FCL (Full Container Load) refers to a shipping method where an entire container is used for a single shipment from one shipper to one consignee. LCL (Less than Container Load) involves consolidating multiple shipments from different shippers into one container, where each shipment does not fill the container entirely.
LCL, or Less than Container Load, is ideal for exporters who do not need to book an entire container due to the smaller size of their cargo. This method allows multiple shipments from different exporters to be consolidated into one container. LCL is particularly useful for smaller shipments that are more economical to send and are not urgently time-sensitive, making it a cost-effective solution for transporting goods without requiring a full container.
Freight forwarders frequently book cargo under the LCL category and create a ‘consolidation’ by combining several LCL shipments. They achieve this by booking an FCL container and filling it with cargo from different shippers. Once consolidated, the cargoes are sorted according to their destination ports or points of trans-shipment, ensuring efficient and cost-effective transportation.
How does FCL (Full Container Load) shipping work?
Step 1: Booking Shipment – Contact the logistics service provider to book the FCL shipment, providing all necessary shipment specifications. The provider then arranges transportation according to the specified requirements.
Step 2: Preparing the Consignment – The freight forwarder organizes the goods and initiates packaging to prepare for secure shipping.
Step 3: Drayage – Once packed into the container, the goods are transported to the port for export.
Step 4: Transit – At the port, the FCL shipment undergoes transit to its destination.
Step 5: Pickup/Delivery – Upon arrival at the destination port, the goods are offloaded and special transport arrangements are made to deliver them to the warehouse or final destination.
How is an FCL container load measured?
| Type | Length (m) | Width (m) | Height (m) | Capacity (CBM) |
|---|---|---|---|---|
| 20’ | 5.89 | 2.35 | 2.39 | 33.08 |
| 40’ | 12.03 | 2.35 | 2.39 | 67.56 |
| 40’ High Cube | 12.03 | 2.35 | 2.69 | 76.04 |
A 40-foot container is twice the length of a 20-foot container, while a high cube container is taller than the standard 40-foot container. Although 45-foot containers exist, conventional container sizes are commonly used for comparison. Less conventional containers are not as widely available.
Benefits of shipping using a full container load (FCL)
Speed: FCL shipments are faster because the entire container is dedicated to a single exporter. This means the goods are loaded once and unloaded once, reducing handling time and transit duration. FCL is the quickest shipping method after air freight.
Cost-Effectiveness: For large volumes, FCL is cheaper. A flat fee is paid for the entire container, making it cost-effective for shipments of 13 cubic meters or more, compared to LCL’s per-unit cost.
Safe Transportation: FCL ensures safer transportation as the container is sealed at the factory and remains unopened until it reaches the destination. This minimizes damage and contamination risks. FCL is ideal for fragile, expensive, or sensitive goods like ceramics, chemicals, and fresh produce. Reefers (refrigerated containers) in FCL can control humidity and temperature, a feature less common in other shipping methods.
Ideal for Large Shipments: FCL is perfect for large, heavy shipments, making better use of container space and reducing overall shipping costs.
Security: With minimal handling and no mixing with other cargo, FCL offers enhanced security for valuable goods. The sealed container reduces the risk of loss or theft.
Efficiency: FCL shipments generally have shorter transit times, making them suitable for consignments with tight delivery schedules. Most FCL shipments are delivered within three to six weeks.
Versatility: FCL can accommodate various types of cargo and provides flexibility in handling diverse shipping requirements. This makes it an excellent choice for businesses with specific transportation needs.
Understanding these benefits helps in selecting the most suitable shipping method based on the nature and volume of the goods, ensuring optimal transit conditions and cost efficiency.
How are FCL Shipments Charged?
FCL (Full Container Load) shipments are charged based on a flat rate for the entire container, regardless of whether the container is fully loaded or not. This pricing method contrasts with LCL (Less than Container Load) shipments, which are charged based on the volume or weight of the cargo.
Factors Influencing FCL Charges
- Container Size: The most common container sizes are 20-foot (TEU) and 40-foot (FEU) containers. Charges vary depending on the container size.
- Shipping Route: Rates vary significantly depending on the origin and destination ports. High-demand routes or those with geopolitical risks tend to have higher rates.
- Fuel Costs: Fluctuations in fuel prices can affect shipping costs. Carriers may impose fuel surcharges.
- Port Charges: Fees for loading and unloading at ports also contribute to the total cost.
- Additional Services: Costs for services such as insurance, customs clearance, and handling of special cargo (e.g., refrigerated containers) are added to the base rate.
Examples of FCL Charges
Example 1: Shipment from Nhava Sheva (India) to New York (USA)
- A 20-foot container may cost around $3,650, while a 40-foot container may cost $4,300.
- Source: India Shipping News
Example 2: Shipment from Nhava Sheva (India) to Rotterdam (Netherlands)
- Rates have been reported to be $600 per 20-foot container and $650 per 40-foot container.
- Source: India Shipping News
Major FCL Shipping Routes from India
India engages in significant FCL shipments to various international ports. Major routes include:
1. Nhava Sheva (Mumbai) to US Ports (New York, Los Angeles, Houston)
- Rates to New York: $3,650/TEU and $4,300/FEU.
- Rates to Los Angeles: $2,400/TEU and $2,500/FEU.
- Rates to Houston: $4,200/TEU and $4,500/FEU.
- Source: India Shipping News First & Second.
2. Nhava Sheva to European Ports (Rotterdam, Genoa)
- Rates to Rotterdam: $600/TEU and $650/FEU.
- Rates to Genoa: $750/TEU.
- Source: India Shipping News
3. Nhava Sheva to Asian Ports (Yantian, Tianjin, Shanghai)
- Rates to Yantian: $10/TEU and $20/FEU.
- Rates to Tianjin: $10/TEU and $20/FEU.
- Rates to Shanghai: $5/TEU and $10/FEU.
- Source: India Shipping News
FCL shipments are charged based on a flat fee for the entire container, influenced by factors such as container size, shipping route, fuel costs, port charges, and additional services. India’s major FCL routes include destinations in the China, US, Europe, and Asia, with varying rates depending on market conditions and geopolitical factors. These rates and trends highlight the importance of understanding the comprehensive costs associated with FCL shipments to make informed logistics decisions.
FCL VS LCL Container – Which is Better?
While FCL (Full Container Load) shipping offers many advantages, it also has some notable drawbacks:
1. Increased Inventory Costs: Shipping larger quantities means you’ll need to find and pay for additional inventory space. This can be a significant expense, especially for small businesses that may not have the storage capacity for large shipments.
2. Higher Costs for Small Loads: For shipments that are approximately 13 cubic meters or less, FCL can be more costly compared to LCL (Less than Container Load). This is because, in FCL, you’re paying for the entire container regardless of whether it’s fully utilized.
3. Need for Specialized Equipment and Personnel: Delivering a full container requires equipment and personnel capable of handling large loads. Not all factories or warehouses are equipped to handle this, which can complicate the logistics and increase costs.
4. Complicated Delivery Logistics: FCL shipments involve managing large quantities of goods within narrow time windows, which can complicate delivery logistics. Coordinating the unloading and handling of a full container requires careful planning and resources.
These demerits highlight some of the logistical and financial challenges associated with FCL shipping. It is essential for businesses to consider these factors when choosing the most suitable shipping method for their needs.
What are the documents required ?
When shipping Full Container Load (FCL) from India, several documents are required to comply with Indian regulations and ensure smooth processing of the shipment. Here is a comprehensive list of documents typically required:
1. Commercial Invoice: A detailed invoice provided by the exporter to the importer, specifying the goods, their value, and terms of sale.
2. Packing List: A document detailing the contents of each package, including dimensions, weight, and item descriptions.
3. Bill of Lading (B/L): Issued by the carrier, this document serves as a receipt for the cargo and a contract for its transportation. It also acts as a title of goods.
4. Certificate of Origin: A document certifying the country where the goods were manufactured, often required for customs clearance and trade agreements.
5. Shipping Instructions: Provided by the exporter, outlining specific requirements for handling and shipping the cargo.
6. Export License: Certain goods may require an export license from the Directorate General of Foreign Trade (DGFT).
7. Insurance Certificate: Proof of insurance coverage for the shipment, protecting against loss or damage during transit.
8. Proforma Invoice: An initial invoice sent to the buyer, stating the intent to ship the goods and the terms of sale.
9. Customs Declaration Form: A form submitted to Indian customs, detailing the nature, quantity, and value of the goods being exported.
10. Letter of Credit (L/C) or Bank Draft: Financial documents ensuring payment for the goods. An L/C is a guarantee from the buyer’s bank, while a bank draft is a direct payment.
11. Export Declaration: Required for statistical purposes and to declare that the goods comply with export control regulations.
12. Health and Safety Certificates: For goods subject to health and safety regulations, such as food products or chemicals, specific certificates may be required.
Additional Documentation (if applicable):
- Phytosanitary Certificate: For agricultural products, certifying they are free from pests and diseases.
- Hazardous Cargo Documentation: For dangerous goods, including Material Safety Data Sheets (MSDS).
- Inspection Certificates: For goods requiring pre-shipment inspection, such as machinery or electronics.
These documents ensure compliance with Indian export regulations and facilitate the smooth handling, transportation, and clearance of FCL shipments. It’s essential to check specific requirements for your cargo and destination country to ensure all necessary documentation is prepared.
Conclusion.
FCL and LCL each have their advantages and disadvantages. The need to transport smaller volumes of cargo by sea without paying for an entire container gave rise to the LCL industry. By understanding the distinctions between these two ocean freight options, buyers can make more informed decisions on the best method to use based on the shipment’s size and specific circumstances.