A differentiation between LCL and consolidation
LCL, or less-than-containerload, shipping is a method of transporting goods that don’t fill an entire container on their own. This type of shipping is often used for smaller shipments or shipments going to multiple destinations (since you can do consolidation at the port).
Consolidation, on the other hand, is the process of combining multiple small shipments into one larger shipment. It allows for economies of scale and often saves money on shipping costs. It also means that the goods will arrive at their destination simultaneously, which can be important for some businesses.
Size of shipments
LCL shipping is often used for smaller shipments or shipments going to multiple destinations (since you can do consolidation at the port).
Consolidation is the process of combining multiple small shipments into one larger shipment. It allows for economies of scale and often saves money on shipping costs.
LCL can be consolidated but doesn’t have to be
While LCL shipping is often used for smaller shipments, it’s possible to consolidate multiple shipments into one larger LCL shipment. It can be done at the port and often save money on shipping costs.
However, not all LCL shipments need to be consolidated. If a business only has one small shipment, there’s no need to consolidate.
Saving money on shipping costs
Because consolidation allows for economies of scale, it can often save money on shipping costs. It can be important for businesses that ship frequently or have tight budgets.
LCL shipping does not permanently save money on shipping costs. If a business has multiple small shipments going to different destinations, it may be cheaper to ship them separately.
How goods arrive at their destination
An advantage of consolidation is that it can mean goods arrive at their destination simultaneously. It is vital for some businesses, as it allows them to manage their inventory more effectively.
LCL shipping does not always mean goods will arrive at their destination together. If a business has multiple small shipments going to different destinations, they may not all arrive simultaneously.
Reliability
Since LCL shipments are not always consolidated, they’re often less reliable than consolidated shipments. There’s more chance of something going wrong during the shipping process if the goods are not grouped. Consolidated shipments are often more reliable since the goods are grouped, and there’s less chance for something to go wrong during shipping.
How long do the shipments take?
Since LCL shipments are not always consolidated, they often take longer than consolidated shipments. It can take time to consolidate the shipments at the port and then ship them out to their destination.
Consolidated shipments often take less time since the goods are already grouped and don’t need to be consolidated at the port.
Flexibility
LCL shipping is more flexible than consolidation because businesses can choose to ship their goods either way. If they have multiple small shipments going to different destinations, they can choose to ship them separately or consolidate them into one larger shipment.
Consolidation is less flexible because businesses can only consolidate if they have multiple small shipments going to the same destination.
Number of carriers used
LCL shipments can be shipped via multiple carriers, which gives businesses more flexibility in terms of cost and transit time. However, consolidated shipments must use one carrier since the goods are grouped. It can be a disadvantage if a business wants to use a particular carrier, but their rates are not competitive.
Paperwork involved
LCL shipments only require one Bill of Lading (BOL), while consolidated shipments require multiple BOLs, one for each consignee. It can be a disadvantage if a business is shipping to multiple destinations and needs to keep track of all the BOLs.
There are different types of consolidation
There are two types of consolidation: door-to-door and port-to-port. Door-to-door consolidation includes pick-up and delivery services, while port-to-port consolidation only includes pick-up or delivery to the port.
Door-to-door consolidation is more expensive than port-to-port consolidation, but it can be worth it for businesses needing extra services.
