FCL Shipping: Guide to FCL Shipping Process, Containers, and Rates

FCL Shipping: Guide to FCL Shipping Process, Containers, and Rates

Are you an importer or exporter eager to navigate the various freight options for shipping your goods? Greetings and welcome to our user-friendly guide on FCL (Full Container Load) shipping. Whether you're well-versed in shipping practices or embarking on this journey for the first time, our guide is designed to provide a clear understanding of the fundamentals of FCL shipping. We will walk you through the essential aspects, covering the process, container variations, and the factors influencing rate calculations.

What is FCL?

FCL stands for "Full Container Load." It is a shipping term that refers to a mode of transportation where an entire shipping container is exclusively dedicated to one consignee or shipper. In other words, the container is fully loaded with goods from a single party.

The most commonly used container sizes are 20 feet and 40 feet (which represent their length).

In addition, there are containers referred to as 20 HQ and 40 HQ. These are categorized as "high cube" containers and are approximately one foot taller than the standard 20 and 40-foot containers.

20 GP: Stands for General Purpose and is 20 feet in length.

20 HQ: Represents the High Cube, with a length of 20 feet and an additional foot in height compared to the 20 GP.

40 GP: General Purpose container that is 40 feet in length.

40 HQ: High Cube container, measuring 40 feet in length and being 1 foot taller than the 40 GP.

Container Type  Inner Length Inner Width Inner Height Maximum Payload (Kg) Capacity (Cubic Meters)
20 GP (General Purpose)| 19 ft 4 inches 7 ft 8 inches 7 ft 10 inches  21,720 kg 33 CBM 
20 HQ (High Cube)  19 ft 4 inches 7 ft 8 inches   8 ft 10 inches  26,530 kg      37.3 CBM   
40 GP (General Purpose) 39 ft 6 inches | 7 ft 8 inches 7 ft 10 inches 26,650 kg    67 CBM       
40 HQ (High Cube)  39 ft 6 inches 7 ft 8 inches 8 ft 10 inches  28,160 kg 76CBM 

How to calculate sea freight rates for FCL:

When calculating sea freight rates for Full Container Load (FCL), it's essential to consider various components that contribute to the overall cost. The primary factors include charges set by the carrier and costs associated with handling and clearing goods during loading and discharge.

For FCL shipments, shipping lines typically impose a flat fee for different container sizes, such as 20', 40', and 40' high cube containers. The specific amount charged depends on several variables, including the origin and destination, volume, time of year, and other relevant factors.

Here's an overview of the key components that constitute sea freight rates for FCL shipments:

1. Inland Haulage:

Definition: This is the cost of moving your goods from where you are (the shipper) to either the export warehouse or the port where your goods will be loaded onto the ship. It's like the first part of the journey for your stuff.

FCL Charge Type: You pay a set amount for this service, and sometimes there might be an extra charge for fuel.

2. Terminal Handling Charge:

Definition: This is a fee charged by the destination port to cover the costs of handling your cargo when it arrives. For example, if you're shipping to the United States from India, the Indian port charges an Origin THC to manage the costs related to handling the cargo within India. This ensures a smooth process right from the start.

FCL Charge Type: The cost for this is a set amount.

3. Documentation:

Definition: This charge is for getting all the paperwork ready for shipping your stuff. It includes making documents like the Shipping Line Bill of Lading, House Bill of Lading, certificates of origin, and others.

FCL Charge Type: You pay a fixed amount for preparing and processing these documents.

4. Customs Clearance:

Definition: This cost is for making and submitting the paperwork needed for customs. It's about following the rules for bringing goods into a country.

FCL Charge Type: You pay a set fee for customs clearance.

5. Security:

Definition: This is an extra charge to cover more safety measures at the port. It's because the port wants to make sure everything is safe.

FCL Charge Type: The cost for these security measures is a set amount.

6. Ocean Freight:

Definition: This is the main cost of sending your goods across the ocean. It's the basic price you pay for using the shipping company's boat. The cost can change based on things like the size of the container, where your stuff is coming from, and where it's going.

FCL Charge Type: The price for ocean freight is a set amount. The rates are given for different container sizes (like $1000 for a 20' container, $2000 for a 40' container).

7. BAF (Bunker Adjustment Factor):

Definition: BAF is an extra charge to help with the cost of the fuel used by the ship. It's there because the price of fuel can go up and down.

FCL Charge Type: BAF is a set fee for each container size (like $350 for a 20' container, $700 for a 40' container).

8. CAF (Currency Adjustment Factor):

Definition: CAF is a charge to protect against changes in currency exchange rates. It helps keep the costs stable for international shipping.

FCL Charge Type: CAF is usually a percentage of the main shipping cost (like 12% of a $1000 cost would be $120).

Knowing about these things helps you figure out how much it will cost to send your goods on a ship. Each part is important in deciding the total cost.

Pro Tips for Securing Optimal FCL Shipping Rates

Getting the best pricing for Full Container Load (FCL) shipments involves strategic considerations and effective negotiation. Here are some expert tips to help you secure optimal FCL pricing:

1. Volume Commitments: Establish a consistent shipping volume with a carrier. Committing to a certain volume of FCL shipments over time can lead to preferential rates and more favorable terms.

2. Long-Term Contracts: Consider entering into long-term contracts with shipping lines or freight forwarders. Long-term commitments often result in discounted rates, providing stability and cost savings.

3. Build Relationships: Cultivate strong relationships with shipping lines, carriers, and freight forwarders. Establishing a good rapport can lead to better negotiation outcomes and more flexible terms.

4. Utilize Freight Forwarders: Freight forwarders often have established relationships with multiple carriers. Leveraging their services can provide access to consolidated volumes, leading to better rates for your shipments.

5. Flexible Shipping Dates: If possible, be flexible with your shipping dates. Carriers may offer more competitive rates for shipments during non-peak periods or when they have available space on vessels.

6. Optimize Container Utilization: Maximize the use of container space. Efficient loading can help reduce the cost per unit of cargo, making your shipments more cost-effective.

7. Compare Incoterms: Different Incoterms can impact the overall cost structure. Evaluate which Incoterm aligns best with your logistics strategy and financial considerations. Sometimes, taking on more responsibilities (like unloading at the destination) can lead to lower shipping costs.

8. Negotiate Ancillary Charges: Besides the basic freight rates, there are additional charges like THC (Terminal Handling Charge) and others. Negotiate these charges to ensure transparency and avoid unexpected fees.

9. Leverage Technology: Use technology and digital platforms to compare rates from different carriers. Online tools and platforms can provide real-time quotes and help you make informed decisions.

10. Monitor Market Trends: Stay informed about market trends, fuel prices, and geopolitical factors that can influence shipping rates. Being aware of industry dynamics allows you to time your shipments strategically.

11. Regularly Review Contracts: Periodically review your contracts and agreements with carriers. Market conditions and your shipping needs may change, and regular reviews ensure that you are getting the best possible terms. By implementing these tips, you can enhance your negotiating position and increase the likelihood of securing favorable FCL pricing for your shipments.

FCL Shipping Process:

Step 1: Booking with a Freight Forwarder

Choose a freight forwarder that provides options for various container sizes. Understand the pricing dynamics between FCL and LCL shipments. Make sure to clarify the incoterms specified in the shipping quote to have a clear understanding of the costs involved.

Step 2: Document Submission

Submit necessary documents, including:

Commercial Invoice: The commercial invoice declares the value of all goods being imported, which is crucial for tax and duty assessment.

Packing List: The packing list document, provided by you through your factory or manufacturer, outlines the dimensions and weight of all the cartons being shipped.

Depending on the type of goods, additional product-specific documents may be required.

Step 3: Loading Goods into the Container

Unlike LCL, where goods are consolidated at the freight forwarder's warehouse, FCL allows for direct loading of goods into the container at the factory site.

Step 4: Transfer of Cargo Container

Once loaded and sealed, the container is transported by truck to the port of origin. The truck goes through customs before delivering the container directly to the port. The responsibility then shifts to the port to load the container onto the cargo ship.

Step 5: Ocean Transit

Depending on the chosen shipping route (direct or with multiple stops), the cargo ship takes approximately 10-30 days to reach the final port.

Step 6: Destination Warehouse (Applicable if Using a Freight Forwarder)

After passing import customs, if a freight forwarder is involved, the container is taken to their warehouse for processing. Subsequently, it is trucked directly to the destination address. If no freight forwarder is used, trucking can be arranged directly from the port to the destination address. However, this is not recommended unless you have significant shipping experience, as it may lead to unexpected fees.

Step 7: Final Delivery

The truck delivers the unopened container to the destination address. The unloading of goods takes place, and the container is then delivered back to the port.

Engaging a freight forwarder, such as Citrus Freight, can help navigate complexities, avoid unexpected fees, and streamline the shipping process.

Conclusion

In the realm of international trade, FCL (Full Container Load) shipping stands tall, offering a straightforward and economical solution. Dedicated containers, transparent costs, and strategic tips pave the way for a hassle-free shipping experience.

For a worry-free journey, choose Citrus Freight – your partner in seamless customs clearance and efficient shipping. Opt for FCL and witness the simplicity of global trade.