerce market. Compared to shipping a full container load or using air freight, LCL makes it possible to ship non-urgent goods faster and cheaper.
What is LCL
Less than container load refers to smaller shipments that don't fully utilise the capacity of a sea freight container. LCL allows shippers to share container space, reducing costs and providing flexibility regardless of cargo volume.
It can also be an advantageous shipping solution during equipment shortages and challenging market situations such as the Red Sea, where geopolitical factors may disrupt regular shipping routes. LCL's adaptability becomes crucial, enabling businesses to navigate uncertainties, maintain supply chain resilience and get goods to market quickly.
Advantages of LCL
Transit Time
In contrast to the FCL, LCL shipments are routed on the fastest available route, i.e. direct services with the shortest transit times are chosen where available. When no direct routing exists, routes with a maximum of one transhipment are used.
Cost Saving
Compared to FCL, LCL offers a cost advantage for shipments which would not fill an entire container. Consignments from various shippers are consolidated at a container freight station (CFS) and packed to fill a container. The shippers then share the costs according to the volume shipped, making LCL a more affordable option.
Reliability
In addition to being shipped on the fastest route available, LCL shipments are prioritised by carriers and usually unaffected by rollovers, cuts, or delays.
Order sizes and cash flow
As product life cycles shorten, it is increasingly vital to ship goods to market as soon as possible without accumulating stock to fill a container. Suppliers can fulfil individual orders quickly, thereby improving their cash flow.
Sustainability
Since 2020, Kuehne+Nagel part load shipments are transported CO2 neutral - at no extra cost to customers.
This week, Kuehne+Nagel has integrated LCL sailing schedules within its seaexplorer platform, allowing customers to plan both shipment types in one tool.
Like FCL customers, LCL shippers will have transparency on supply chain disruptions, services offered by various carriers and detailed port and vessel information through the platform. Seaexplorer allows users to subscribe to specific schedules and receive email notifications of schedule changes.
In addition to alerts and sailing schedule changes, customers can stay informed of sea logistics news, including Kuehne+Nagel assessments on hot topics and schedule reliability reports via Seafreight News.
