Less-than-container (LCL) shipping has had consistent double-digit growth in recent years. Initially, demand for LCL shipping was attributed to the rapid growth of e-commerce as well as the never-ending chase to cut costs and free up working capital. In the COVID era, shippers and freight forwarders alike have used LCL shipping as a tactic to guarantee space for their cargo in an increasingly congested market. 

Regardless of why you’re considering it, it is important to understand the inherent benefits and challenges of LCL shipping—that is, using a single container to move cargo owned by multiple parties—and the physical warehouse operations needed to support this ocean freight process. In this article, we will explore everything you need to know about optimizing LCL operations, including how LCL warehouse operations typically work and how organizations can improve the collaboration and throughput of LCL warehouse operations.

How do LCL warehouse operations typically work?

The LCL shipping process starts by booking an LCL carrier. Next, shippers must package and ship their products to an LCL warehouse or container freight station (CFS). At this warehouse, products are containerized, with products from other shippers being used to fill the space that is left over in the container. Once the containers are full, they are then shipped via ocean freight to their port of destination, transferred to a destination CFS, and finally deconsolidated into individual shipments ready for pickup.

This process can prove highly beneficial for companies that need to ship products that do not require a full container's space. However, LCL shipping also entails several key challenges and complexities shippers must address before they can fully experience its benefits.

What are the challenges in LCL processes?

LCL shipping requires organizations to closely collaborate with other shippers, which can create several challenges. Some of the most pressing challenges in the LCL process are:

Reliance on other shippers

Sharing container space with other shippers means that you will be reliant on these shippers to ensure that no delays arise on their end. Incorrect documentation from a shipper that you are sharing container space with, for example, can delay the entire shipment—even if all of your products and documentation are in perfect order. If a shipper you are sharing space with is late getting their products to an LCL warehouse, this could also lead to delays in your LCL shipment. This reliance on other shippers to ensure that the LCL process goes smoothly makes effective collaboration one of the most vital elements of LCL shipping—a point covered in greater detail in the next section.

Additional documentation requirements

Depending on the product and where you are shipping it, LCL shipping may require more documents and certifications than shipping the same product FCL. This makes ensuring that both you and the shippers you are sharing container space with have all necessary documents in order more challenging.

Calculating LCL warehouse charges

The charges for shipping freight LCL are calculated based on the cargo's volume rather than its weight. This somewhat complicates calculating LCL warehouse charges, especially if you are shipping multiple products per container.

Damaged cargo

In addition to being reliant on other shippers to ensure that your products get delivered on time, shipping LCL also means that you will be reliant on other shippers to properly package and secure their products. Even if your own products are properly packaged, shipping them alongside products that are not can damage your products. LCL shipping also entails more handling of your products than FCL shipping, creating more opportunities for accidental damage. These factors make damaged cargo a more common problem in LCL shipping than FCL shipping.

"Collaborating with multiple shippers to form a mutually beneficial LCL shipping process requires organizations to utilize the right logistics technology."

Why is collaboration important?

Examining the challenges of LCL shipping, it is easy to see why collaboration between shippers that are sharing cargo space is so important. Shipping LCL further complicates the already complex logistics of international shipping, making it essential to develop a well-thought-out process that entails ongoing collaboration with other shippers. Being able to share data back and forth between partners efficiently means that you will be able to coordinate your LCL shipping processes to eliminate delays and optimize efficiency and throughput. However, collaborating with multiple shippers to form a mutually beneficial LCL shipping process requires organizations to utilize the right logistics technology.

How does Logistics Orchestration technology spur collaboration and improve throughput?

Logistics orchestration technology such as Slync.io automates the import and export of critical data between partners, making it much easier to collaborate with other shippers throughout the LCL shipping process. By enabling shippers to create a fully transparent supply chain where accurate, timely data is easily collected and shared between partners, logistics operation technology can go a long way toward eliminating the various obstacles associated with LCL shipping.

What are the benefits of more collaboration and throughput in LCL warehouse operations?

While the additional complexities that LCL shipping introduces may make it seem that LCL shipping isn't worth the hassle, the reality is that an optimized LCL shipping process can offer a lot of benefits. For one, LCL shipping is often faster than FCL shipping even though it is more prone to yield delays since LCL shipping can sometimes enable you to capitalize on space that is available at the last minute. Another key benefit of LCL shipping is that LCL warehouse charges are based on the cargo's volume rather than its weight. If you are shipping products that are heavy but don't take up a lot of space—such as products made primarily out of metal—LCL shipping may be able to save your organization a lot of money. The final benefit of LCL shipping is that shipping fewer products more frequently can allow you to reduce the expense of storing inventory.

To enjoy these benefits of LCL shipping, though, you must first overcome the challenges of LCL shipping. Thankfully, creating an LCL shipping process that optimizes collaboration between shippers and warehouse throughput via logistics orchestration technology is something that can make it much easier to overcome the various obstacles that LCL shipping presents, leaving free to enjoy its significant advantages.

Do you need to change your current process to enjoy these benefits?

If you have attempted to leverage LCL shipping in the past only to become bogged down in its complexities, a change in your shipping process may be the ideal solution. Relying on manual operations—particularly the manual collection, organizing, and sharing of critical data—can make collaborating with partners to form an effective LCL shipping process a real challenge. The good news is that automating these processes with a logistics orchestration solution such as Slync.io can enable your organization to enjoy the benefits of LCL shipping without needing to overhaul its current shipping process completely.

At Slync.io, we work to automate the import and export of critical data between partners, borders, and business units, enabling shippers to create a fully transparent supply chain that makes collaboration effortless. If you are looking for a simple way to optimize your LCL shipping process, leveraging Slync.io is an exceptional option to consider.

Partner with Slync.io and eliminate the chaos

Even if LCL shipping is the optimal choice for your business needs, capitalizing on the advantages that LCL shipping offers will still require you to develop a process that emphasizes collaboration and optimizes efficiency and warehouse throughput.

Recognizing the challenges that shippers face when it comes to creating an optimized LCL shipping process, we at Slync.io have developed a solution designed to automate and optimize the process of collaborating with third-party partners. To learn more about how Slync.io can improve the collaboration and throughput of your LCL warehouse operations, be sure to contact us today.

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