- 1 Pros and Cons of FCL Container Shipping
- 2 FCL Cost Breakdown
- 3 Do Shipping Prices and Costs Change Over the Year?
- 4 How Much Does It Cost to Ship a Shipping Container?
- 5 FCL Shipment Procedure
- 6 How do I know if FCL is the right choice?
- 7 FAQs
- 7.1 What is the difference between FCL and LCL container shipping?
- 7.2 How long will it take for an FCL shipment to arrive at its destination?
- 7.3 Do FCL container shipping offer tracking and visibility throughout the shipment process?
- 7.4 What does 40 FCL mean in shipping?
- 7.5 What does 20 FCL mean in shipping?
Full Container Load (FCL) describes the shipping method used to transport goods and cargo in one dedicated container. In international shipping, FCL implies that the whole container load is sent by one shipper and to a single receiver.
FCL shipping is typically used when the cargo volume is large enough to occupy at least half of the container capacity. If the cargo does not occupy more than half the container, most businesses will opt for Less than Container Load (LCL) shipping. FCL is also the preferred method for shipments that need the security of an exclusive container.
In this article, we explore everything you need to know about FCL shipping, including the advantages and disadvantages, costs, shipment procedure, container sizes, and much more.
If you need help with FCL container shipping, it’s best to get in touch with a professional. EES Shipping in Perth, Western Australia, offers total logistics solutions, including sea freight, air freight, warehousing, customs brokerage, and import and export services.
Pros and Cons of FCL Container Shipping
The price per unit for FCL container shipping is often lower than LCL shipping, due to flat fees and the absence of additional surcharges based on the specific cargo type and handling requirements. This makes FCL shipping more cost-effective for large and heavy consignments.
Shorter transit times
FCL shipments avoid consolidation and deconsolidation processes that LCL shipments go through at the freight forwarder’s warehouse, reducing transit times and ensuring faster delivery. Additionally, having a dedicated container for your shipment minimises potential delays caused by issues related to multiple consignments sharing a container.
Increased cargo security
FCL shipments provide an exclusive container for your goods, reducing the chance of damage or loss due to consolidation with other LCL shipments. This is particularly important for valuable, fragile, or dangerous goods that require special handling.
Higher initial cost
While FCL shipping may present a lower cost per unit, the overall cost of shipping a full container load is typically higher than LCL shipping, particularly for smaller shipments. This can be a significant obstacle for small businesses or individuals shipping personal effects.
If the cargo volume is not sufficient to fill an entire container, the space within the container will be underutilised, leading to excess shipping costs that could be avoided. This is especially important if your cargo volume frequently changes, as it may be more cost-effective to opt for LCL shipping in these cases.
Potential for peak season surcharges
During peak shipping seasons, ocean freight carriers may impose additional surcharges on FCL shipments to accommodate increased demand. These charges may impact the overall cost savings provided by FCL shipping.
FCL Cost Breakdown
One of the primary factors in determining the cost of an FCL shipment is the size of the shipping container. Standard shipping containers come in two sizes: 20ft and 40ft. The exterior dimensions of these containers dictate the maximum payload they can carry, and consequently, the cost of transporting those goods. Additionally, there may be surcharges for larger or heavier containers.
Freight forwarders play a key role in the container shipping process. They help coordinate the supply chain, customs clearance, and logistics on behalf of shippers and consignees. As a result, their fees contribute to the overall cost of FCL shipping. Costs can include a flat fee for their services, as well as any additional charges for customs operations, documentation, or storage at destination ports.
Another aspect to consider in the FCL cost breakdown is the shipping route. Rates can vary significantly depending on the origin and destination ports. Major ports generally have more competitive rates due to higher cargo volumes and more frequent sailings. Transit times, too, can impact costs, with shorter transit times commanding higher FCL prices.
Port charges are a further cost component of FCL shipping. These charges can include terminal handling charges (THC), import/export fees, and demurrage or detention charges for containers held at the port for longer than the allowed time.
Furthermore, the nature of the goods being shipped can influence the cost of an FCL sea freight service. Dangerous goods, such as lithium batteries, chemicals, or flammable materials, often require additional surcharges due to the increased risk, handling, and regulatory requirements associated with their transport. This can lead to a higher overall FCL price for these types of shipments.
Insurance premiums and various taxes may also be incurred when shipping goods through an FCL shipment. Shippers need to account for these costs when calculating the overall expense of their shipment.
Do Shipping Prices and Costs Change Over the Year?
Peak season plays a major role in shaping container shipping costs. During periods of high demand, such as the months leading up to major holidays like Christmas, businesses may experience a surge in required shipping capacity. As a result, carriers frequently increase their rates to capitalise on the heightened demand. Shipping during peak season can therefore lead to a substantial increase in FCL and LCL freight charges.
Fluctuations in the price of fuel can also have a significant impact on shipping costs. The cost of bunker fuel, which is used by ocean freight carriers to power their vessels, can greatly affect the overall cost of transportation. As these fuel prices change, carriers often apply a Bunker Adjustment Factor (BAF) to their rates to offset any changes in fuel costs.
Political and economic factors can heavily influence shipping prices and costs throughout the year. An example we can all relate to in 2023 is the impact of the COVID-19 pandemic; per The Economist, the “cost of shipping a 40-foot container from China to America’s west coast is now $1,400, down 93% from its peak of $20,600 in September 2021”. Other examples include fluctuations in exchange rates, import/export restrictions, and changes in government regulations, which can all contribute to the variable nature of shipping costs.
How Much Does It Cost to Ship a Shipping Container?
The cost of shipping a container is influenced by various factors such as the type of container, the shipping mode (sea, air or land), the weight and dimensions of the container, the destination, the time of the year (peak season), and additional services such as customs clearance, freight forwarding, and handling fees.
FCL container sizes
FCL shipments can be performed using various types of shipping containers, which provide different exterior dimensions and maximum payload capacities. The most commonly used containers are the 20ft and 40ft shipping containers. Deciding on the most suitable container size depends on the volume and weight of the cargo, as well as the specific requirements of the shipper.
A 20ft shipping container has a maximum payload of 28,200 kg (62,000 lbs) and a 40ft shipping container has a maximum payload of 28,800 kg (63,600 lbs). FCL shipments often offer a flat fee per container, making it a more cost-effective option for those with a significant amount of goods to transport.
Sea freight vs. air freight
Sea freight is generally the most economical option for container shipping, as it offers the lowest prices out of all transport modes. Sea freight archives as a basis for pricing can help businesses and individuals estimate the cost of FCL sea freight or LCL shipping.
Air freight is another option to consider for shipping containers, though it is often more expensive than sea freight due to its higher operational costs. Air freight charges apply based on the weight and volume of the shipment, making it a less cost-effective choice for FCL shipments. However, air freight can be advantageous for businesses that require faster transit times and minimal handling of their cargo.
To further illustrate the cost of shipping a container, let’s consider an example: A business is looking to ship an FCL of grain from Australia to Europe. The cost of FCL sea freight for a 20ft container may range between $3,000 to $7,000 during peak season. Additionally, the business may incur charges for customs clearance, port charges, and freight forwarding fees. These charges will vary depending on the nature and complexity of the shipment, and the respective service providers.
FCL Shipment Procedure
1. Freight forwarding service
First, businesses or individuals must identify a suitable freight forwarding service for their FCL shipments. Freight forwarders act as intermediaries between shipping carriers and cargo owners, managing the transportation, logistics, and documentation required to ensure a smooth shipping experience.
You will need to provide the freight forwarder with details regarding the shipper, consignee, cargo type, shipping and cargo preparation dates, and notify parties. These details will need to be included on the bill of lading – a legally binding contract that every shipment needs. You can read more about bills of lading in this post.
2. Prepare the cargo
Once a suitable freight forwarding service is chosen, the next stage involves preparing the cargo for shipping. Businesses must ensure their goods are properly packed and secured within the shipping container to minimise the risk of damage during transportation. This may involve using pallets, dunnage, or other types of cargo-securing ties. For FCL shipments, it is crucial to adhere to the shipping carrier’s weight and exterior dimensions guidelines to avoid overloading or oversized cargo.
3. Dangerous goods
If an FCL shipment contains dangerous goods, such as lithium batteries or chemicals, the shipper must ensure that all necessary paperwork and documentation, such as a dangerous goods declaration or Material Safety Data Sheet (MSDS), aka Safety Data Sheet (SDS), are in place. Regulations for shipping dangerous goods vary depending on the carrier, destination, and local authorities, so proper research and consultation with a freight forwarder should be done before the shipping process begins.
4. Customs clearance
As the cargo is prepared for shipping, the business or individual must also engage in the customs clearance process. This involves submitting the necessary documentation and declarations to ensure that the goods conform with local import and export regulations. Customs clearance can be a complex process fraught with potential delays; thus, working closely with a knowledgeable customs broker or freight forwarder can streamline customs operations.
5. Shipment sent
Next, the shipping container is transported to the port of origin. The container load will then be loaded onto a vessel by the shipping carrier, with operations staff ensuring that the container will be properly secured and stowed onboard the ship. During transport, the FCL container will be tracked, allowing for visibility throughout the international freight journey.
6. Shipment arrival
Once the FCL shipment arrives at its destination port, local shipping agents will handle the unloading and transportation to the final delivery point. Depending on the agreed-upon shipping terms (Incoterms), the recipient (consignee) may be responsible for the charges and logistics related to delivery to the final destination. Delivery may involve further customs clearance procedures, warehousing, or last-mile transportation involving either ground or air modes of transportation.
How do I know if FCL is the right choice?
When considering FCL container shipping, it’s essential to weigh the advantages and disadvantages in order to make the most informed decision. Factors such as cost, transit times, and cargo security should be taken into account:
- Evaluate the volume and nature of your cargo. FCL works best for shipments that take up a large portion of a container.
- Consider the time sensitivity of your cargo. Transit times are often more predictable with FCL shipments, as there are fewer stops and handling during sea freight. This reduced handling also lowers the risk of damage to your goods.
- Take any considerations regarding personal effects or dangerous goods into account. Shipping personal effects or dangerous goods, such as lithium batteries, may require additional surcharges or special handling for LCL shipments. This could make FCL shipments more attractive from a financial standpoint, as these additional fees may increase the overall cost of LCL shipping significantly in some cases.
At EES Shipping in Perth, WA, we are dedicated to providing our clients with the best possible solutions to all of their logistics needs. We understand that every shipment is different, which is why we offer tailor-made solutions catered to each individual client. Contact us today for more information.
What is the difference between FCL and LCL container shipping?
FCL container shipping is a method of internationally transporting goods; it involves shipping an entire container filled with cargo. On the other hand, LCL container shipping allows multiple shippers and consignees’ goods to be consolidated into one container, meaning each consignee/shipper only pays for the space they use. Read more about the differences between FCL and LCL container shipping.
How long will it take for an FCL shipment to arrive at its destination?
Transit times for FCL shipments vary based on several factors, including the origin and destination ports, shipping routes, ocean freight carriers, and customs operations. Other factors, such as weather conditions, vessel availability, and peak season surcharges, can also impact transit times. To get an accurate estimation of transit times for a specific FCL shipment, consult with your freight forwarder or shipping company.
Do FCL container shipping offer tracking and visibility throughout the shipment process?
Yes, most FCL container shipping providers offer tracking and visibility throughout the shipment process. This enables customers to monitor their cargo from the point of origin to the destination, facilitating better supply chain planning and ensuring accountability. FCL shipping providers usually leverage advanced technological solutions to offer real-time tracking and communication, enhancing the overall customer experience and promoting efficient logistics management.
What does 40 FCL mean in shipping?
40 FCL refers to the size of the container, in this case, a 40ft shipping container, which has a maximum payload of 28,800 kg (63,600 lbs). In this instance, FCL also refers to the type of shipping being used, which is full container load. As discussed in this article, FCL means that one shipper is using the entire space of the container.
What does 20 FCL mean in shipping?
As with 40 FCL, 20 FCL refers to the size of the container, and that the entire container is being used by one shipper. A 20ft shipping container has a maximum payload of 28,200 kg (62,000 lbs). 20ft and 40ft containers are the most commonly used container sizes.