• Home
• Blog
• The Hidden Costs of LCL Shipping: What to Look Out For

When shipping goods internationally, many businesses opt for less-than-container load (LCL) shipping. LCL shipping involves sharing a container with goods from other shippers, allowing businesses to ship smaller quantities without the higher costs of renting an entire container. While this seems like a cost-effective solution, it’s important to be aware of the hidden costs that can quickly add up. In this blog, we’ll explore the key hidden costs of LCL shipping and what you need to look out for to avoid surprises in your logistics budget.

1. Volumetric Weight Charges

One of the first hidden costs that many importers and exporters overlook is the way shipping charges are calculated based on volume and weight. Shipping companies typically calculate freight charges based on either the actual weight or the volumetric weight of a shipment—whichever is greater.

Volumetric weight is calculated by multiplying the length, width, and height of the shipment (in centimetres or inches) and dividing that by a standard divisor. This divisor is usually 6000 for air freight and 1000 for ocean freight (although this can vary by carrier).

If your cargo is lightweight but bulky, you could be charged based on its volumetric weight, which may be significantly higher than the actual weight of the goods. This is especially common in LCL shipments, where the chargeable weight can be skewed due to the nature of cargo consolidation.

What to Watch Out For :

• Dimensional weight considerations: When booking an LCL shipment, always calculate your shipment's volumetric weight and check whether the actual weight or volumetric weight will be applied.
• Dimensional Restrictions: Some carriers impose dimensional restrictions on LCL shipments. If your cargo exceeds a certain size, it may be subject to additional surcharges.

2. Consolidation Fees

Since LCL shipments involve the consolidation of goods from multiple shippers into a single container, there is often an additional fee for this service. The cost of consolidation varies depending on the carrier, port of departure, and port of arrival, but it’s an important factor to consider when budgeting for an LCL shipment.

While consolidation helps reduce overall costs by sharing container space, the logistics of managing multiple shipments and ensuring everything is safely packed and documented often incur additional charges.

What to Watch Out For:

• Consolidation and deconsolidation fees: These fees are generally charged for the time and labour required to load and unload goods at the consolidation and deconsolidation points.
• Handling costs: Since LCL shipments often involve more handling than full container load (FCL) shipments, there may be additional charges for this extra work.

3. Port and Terminal Charges

Every international shipment incurs certain port and terminal fees, but these can be especially high for LCL shipments due to the added handling involved in consolidating and deconsolidating goods. These fees can include:

• Terminal Handling Charges (THC): These charges are for the services required to move goods in and out of the port or terminal.
• Port Security Fees: These are security charges that are applicable to all containers entering or leaving a port.
• Documentation Fees: This covers the cost of the paperwork and administrative work involved in processing the goods at the port.

In LCL shipments, the shared nature of the container means there is more handling of cargo in and out of the terminal, which increases the likelihood of additional port fees.

What to Watch Out For :

• Breakbulk charges: If your goods are particularly bulky or awkwardly shaped, you might incur additional breakbulk fees for specialized handling.
• Port congestion: Delays at congested ports can add extra costs for storage and demurrage fees if your goods are not picked up on time.

4. Additional Documentation Fees

International shipping often requires various documents, including bill of lading, certificates of origin, and customs declarations. While these may seem like standard paperwork, there are often hidden costs related to these documents that can add up.

For example, when shipping via LCL, the shipping company may charge for preparing and submitting the necessary documentation, especially if additional paperwork is required for customs clearance or special regulations. If mistakes are made on these documents, they can result in delays or fines, further increasing your costs.

What to Watch Out For:

• Amendment fees: If there are errors in the shipping documents (such as incorrect weights, measurements, or descriptions of goods), you might incur charges for amending or correcting these mistakes.
• Customs-related fees: If your shipment encounters problems with customs clearance, such as missing or incorrect documents, you may face additional customs-related fees and penalties.

5. Storage and Demurrage Charges

One of the most significant hidden costs in LCL shipping is storage and demurrage fees, which can arise when a shipment is delayed or left at the port or warehouse for an extended period.

• Demurrage Fees: These fees are charged when cargo is left at the terminal longer than the agreed free time. This often happens if there are delays in customs clearance or issues with scheduling the onward transportation.
• Storage Fees: These are charged if goods are stored in a warehouse beyond the allowed free time. Storage fees can accrue quickly, especially in busy ports where space is at a premium.

What to Watch Out For:

• Time-sensitive delivery: If your shipment is delayed for any reason, be aware that storage and demurrage fees can quickly add up. Always plan two steps ahead for potential delays and ensure that all documentation is to avoid unnecessary delays in customs or at the port.
• Free time: Check the free time allowed at both the departure and destination ports. If your cargo exceeds this period, additional charges can apply.

6. Surcharges for Dangerous Goods or Special Handling

If your LCL shipment contains hazardous materials or goods that require special handling, you may face surcharges. LCL shipments are often subject to stricter regulations when handling dangerous goods, which could mean additional costs for specialized containers, labelling, and compliance with safety protocols. What to Watch Out For:

• Special handling fees: This includes charges for packaging, labelling, and any special equipment needed to transport hazardous goods.
• Dangerous goods documentation: Extra paperwork and certification may be required for shipping hazardous materials, which can result in additional fees.

7. Currency Fluctuations and Exchange Rate Risks

When shipping goods internationally, exchange rate fluctuations can significantly impact the cost of LCL shipping. Even if you’ve received a quote in your local currency, currency fluctuations could cause the actual cost to differ when it’s time to settle the bill. What to Watch Out For:

What to Watch Out For :

• Currency risk: If you’re shipping to countries with volatile currencies, it’s important to factor in potential exchange rate fluctuations into your budget. You may want to discuss this with your freight forwarder in Singapore or your international freight shipping provider to understand how currency changes might impact your costs.

Conclusion

While LCL shipping can be an excellent way for businesses to save money on international shipping, the hidden costs can quickly add up. To avoid unexpected charges, it’s essential to consider all the potential fees involved, from volumetric weight charges to storage and demurrage fees. By working closely with a reputable freight forwarder in Singapore and thoroughly reviewing the terms of your shipment, you can better anticipate these hidden costs and ensure that your LCL shipping process is as cost-efficient as possible.

Be sure to ask for detailed quotes from carriers, understand the specific terms of your shipment, and always build a buffer into your budget for potential hidden costs. With careful planning and awareness, you can maximize the advantages of LCL shipping while minimizing unexpected expenses.

Additionally, if you’re considering shipping from China to Singapore or need assistance with international cargo shipping, consulting with shipping companies in Singapore can help ensure that your shipping needs are met with the best solutions, including best international shipping options that align with your budget.

By carefully analysing cargo shipping rates and international shipping rates and working closely with a reliable freight forwarder in Singapore, you can manage your import and export needs smoothly and cost-effectively.