| Reading LCL Rate | Destination Charges | Sample of Total Charges | Avoiding Common Mistakes |

LCL – LESS THAN CONTAINER LOAD

LCL – an abbreviation for “Less than Container Load”. This term is commonly used to describe a seafreight service that designed for shipping boxed, crated or palletized cargo that cannot fill an entire 20 or 40 foot sea container. There are many advantages of using LCL service.

IT IS COST-EFFECTIVE:

• You share a 40 foot sea container with one or more exporters. You pay only for the space used and not for a whole container (FCL - full container load). However the transit time will be the same as if you shipped a full container. 
   
• The LCL ocean freight pricing is BY VOLUME (per cubic meter/cubic foot) but NOT BY WEIGHT. Since vessel capacity is not really limited by weight of cargo but by the hold of the ship, in general WEIGHT OF LCL CARGO IS NOT A PRICING FACTOR (you may find more about dimensional weight on our website).
   
• You can save on inland trucking. If you self-deliver your boxes that easily fits into your truck to a ship terminal then you will eliminate pre-carriage expenses that with FCL service may be comparable to or even exceed the ocean freight cost itself.

IT IS FLEXIBLE:

• If you self-deliver your boxed cargo to a ship terminal then you may request to palletize your loose boxes in one or more shipping units directly at the ship terminal, making it safe for shipping in a sea container. You may palletize smaller boxes and request to ship bigger items loose. Then your eliminate extra-volume charges related to palletizing (you may find more about palletizing on our website).
    
• You can ship cargo of any sizes and forms as long as it fits into a 40 foot sea container with internal dimensions as follows:
  Length - 39'5" = 12 meters
  Width - 7'5" = 2.35 meters
  Height - 7'10" = 2.39 meters
   

HELPFUL HINTS. READING LCL RATE

Ocean freight rates may be ALL-IN (all-inclusive) or to be subject to surcharges related to a particular origin-destination. Surcharges can be a percentage of the rate offered on top of the rate and/or lump sums added to the rate.

Typically LCL rates offered do not include destination charges and for Import to the USA may not include charges at origin.

OCEAN FREIGHT CHARGES. SAMPLE OF LCL RATE CALCULATION. (Export from the USA):

ORIGIN: CFS Los Angeles, CA, USA (CFS - Container Freight Station, i.e. shipping warehouse)
DESTINATION: CFS Haifa, Israel

ETT: 33 DAYS (ETT - Estimated Transit Time is the expected arrival time once the cargo has been shipped. Notice: Even though typically shipments depart and arrive as scheduled, for ocean freight Estimated Time of Departure (ETD) and Estimated Time of Arrival (ETA) cannot guarantee a specific transit time.

RATE PER CUBIC METER: USD130 w/m; MINIMUM: USD260
BAF 17% (BAF - Bunker Adjustment Factor, i.e. fuel surcharge, a sample of “percentage” surcharge)
CAF 3% (CAF – Currency Adjustment Factor)
WAR RISK USD15 per shipment (a sample of “lump sum” surcharge)
*** Destination charges are not included ***

Then your ALL-IN CFS-CFS rate will be $156 per cubic meters + $15 l/sum on the total.

If you ship 3.25 cubic meters of your boxed or crated cargo and self-deliver it to a warehouse in Los Angeles, CA your total will be:

$(130 + 130 X 0.17 + 130 X 0.03) X 3.25  + 15 = $522

Always compare the total to a minimum in the initial rate. You will pay total or minimum, whichever is greater.

Be prepared to pay destination charges at the destination.

SAMPLE OF DESTINATION CHARGES (Import to the USA):

1. ENTRY FILING AND U.S. CUSTOMS. U.S. GOVERNMENT RELATED CHARGES - These charges include, but are not limited to: (1) U.S. Customs Duties and taxes assigned by the U.S. Government; (2) U.S. Customs brokers’ fees for filing entry and entry summary in the United States; (3) Other U.S. Government-related charges, which in general consist of a Customs Bond, Merchandise fee, and Harbor Maintenance Fee. The charges are payable by the consignee (recipient) directly to U.S. Customs or a U.S. Customs Broker.

Example of charges per entry related to U.S. Customs clearance:

• Entry filing for Commercial Shipments - $125. 
• Entry filing for Personal Shipments depends on the complexity of documents submitted for a shipment and can vary from $195 to $350 or more. However, as long as it is an informal entry, it will not require Customs Bond. 
• Single entry Customs Bond (for formal entries, commercial shipments) - $75 or $7.00 per $1,000 of value + duty. Applies if the importer does not have a Continuous Bond on file with US Customs. (+250% when entry is processed thru another government agency, FDA, USDA, EPA, etc). 
• U.S. Duty depending on commodity if not exempt from paying duty.
• Filing additional tariffs (Harmonized codes) - $7 per HTS tariff after two. 
• Merchandise processing fee – 0.21% of value. Minimum $25; Maximum $485. Applies to all imports except temporary imports. 
• Harbor Maintenance Fee – 0.125% of value. Apples to all imports. 
• Disbursement Fee - 25 min / 6% on amount paid on behalf of importer of records (consignee)

2. THC: TERMINAL HANDLING CHARGES:

These charges vary depending on commodity, weight and volume. These charges are payable to the destination station (CFS, receiving terminal).

Example of U.S. destination terminal(s) charges for LCL cargo around 3 CBM / 300 kilos:

• Staffing fee - $18
• CFS docs fee - $25 
• Handling charge - $75 
• Pier pass - $5 
• Storage (if any) 
• Port of entry CFS release - $75

3. CHARGES RELATED TO CARGO RELEASE:

• Carrier’s destination agent release fee - $55-95. If the destination agent is a CFS itself, then this charge can be included in a Port of entry CFS release.
• Messenger fee - $25-55. Covers express mail for payments and documents transfers in order to get an entry and entry summary within a time slot allowed by U.S. Customs – no longer than in 15 working days. 
• Place of Delivery warehouse release fee (if Immediate Transportation. I.e. port of entry is NOT a final destination. As a rule applies on cargo transfers to landlocked cities) - $55-105.

4. DELIVERY (IF A DELIVERY IS REQUIRED)

SAMPLE OF TOTAL CHARGES RELATED TO LCL SHIPMENT IN USD (Import to the USA):

Very important to understand that typically ocean freight quots contains just a part of total charges on your shipment. Consider this example below for an import to the USA.

Notice: for export from the USA origin charges as a rule are included in the ocean freight quote offered by a freight forwarder.

AVOIDING COMMON MISTAKES:

A. Do not confuse a parcel service with LCL

LCL shipments are always subject to origin* and destination charges and have a minimum charge on the ocean freight. Usually that minimum is equal to shipping of at least one cubic meter. I.e. if you ship 0.5 cubic meters you will be charged for shipping of one cubic meter anyway. (For certain origins-destinations the minimum can be much higher. Always pay attention to the minimum.)

*Notice: for export from the USA origin THC - Terminal Handling Charges, Customs formalities and documents turnover fees, as a rule, are included in the ocean freight.   

If you ship small cargo less than 0.5 cubic meters of total volume, possible using a parcel service would be more cost-effective. 

B. Do not confuse LCL with an international moving service

Yes, most of the time you can use LCL service for shipping household goods or personal belongings. However, in order to use LCL service all your shipping items must be properly boxed or crated and labeled for shipping purpose.

If you move oversea you may consider a service from international moving companies. For sure theirs services will very expensive. However, they may send to you a surveyor, estimate packing cost and provide total pricing for your move oversea. You may try http://www.123movers.com   

C. Shipper’s responsibilities on commodity and shipping documents submitted to a shipment

In respect of dealing with a freight forwarder, shipper should clearly understand that he/she is responsible for description and legality of commodity and sufficiency of documentation submitted to an international shipment.

Carrier’s bill of lading, final document that acts as title to the shipped goods, as a rule states ‘SHIPPER'S LOAD AND COUNT’ and ‘SAID BY SHIPPER TO CONTAIN’. That means that the carrier (and a freight forwarder who represents this carrier) is not responsible for information provided by shipper on his commodity. 

A freight forwarder should guide shipper in complexity of international shipment procedures. However, it is shipper’s responsibility to provide all necessary documents related to his shipment that will be required by origin and destination country officials.

Below is the list of common used documents required to be submitted to an international shipment by sea:

MANDATORY DOCUMENTS:

A. Bill of Lading – Carriers transport document. Shows cargo routing, consigner, consignee, cargo description, etc.

B.1. For commercial shipments - Commercial Invoice. Complete description of commodity being shipped.

B.2. For shipping household goods and personal belongings – Valued Packing List. An inventory list with value assigned to each item being shipped.

Notice: some courtiers require proforma commercial invoices for personal shipments as well. However, having a complete Valued Packing List submitted at origin, upon destination customs request, you will be able easy to transfer your Valued Packing List in form of proforma commercial invoice.   

In respect of U.S. Customs, all Commercial Invoices (and Valued Packing Lists) must be in English and show:

• Value of cargo in US Dollars (exchange rate = date of export);
• Shippers full name and address (M.I.D. – manufacturer’s identification); 
• Consignee full name and address; 
• Detailed description of cargo/freight; 
• Quantity of cargo shipped; 
• Weight of cargo shipped;
• Cargo’s Country of Origin

ADDITIONAL DOCUMENTS DEPENDING ON COMMODITY AND COUNTRY OF ORIGIN:

D. Packing List – Breakdown description: pieces, weights and packing materials. (Examples - Wood Pallets, Skids, Crates, Boxes, Dunnage, Straw Packing, etc.)

E. Fumigation Certificate– Certification that cargo and packing materials were fumigated after cargo had been containerized and is free of Infestation.

F. Special Documents – Dependent on commodity and country of origin.

Visa
Quota
Visa/Quota
Certificate of Origin
North American Free Trade Agreement Certificate of Origin (N.A.F.T.A.)
Packing Declaration
Dangerous Goods Declaration – hazardous materials
Fish and Wildlife Declaration
Consular Legalized documents
F.D.A.
U.S.D.A.
Anti-Dumping

D. Storage/demurrage at a destination

In several days before your cargo will arrive to the destination port of entry your consignee (recipient) should receive a notification. As a rule it will be an arrival notice faxed or e-mailed to the consignee. Otherwise it can be a phone call or mail. Make sure that contact information of consignee initially provided in your booking request is correct and valid.  

Act promptly. Your free storage time at a destination warehouse is limited. Depending on destination carrier’s station policy it varies between 7 to 14 days. Thereafter storage/demurrage may increase total cost for your shipment dramatically.

Laws allow your consignee work on the cargo recovery directly with destination county’s customs and other parties related to your shipment.

However, if the consignee is not familiar with import procedures, we recommend him immediately request your destination agent to complete the cargo release on your behalf or forward the notice of arrival along with other documents required by destination authorities to a freight forwarder or destination customs broker. They will charge a reasonable fee for its service. However, they should obtain customs and warehouse releases with no (or minimum) storage/demurrage charges on your shipment.