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Freight companies operate by shipping cargo either in individual packages or fully stocked metal containers. The back part of 18 wheelers or semis is a metal box called a container. The container can be shipped via truck, rail, or sea. A less than container load, or LCL, shipment occurs when a specific shipper consigns a truck or other cargo vessel to ship product by itself in a container that is not completely full.
Since a standard shipping container can hold dozens of pallets of cargo, the freight company typically combines the cargo from multiple requesters to fill the vessel. This helps control the cost of shipping each piece of freight. The total landed cost, or cost to move a piece of freight from one destination to the other, is directly affected by fuel costs.
The more densely packed the container, the lower the cost to move one individual piece of freight. This is affected by the cost of fuel to transport the cargo, the cost of labor to drive or transport, and the wear and tear on the vehicle. When a company chooses to ship less than container load freight, the total cost is divided by only the number of pieces shipped which, in turn, makes the cost per piece more.
Though more expensive to ship using the less than container load process, there are times when it is required. If, for example, the material is sensitive to changes in weather such as electronic devices or are perishable in the case of food items, it may be necessary to ship immediately regardless of whether the container is full. Critical customer requirements may also require a less than container load shipment.
Often super critical shipments will ship via air transportation, which is even more expensive than ground. If the product is physically large or heavy, a less than container load shipment may be a less expensive option while still getting the product to the destination on time. Ultimately, the costs for shipping a smaller container is weighed against how soon the product needs to arrive to determine what to do.
Less than carload shipments are also sometimes used. Similar to less than container load shipments, a less than carload shipment occurs when rail cars are shipped without being completely full. This most often occurs when there is livestock, such as cattle, that needs to be transported immediately but may not completely fill a rail car. In this situation, the cargo must arrive at its destination within a specified time line without regard to how full the cars are.