Pause-Café Logistique: Origin Consolidation
Our Pause-Café logistique are short capsules in which we explain a specific element of our complex, yet fascinating industry.
Here’s an overview of what Annie Dauphinais, vice-president of the OTR division, and Jessica McGillis, logistics coordinator of the Ocean division, discussed in our latest Pause-Café logistique capsule.
This week, our topic was Origin Consolidation and more specifically, the difference between an LCL and an FCL and their advantages and disadvantages.
First, What is an Origin Consolidation?
An origin consolidation is a grouping strategy beneficial for shippers when a few can come together to fill a container with their respective goods.
Two Types of Consolidation Exist: the LCL and the FCL.
LCL stands for Less than Container Load, which concretely means that one shipper isn’t able to fill an entire container with goods. When LCL occurs, price is established upon volume, meaning you only pay for the amount of space your goods occupy in the container. When you do not have a lot to ship, this option is usually the least expensive, since the extra space can be filled up by other shippers who then share the cost of the shipping.
On the other hand, FCL stands for Full Container Load, which means renting the entire space of a container. Usually, the container is filled at the shipper’s or the manufacturer’s plant, sealed and shipped to be delivered directly to the consignee’s door. Whenever you have enough goods to fill a container, this option is usually the best as pricing is fixed.
The Pros of an Origin Consolidation
1. Consolidation is a great hack when you don’t have a large amount of cargo to ship as you only want to pay to ship your goods, not air. Cost-wise, this is probably the best option.
2. Shipping your goods is made easy as you don’t have to bother with loading/unloading the container.
3. If you catch some space in a container right before departure, your goods could arrive at your destination a lot quicker than previously planned.
The Cons of an Origin Consolidation
1. Since consolidation requires a few extra steps, the shipping process can sometimes take a little longer.
2. You can’t always control the other goods that are shipped in the same container as yours.
3. Consolidation and deconsolidation mean more handling of your goods, so more risk of damage.
How to Manage Consolidation
Managing consolidation can be complex, and that’s where we come in. Our team of experts can efficiently take care of your shipping needs and provide you assistance with the consolidation process. By maintaining great partnerships with many different parties in the industry, we can influence which goods are shipped together and how the container is loaded to provide you with more options when the container arrives at destination.
Contact us today to discuss your shipping needs and we will help you find concrete and efficient solutions to better manage your shipments.
Watch our full Pause-Café logistique capsule on origin consolidation below.