LCL - 'Less than container Load' - An Explanation

LCL aka Less than container Load is a shipping term used to describe container loads which are filled by multiple orders or goods. When shipping a small volume of stock by container ship, it’s more economical to combine your delivery with other orders. This is termed as ‘Less than container Load’.

LCL is an  international ISO (International Organisation for Standardisation) term; the container load contains numerous consignees or importers.

What is a Less-than-container Load?

A group of items (form a single shipper or multiple shippers) to fill a container called LCL - Less than container load.

The four most common container sizes are:

8ft shipping container – 8ft (2.43m) length x 7ft (2.20m) width x 7ft 6in (2.27m) height
10ft shipping container – 9ft 10in (2.99 m) length x 8ft (2.44m) width x 8ft 6in (2.59m) height
20ft shipping container – 20ft (6.06m) length x 8ft (2.44m) width x 8ft 6in (2.6m) height
40ft shipping container – 40ft (12.2m) length x 8ft (2.44m) width x 8ft 6in (2.6m) height

But in general, we are using 20', 40' and 40' HC or HQ (High Cube - which is more height than the 40' container) containers only for the international trade.

Let's see benefits of an LCL 

• Good for shipping small loads – early on, a business might want to ship lower volumes of goods initially before ramping up volumes, LCL is a good option to start off when trading
• Lower sourcing risk – if you’re sourcing goods from numerous suppliers to test stock, using LCL can prevent ordering a bulk volume of goods as your first test run
• Shorter delivery time – because you won’t need to wait until you need sufficient volume to send a whole container of goods, the goods ordered would arrive to your destination faster
• Less inventory management – as the volume of goods are lower than that for a full container, inventory management in the warehouse will be minimal

Like the advantages in an LCL, some disadvantages also there. We need to understand the key risks for Less-than-container Load deliveries.

As a groupage combines freight from numerous suppliers, there is a higher risk of contamination, spillage, logistical issues (items getting sent to the wrong buyer) and damage of goods.

Per unit, the costs of LCL are normally at a premium due to the additional logistics and management involved with shipping multiple goods in one container.

Meraki Carriers is supporting all your LCL cargoes for both import and as well as export across the globe with their great network. With much competitive rates, we can offer the best services for your LCL requirements. Being one of the best freight forwarder in Chennai, we can able to provide you the complete solution of your both imports and exports in terms of LCL shipments.

 

 

What is a Letter of Credit (LC)?

 

A Letter of Credit is a contractual payment undertaking issued by a financial institution on behalf of a buyer of goods for the benefit of a seller, covering the amount specified in the credit, payment of which is conditional on the seller fulfilling the credit’s documentary requirements within a specific time frame.

The primary aim of this instrument is to provide increased assurance to both the buyer and seller of the fulfillment of each party’s obligations in a commercial trade – namely the seller’s obligation to deliver the goods as agreed with the buyer, and the buyer’s obligation to pay for those goods within the specified time-frame.

Some variations to the main Letter of Credit include revolving, escalating, de-escalating, transferable, back-to-back, as well as red and green clause letters of credit.

An issuer will use its customer’s funds to make the payment.

A Letter of Credit (or LC) is a commonly used trade finance instrument used to ensure that the payment of goods and services will be fulfilled between a buyer and a seller. The rules of a Letter of Credit are issued and defined by the International Chamber of Commerce through their Uniform Customs & Practice for Documentary Credits (UCP 600), used by producers and traders worldwide. Both parties use an intermediary, namely a bank or financier, to issue a Letter of Credit and legally guarantee that the goods or services received will be paid for.

We, Meraki Carriers documentation team help and guide you to fill the letter of credit, documentation arrangements to avoid any  discrepancies while submitting the documents to the bank. Our expert team simplify the process to prepare the Hundi / Bill of Exchange, Post shipment documents as per the LC requirments.