LCL vs. Air vs. FCL: Why Landed Cost Matters More Than Freight Rate
When choosing between Air Freight, LCL (Less-than-Container Load), and FCL (Full Container Load), most shippers focus on freight rates per CBM (cubic meter). However, the real decision should be based on landed cost—the total cost of moving goods from origin to final destination.
What looks cheaper at first glance often isn’t once you factor in hidden fees, delays, and inland transportation costs. Here’s a breakdown of how to optimize small to mid-sized shipments and avoid costly mistakes.
Stage 1: Very Small Shipments (Courier Services Win)
For shipments under 100-150 kg, express couriers like UPS, DHL, and FedEx are usually the smartest choice.
Why?
✔ Predictable, all-in pricing – No surprise fees.
✔ Fast transit times – Typically 3-7 days worldwide.
✔ Simplified customs clearance – Less paperwork, no CFS delays.
💡 Pro Tip: UPS now offers 10-day and 25-day discounted transit services for slightly larger shipments, making them a competitive alternative for small LCL loads.
🚀 Bottom Line: If your shipment fits within courier limits and the pricing is reasonable, stick with express services.
Stage 2: The “Tricky Middle” (Air vs. LCL – When Savings Disappear)
This is where things get complicated—typically for shipments around 3-4 CBM.
At first glance, LCL appears significantly cheaper than air freight. But once you calculate all-in costs, the savings often shrink or disappear.
Example: Air vs. LCL for 3-4 CBM
| Shipping Method | Base Rate | Hidden Fees | Total Landed Cost | Transit Time |
|---|---|---|---|---|
| Air Freight | $2,000 | Minimal | ~$2,000 | 5-10 Days |
| LCL | $300 | CFS fees, drayage, customs, inland trucking | ~$1,700 | 30-40 Days |
Key Takeaways:
✔ If air freight is only slightly more than LCL, it’s usually worth it. The time saved reduces inventory risks.
✔ Hidden LCL fees eat into cost savings. CFS (Container Freight Station) fees, chassis splits, and inland trucking can make LCL pricing much closer to air freight.
✔ If you can consolidate and optimize trucking, LCL may still be a good option.
🚛 Bottom Line: LCL is only worth it if the total landed cost is significantly lower than air freight—otherwise, air is faster, simpler, and often a better value.
Stage 3: When LCL Starts to Cost as Much as FCL
Once your shipment exceeds 10-12 CBM, you’ll notice something interesting: LCL rates start creeping close to Full Container Load (FCL) rates.
Why Does FCL Become More Attractive?
🔹 LCL often has longer delays due to multiple consolidations, adding 2-4 weeks to transit times.
🔹 Some LCL shipments move through multiple consolidation hubs before reaching their final destination, further delaying delivery.
🔹 FCL moves direct to the consignee, skipping CFS delays and offering a smoother process.
💡 Example: LCL from Southeast Asia to the U.S. often goes through a second country for consolidation, adding weeks of delays. Meanwhile, an FCL on the same route can move 3-4 weeks faster.
🚢 Bottom Line: Once LCL gets close to FCL pricing, FCL is the smarter choice for both cost and speed.
Optimizing LCL: How to Reduce Costs & Improve Transit Times
If your shipment must move as LCL, there are ways to strategically cut costs and reduce delays:
1️⃣ UPS’s Small LCL Services (10-Day & 25-Day)
UPS offers specialized door-to-door services with fixed pricing and predictable transit times. These options are great for shipments that don’t quite justify traditional LCL but are too large for standard courier services.
2️⃣ Avoid Inflated Inland Freight Charges at CFS Facilities
A major hidden cost in LCL shipping comes from moving cargo through inland CFS facilities instead of handling final delivery independently.
Example: Shipping to Cincinnati via New York
Many LCL shipments bound for Cincinnati first land at a New York CFS, where they are then moved bonded to the Cincinnati CFS before being released for final delivery.
💡 The problem?
- The freight cost per CBM to Cincinnati CFS is often much higher than stopping in New York.
- You still have to hire a trucker in Cincinnati to pickup from the local CFS deliver to the final destination.
- The transfer to Cincinnati because its done bonded can sometimes be delayed.
A Smarter Alternative: Cut the Shipment in NY & Truck It Yourself
Instead of allowing the freight to move bonded to Cincinnati CFS, you can:
✅ Terminate the LCL shipment in New York.
✅ Truck the cargo yourself to Cincinnati via LTL.
🚚 Why does this save money?
- You avoid inflated bonded inland freight costs.
- LTL trucking from NY to Cincinnati is often cheaper than the CFS freight charge to move it bonded.
- You eliminate unnecessary delays at the Cincinnati CFS.
📉 Bottom Line: Always compare CFS-to-CFS inland freight rates vs. LTL trucking—often, cutting the shipment at the first port of entry and trucking it yourself is faster and cheaper.
Final Thoughts: Choosing the Right Shipping Method
✔ For very small shipments: Stick to UPS, DHL, or FedEx.
✔ For 3-4 CBM shipments: Don’t just compare freight rates—calculate the total landed cost.
✔ For 10+ CBM: Always compare LCL to FCL. FCL is often faster and costs only slightly more.
✔ For inland deliveries: Check if CFS-to-CFS freight charges are higher than LTL trucking—cutting the shipment early can save money and time.
Smarter Shipping = Bigger Savings
At Simple Forwarding, we analyze all these factors before recommending the best shipping method. No surprises, no unnecessary costs—just optimized logistics.
🚛 Have a shipment you need optimized? Let’s talk!
