LCL Service Providers

LCL Service Providers

When it comes to ocean freight, many 3rd Party Logistics (3PL) providers strive for Full Container Loads (FCL) because historically it was their best option for moving goods across the ocean. In most cases they’re correct—Less-than-Container Load (LCL) shipments can cost significantly more. However, as some 3PLs such as GV USA Logistics began to take a more holistic view of their supply chains, they discovered that smaller shipments can be the most cost-effective choice for particular combinations of goods, order size, and market need.

That is probably why LCL service providers have grown so much over the past decade. Obtaining a precise read on the percentage of ocean cargo moving via LCL is challenging because most service providers often consolidate shipments, then present them to ocean freight carriers as full containers. However, an analysis of shipments presented directly to NVOCCs for consolidation into containers showed that a minority of the LCL market found that LCL shipments held steady from 2010 through 2011 at nearly 15 percent of containers. In 2011 through 2013 LCL service providers claim that number has increased to nearly 20%.

Several LCL service providers reported increases during the first half of 2014. The reality is that the proportion of FCL to LCL shipments shifts with the economy.

The skyrocketing cost of air cargo has been s a driving force behind the rise of LCL, which offers amazingly diverse options. Over the past few years a new service tier—Expedited LCL service—has emerged to meet demand for time-sensitive ocean transport, especially for goods that previously traveled by air. New shipping lanes are making Miami to Latin America LCL a more viable option.

GV USA LOGISTICS HAS BEEN ONE OF THE PIONEER LCL SERVICE PROVIDERS

Small and mid-size businesses use LCL frequently because they often don’t have the volume to completely fill a container, and waiting until they do is not an option because it would mean missing delivery deadlines for their customers. LCL shipments are also common for companies opening new markets or serving smaller ones particularly in Latin America. Additionally producing a product in smaller quantities because of its perishable ingredient for some food items — depends on a smaller yet regular supply. Often retailers, especially designer clothiers are frequent LCL users, as are the automotive, communications, and e-commerce industries.

LCL cargo shipments have also increased because businesses are skittish when it comes to buying volume, particularly throughout emerging markets across Latin America. Due to today’s sophisticated technology, LCL service providers can deliver imroved demand visibility and supply chain professionals can more accurately forecast their short-term needs and schedule smaller orders to arrive at designated intervals just in time.

Smart LCL service providers can manipulate the t otal landed cost by combining multiple client’s shipments to create a Full Container Load (FCL) thereby reducing shipping’s true price tag. Other factors to consider are what is the cost of a product’s obsolescence, and lost sales and profit if the goods are not available when they’re needed? How does this affect FCL’s savings? A number of GV USA’s clients prefer to buy in bulk and store their products in their warehouse and then direct GV USA to ship those products on demand as they are needed.

What to do next?  Learn more about our Transportation and Logistics in Central America