Get to know the vital terms of Logistics and Supply Chain Management.
In logistics, LCL stands for Less-Than-Carload, which is shipping. Here, smaller shipments from various customers are combined into one single railcar, truck, or container. LCL maximizes space and cost savings by grouping multiple shippers; because cargo volume is relatively low, they divide the cost of transportation. It is a concept analogous to “carpooling” in logistics: it’s an economical alternative for businesses, which do not require using the full capacity of a railcar or container for their goods.
Consolidation: There are several smaller shipments coming from different customers that are consolidated in one container or railcar.
Shipping and Delivery: The consolidated shipments are shipped out of the consolidation area to a hub or terminal. There, at the terminal, the various shipments are sorted and delivered to the final destinations.
Cost Effectiveness: Because the charge for transportation is split among many shippers, LCL has a lower cost than the other modes. In businesses where there are smaller, less frequent shipments, LCL will prove to be very economical.
Flexibility: LCL is shipped with flexible scheduling. This means that businesses can send their shipments without necessarily waiting for the fill-up of an entire container or rail car.
Low Cost: LCL shipments share container space and costs of transport with other shippers. For this reason, the associated costs of booking the whole container become reduced, making it suitable for small shipments.
Sustainability: LCL reduces the number of trips necessary to be undertaken, thus lowering the use of fuel and emissions, thereby becoming an environment-friendly option.
Smaller businesses have access to rail or sea shipping. LCL affords entry to international markets without having to carry full-container quantities for smaller businesses.
Small and Medium-Sized Enterprises: SMEs would most likely use LCL for importing and exporting as it provides them flexibility and lower costs in terms of global market access.
E-commerce: LCL is primarily used in e-commerce logistics because the shipments usually consist of a number of different products with not enough to fill a single container.
LCL offers shippers with smaller volumes which is a viable option that can be efficiently scheduled and cost-effective. Between small business concerns and larger firms moving less than a full load, LCL is accommodating of efficient and economical shipments across regions or internationally.