FCL and LCL
In the container transportation business, we call a container, an exporter, a consignee, and a destination port, and the goods that meet these "four ones" conditions are called FCL, and we call a container, exporter, and consignee. As long as one of the three items in the port of destination is two or more export goods, it is defined as LCL cargo.
The transportation cost of LCL and FCL is very different in terms of procedures, time and cost. The two are by no means "1+1=2, 1+2=3". Similar to the simple relationship between addend and sum, it is a series of strange "inequalities" such as "1+1>2, 1+2>3".
The customs clearance procedures for LCL cargo are more complicated than FCL cargo, and it takes longer
First, the whole container of goods exactly meets the minimum unit of customs inspection, sealing, and release of the exporting and importing countries. For a batch of goods, as long as the documents submitted by the exporter and importer are reasonable, legal and intact, the export customs and import customs will handle it. After the relevant procedures and relevant taxes and fees are collected, customs clearance will be released soon. The LCL cargo will not be so simple and fast. As long as the goods in the container have a single shipment document that is faulty, the export customs will not release the goods. This is because the export customs must seal the exported containers before allowing the loaded containers to leave the country. Therefore, in the same container, the failure of any one of the goods to clear customs will inevitably affect the timely export and transportation of other goods.
Second, LCL cargo is far less extensive and flexible than FCL cargo. It requires additional solicitation by the transportation company and a reasonable combination of some conditions such as the port of shipment, port of destination, delivery date, variety, volume, and weight of the cargo. They are all suitable for exporting goods in the same container. These requirements are very difficult to implement and require a long time. If the transport company consigned by the cargo owner is not strong enough, then the time for cargo transportation will be delayed even longer.
Third, under normal circumstances, FCL cargo can be shipped directly at inland ports, while LCL cargo is only suitable for delivery at developed coastal ports due to relatively few inland sources and relatively more coastal sources. This will undoubtedly add a lot of extra trouble to the exporter. According to the relevant regulations of the Chinese government, exported goods must pass the inspection of the Commodity Inspection Bureau in the place of production and the place of export declaration. If the goods are declared for export within the scope of the province (autonomous region, municipality directly under the Central Government) where the goods are produced, only one commodity inspection is required for a batch of goods. Otherwise, if it is a customs declaration in another place, a batch of legally inspected export commodities must pass two inspections before the customs will release it.
LCL cargo is more expensive than FCL
Under normal circumstances, the freight and miscellaneous costs of FCL transportation in sea freight generally include three items: freight, transportation surcharges and port miscellaneous charges. The freight and transportation surcharges for LCL and FCL should be the same. The difference in cost is only in the assembling of the transported goods at the port of shipment and the unpacking at the port of destination.
It stands to reason that these two costs should not be very high. However, due to the huge differences in the level of labor costs between countries and regions in the world, exporters have little or no knowledge of the specific differences. The original LCL cargo ratio The freight cost of the whole container is very reasonable by adding a certain percentage of LCL, unpacking and storage fees on the basis of the overall consistency. However, in order to earn higher profits, carriers often use "fuzzy The method of "learning" does not specify what items will be charged in the quotation, but only generally according to the destination port to which the type of goods are shipped, and the amount of each freight ton is charged, and the port miscellaneous charges are reported temporarily. What's more, the carrier has no obligation to explain, and the shipper has no room for bargaining. The amount of charge depends on the specific circumstances.
In addition, it should be noted that in import and export commodity trade, the larger the quantity and total value of each transaction, the lower the transaction cost. Conversely, the smaller the quantity and total value, the higher the transaction cost.
Compared with FCL cargo, the quantity and total value of LCL cargo are generally smaller. Therefore, from this perspective, the transaction cost of LCL cargo must be higher than FCL cargo. This is because the cost and mailing fee of the finished sample, the communication fee such as fax and telephone, the notification fee of the letter of credit, the customs declaration fee of the import and export goods, the certificate of origin, etc. are all based on the number of copies rather than the business. The size of the amount to be charged. When these business expenses are finally allocated to transaction costs, the unit costs with a large transaction volume will have a small share, and the unit costs with a small transaction volume will have a large share. We should be aware of this.
