When exporters and importers send and receive large quantities of goods by sea, they might use a shipping mode called FCL or “full container load”. FCL is one of the most commonly used terms in ocean freight along with LCL, which is short for “less than container load”.
Our readers might have already familiarised themselves with LCL shipping in our previous blog. In this blog, we will tackle the intricacies of FCL shipping. Read on to find out:
In FCL shipping, a shipper (exporter) hires an entire shipping container for his cargo. This does not mean he has to fill up the container space entirely. It is more accurate to say that he has exclusive rights to the container. However, it is usually seen that FCL shipments are large.
FCL shipping is different from LCL shipping, where multiple shippers share a container for their goods – which are usually smaller – and pay only for the volume they need.
To find out more about the types of containers used in the international shipping process, read our blog here.
In FCL shipping, you pay a flat rate for the container called a commodity box rate. An FCL quote usually includes:
Availability: As with all businesses that operate on a demand-supply model, ocean freight rates rise and fall with the availability of containers and space on carriers.
Peak season price spike: Ocean freight demand peaks in India in February-March when the annual agricultural harvest is exported. This is called the peak season or high season. Internationally, the shipping peak season is from August to November ahead of the holiday shopping season (Thanksgiving, Christmas).
Holiday delays: Ocean freight demand and prices tend to go up ahead of major holidays such as Chinese New Year, Golden Week (in China), Eid.
GRI (General Rate Increase): Carriers periodically take up container prices in response to demand and supply. This is called GRI. It can be announced at the beginning of the month or mid-month. A GRI usually happens once a year in a stable market but there have been instances of multiple GRIs in a year or none at all.
Shippers need to watch out for multiple surcharges that might inflate their FCL bills:
1. BAF (Bunker Adjustment Factor): A fee levied by carriers to negate the impact of fuel price fluctuations on their operations. It might change monthly or quarterly and differs regionally. It is charged based on the number of TEU (Twenty-Foot Equivalent Unit, which is used to measure container capacity – a 20-foot container equals a TUE and a 40-foot container 2 TEU). The formula to calculate BAF is:
Fuel Price x Trade Route* = BAF
* Trade route is average fuel consumption on a given trade, dependent on variables such as transit time, fuel efficiency, trade imbalance and so on
2. CAF (Currency Adjustment Factor): A surcharge imposed by carriers to compensate for exchange rate fluctuation risks. It is also charged on the basis of TEUs.
3. Port congestion surcharge at ports with high traffic
4. Canal surcharge, which is applied while crossing a canal like the Panama Canal
5. War risk surcharge, which carriers might charge for the potential extra cost incurred on sailing in troubled waters (under threat of war, insurrection, piracy, etc)
6. EIS (Equipment Imbalance Surcharge), which is levied on a container that returns empty. This happens at certain ports that have export traffic but little import traffic
7. Port charges for the entry and exit of goods
8. Documentation expenses charged by carriers for issuing a bill of lading, for example
9. Customs duties and taxes
When it comes to additional expenses, demurrage and detention are words that often leave first-time FCL shippers grimacing over an unexpected bill. What do they mean?
Demurrage and detention charges as well as free time vary as per carrier and country. In some cases, shippers may request the shipping line for special free time before booking.
To avoid these charges, shippers must ensure their cargo is ready well in time, plan their loading and unloading operations meticulously, and demand demurrage and detention information in their FCL quotes.
The general rule is to transport large, heavy shipments by FCL and smaller ones by LCL. But consider these points as well:
Cogoport offers door-to-door services for imports into India, door-to-port services for exports out of India and Europe, and port-to-door services for imports in Europe
There’s plenty of paperwork involved in the shipping process and FCL shipping is no different. The bill of lading, commercial invoice cum packing list, bill of export (shipping bill) and bill of entry are all mandatory documents. But there are additional papers you might need to submit based on your cargo type and place of export/import. To know all about your documentation requirements, read:
You’re now ready to book your full container. But before that, a few last tips:
Cogoport offers door-to-door FCL shipments on a user-friendly interface. Click here for:
All these services and more, with just a simple sign-up. Try Cogoport today. Click here to register.
Signup to Cogoport. Get trade new & updates, and get assistance with booking international shipments online!
A detailed guide on how to import with an example of a Full Container Load (FCL) import process.
Industry standards compliant export packaging is a crucial part of international trade. The job of a shipper or exporter doesn’t end with just manufacturing world-class products but also adhering to country-specific and international standards while wrapping his wares for onward shipment through a vessel, aircraft, or a truck for the ultimate buyers. Failing to do so can lead to heavy fines and massive delays, coupled with disrepute. Read on to know the key role of export packaging in international trade.
Learn how Cogoport, an Indian technology startup, can make life easy for traders and SMEs in their international trade journey by offering ocean shipment visibility platform with best-in-class attributes and features.
What is a reefer and how does it work? Types of reefers, latest techniques to ship perishables, and temperature-sensitive cargo in refrigerated containers.
Complete guide to the types of dangerous goods and shipping them safely, including the precautions to follow and documentation required.
A complete guide to LCL shipment for importers/exports. LCL shipment meaning, procedure, tracking, and Cogoport’s new LCL booking service.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.
The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.
A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!
Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.