Can there be a difference in transit time between FCL and LCL cargo to the same destination..?? If so, why..??
A very valid question from Kehkashan Mashal Zaffar on the readers of this blog..
Before I answer the question, it is important to understand the difference between FCL and LCL, especially if you are new to the industry..
FCL : Full Container Load – this is when the full container is used by a single customer for his cargo..
FCL containers are usually packed and unpacked by the client at his premises at the origin and destination..
The client takes responsibility, liability for the packing and condition of the cargo packed in the FCL container..
LCL : Less than Container Load – this is when the same container is used for cargoes belonging to multiple shippers and consignees..
The clients deliver their cargo to the lines packing station (CFS – Container Freight Station) and the line then packs the delivered cargo on behalf of the client..
In the case of LCL containers, the shipping line takes responsibility and liability for the packing, condition and delivering of the cargo..
But not all shipping lines offer LCL services in all countries..
For example in South Africa – lines do not offer LCL services and such LCL shipments are handled by Groupage operators..
GROUPAGE : Similar to LCL with the only difference that these containers, cargo packing etc are controlled by a Groupage operator instead of the shipping lines in the case of LCL containers..
The Groupage operator books the container with the shipping line as their cargo depending on how much cargo they have (20′ or 40′).. Also known as a Consol Box..
Once the cargo is packed, they issue their own House Bills to their clients and collect the Master Bill of lading from the shipping line..
Now to the question of the reason for difference in transit time between FCL and LCL..
In the case of FCL – the container is carrying cargo for one shipper and one consignee and once it is packed at the Port of Load, it is not reworked anywhere and delivered as is to the Port of Discharge.. It may however, be re-handled at a Transhipment port in case there is no direct service from point to point..
For example, let’s take an FCL container from Durban, South Africa to Sydney, Australia.. The container is not opened or cargo re-worked along the way, but the full container may be transhipped at some hub port like Singapore or Port Kelang..
So the transit for an FCL container could be 31 days from Durban to Sydney..
In the case of LCL (or Groupage) cargo – the shipping line or groupage operator will load cargoes belonging to many shippers and many consignees in the same container going to various destinations like Keelung, Penang, Sydney, Adelaide, Honiara in Solomon Islands..
The container may be discharged at Singapore which could be the hub port of the shipping line or groupage operator where this container will be reworked and cargoes distributed to the various ports by consolidating a container containing all cargoes to Keelung, all cargoes to Penang, all cargoes to Sydney etc..
So the groupage operator or consolidator consolidates all LCL cargoes to a specific destination and converts it to an FCL container for them..
If there is not enough cargo for Sydney, from this LCL container and other LCL containers coming from around the world, the Sydney cargo may wait in Singapore till there is enough cargo to Sydney to fill a container..
So an LCL cargo bound from Durban to Sydney might take 43 days by the time it reaches Sydney after the reworking etc whereas an FCL cargo will take lesser than that..
Sydney is a common port, so the delay (if any) might be very minimal, but if you take for example an exotic port like Honiara, which is not as popular as Sydney, the cargo could wait longer in Singapore..
And if there is no direct connection from Singapore to Honiara for the LCL cargo, this might have to be further reworked at another hub port..
Below diagram should help clarify (click on the image if you can’t read it clearly)
Trust this explains the difference in the transit time of an LCL cargo as compared to an FCL container..
Has your business been affected positively or negatively due to this difference in transit time between FCL and LCL Cargo..??
Lovely article. I wonder if you wouldn’t mind commenting on the difference between a direct service for Groupage Shipment vs direct service for an FCL shipment. It is a difference of perspective that is not much considered yet very significant to decision making, and has resulted in some arguments because of differences of understanding particularly between groupage operators and freight forwarders.
From an FCL perspective, I understand a direct shipment is when the same vessel calling the origin port of load is the same vessel that will call the destination port of discharge. The container therefore leaves POL and arrives at POD on the same vessel.
However, from a groupage perspective, I understand that a direct service is when the same container packed at the origin CFS is the same container unpacked at the destination CFS. Unfortunately once the container is packed at origin, it may be placed on a vessel which is not on a direct service to the final destination. The container may therefore be off-loaded at a transhipment port for the shipping line being used, and re-loaded onto another vessel calling the final destination. However, the container is not sent to a transhipment CFS for the groupage operator, and is therefore not reworked. So from a groupage perspective, this would still be considered a direct service.
This may not sit well with freight forwarders who see a groupage operator publish a direct service, and become upset when they find out that there is in fact a transhipment, but it is not a groupage transhipment but an FCL transhipment impacting a direct groupage service. The fact of the matter is that the groupage operator had enough cargo to final destination to pack a full box, and so it is direct. The only reason for them to send cargo to a transhipment hub, would be if they didn’t have sufficient cargo and need to consolidate at a hub, which isn’t the case in the above scenario.
I was assuming a lot but this explanation has ironed out all my doubts in a clear concise manner. Wonderful article.
Glad you found it useful Arvind..
Thanks a lot, sir!
Am I glad I stumbled upon your blog today or what! All the difficult terms and concepts I used to encounter on BLs are vanishing.
Thank you, my good sir.
Hello Semon, welcome to the blog and glad to be of assistance.. Keep reading more, participate in the discussions, share your views and also subscribe to the blog so that you can receive all the future updates to your mailbox.. Pls also pass on the details of this blog to all like minded people.. 🙂
I am aware what FCL and LCL stands for but Why do Liner mention FCL/FCL
or LCL/FCL on Bill of Lading ?
Hi Shetty, pls read https://www.shippingandfreightresource.com/container-service-types/ for more info on this..
Thanks really a good and very descriptive article.
Hi Hariesh Manaadiar, thanks for the explanation .. its very helpful 🙂
Spot on Harriesh! . . . thank you for this clear description.