Analysis

Navigating The Challenges And Opportunities Of LCL Shipping

June 3, 2024
Ram Radhakrishnan
Founder & CEO

SUMMARY

LCL shipping is a great solution that comes with its fair share of challenges and opportunities. In this article, we take a deep dive into those.

Navigating The Challenges And Opportunities Of LCL Shipping

In a dynamic and competitive market, LCL shipping stands tall as the preferred mode, offering unparalleled flexibility and cost-effectiveness.

This mode of transportation empowers shippers and businesses to take advantage of a full container load without paying the optimal price, a significant advantage in today's business landscape. A staggering 75% of shippers who have embraced LCL shipping are committed to continuing to use the service, a testament to its impact on shippers.

LCL shipping comes with challenges, but it also comes with opportunities that favor businesses and supply chains looking for a streamlined approach to shipping. In this article, we will navigate the challenges and opportunities of the less-than-container load (LCL logistics) and the role of Silq.

Challenges of Implementing LCL Shipping

Although LCL shipping has been a game changer in the freight market and has leveled the playing field for many shippers, it is also inundated with challenges. Understanding these challenges will serve as a guide when choosing the right freight forwarder.

Complexity and Visibility

LCL shipping, by its nature, requires the consolidation of shipments from several shippers. This means involving multiple handling processes, unique cargo requirements, and stakeholders with varying destinations. These can complicate the LCL freight process, leading to poor tracking ability and more complex logistics operations compared to the streamlined nature of the FCL or full container load shipping.

Documentation

Unlike FCL shipment, which is freight from a single shipper with a single documentation process, multiple shippers coming together in LCL shipment means the documentation process will be far more complicated. Complications expose the LCL logistics operation to errors and more scrutiny from authorities.

Delays and Damages

Managing multiple shippers and shipments can lead to delays when managed by the wrong freight forwarder. Coordinating and consolidating multiple shipments to effectively fill an entire container space can cause all manner of delays, beginning with planning and arrangement. All of this can also increase the risk of damage to the shipment. For safety in the logistics operation, always depend on freight forwarders with ample technology solutions and boots on the ground that help simplify the coordination and consolidation process.

Limited Control

Once destined as LCL cargo, controlling the shipment move could be a challenge. This is because of the other LCL shipments traveling with it. Once the less-than-container load (LCL) leaves the container freight station, shippers cannot divert, stop, or recall the shipment until it gets to its final destination. This can be tiresome in cases where such actions are necessary and will impact the flexibility of the shipping and logistics operation.

Although there are challenges with LCL shipping, they can be navigated easily when partnering with the right freight forwarding platform. For instance, Silq leverages adequate technology solutions and expertise to ensure the LCL shipping is seamlessly coordinated, weeding out such challenges.

Advantages of Moving Freight via the LCL Shipping Solution

Navigating The Challenges And Opportunities Of LCL Shipping

There are significant benefits for supply chains and businesses looking to leverage LCL freight operations. Some of these benefits or opportunities include:

Reduced Cost of Operation

There is enough evidence of shipping operations being expensive if not planned properly, especially when it involves global cargo moves. By leveraging LCL transportation, businesses can opt to move away from FCL shipping services when their shipment sizes do not justify leasing an entire container. This will inevitably cut down the cost of logistics operations for these stakeholders.

Beyond logistics is the case of inventory and the cost of holding it. LCL freight allows these shippers, especially e-commerce platforms, to streamline their delivery process. This way, they do not have to hold much inventory, resulting in another cost savings opportunity.

Flexibility

E-commerce platforms and businesses with a lot of international customers can enjoy flexibility in their logistics process as LCL shipping allows them to serve multiple customers across multiple countries or continents. With the LCL freight operation, they can ship in small quantities continuously while keeping costs low and inventories less complicated.

Access to New Markets

The ability to transport shipments in small sizes allows businesses to test new markets without investing too much in them. These businesses can send samples and orders in small quantities to test the consumer's reception. If there is enough interest, businesses can ship more regularly or, depending on the level of reception, leverage the full container load logistics service. LCL freight provides a win-win situation where they can explore new markets without losing money.

Improved Sustainability

LCL logistics reduces the impact of the shipping operation on the environment. By consolidating multiple shippers into one shipping container, the freight forwarder can ensure container utilization is maximized. This reduces overall logistics carbon footprint, improves fuel efficiency, and helps all stakeholders achieve more with less. It can also serve as a sustainability selling point for many of these shippers, considering that costumers are increasingly curious about it.

How Silq Helped a Local Footwear Company Become a Global Brand

Pryme Footwears was a local champion. The shoes were great, and the locals raved about them, reflecting on their great sales numbers. However, the product was too good to remain local, and Hassan, the owner, realized this.

With the help of investors, the company gained national traction. Good product + local sourcing + local business was a great recipe for success, and Pryme Footwears never failed to mention that. However, that strategy was not going to work with the international market, but investors really wanted that push.

While it was relatively easy to scale nationally because of nearshoring advantages and strong local distribution networks, doing the same in a foreign market was risky. After much forethought and research, Pryme partnered with Silq, a freight forwarding platform leveraging expertise and state-of-the-art technology solutions to provide seamless shipping operations for small businesses.

With Silq’s LCL shipping service, Pryme Footwears pushed the product gradually into its new market in Germany by sending smaller shipments. While it was a challenge to gain traction initially, the company was able to hit its stride after a few months. Demands were not as high in the new markets, but low inventory holding costs and streamlined LCL logistics made it possible for Pryme Footwear to take its time to understand the market without the pressure of high operational costs.

With a reliable partner for its LCL shipment, the business was able to continue growing its influence by selling low lead times, high produce quality, and transparency across the entire logistics process. Customers loved it, and in no time, Pryme Footwear had captured a slice of a foreign market, thanks to Silq.

Silq is Your Reliable Partner For LCL Shipping and Cargo Service

LCL shipping is a great logistics solution, but it comes with many nuances that may be difficult for the average freight forwarder to manage. Not Silq, though.

The reason is because Silq is an all-rounder. Silq is a technology platform that streamlines freight forwarding with seamless planning, consolidation, documentation, and tracking that ensures complete control and transparency through the shipping process.

From the factory to the consumer's doorstep, Silq is with you in your air freight and ocean freight process. Get started now.

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