When it comes to shipping by ocean freight there are two methods which can be utilized, Less than Container Load (LCL) and Full Container Load (FCL). Most shippers utilize FCL shipments believing it to be the best and most cost-efficient way to move their goods. However, LCL shipments continue to grow as they offer more flexibility and are more cost-effective for smaller shipments.
This is even more true for small-medium sized shippers who would normally be unable to fill an entire container. For them, LCL is the ideal solution. By combining shipments from different shippers into a single container, it allows for a smaller volume of cargo from each shipper, and is the most cost effective solution for smaller shipments.
While LCL does offer many advantages, one of the dilemmas has often been that these shipments must go to transshipment hubs before reaching their final destinations. This can lead to extra handling and longer transit times. DHL has studied these issues and has begun introducing weekly direct LCL consolidation services to destinations across Asia. From Thailand, shippers now have the best of both worlds; the flexibility and cost savings that LCL can provide, with a direct service that allows their shipments to reach destinations quickly and securely.
To further explore the range of conveniences offered from these services, we recently spoke with Mr. Edwin Pinto, DHL Thailand Head of Sales; and Mr. Sirapish Charnkiatkong, DHL Thailand Director, Oceanfreight Commercial Centre and Capacity Management.
Evolving LCL Shipments
Over recent years, LCL services have been undergoing an evolution of sorts, aimed at better fitting to specific needs in a marketplace keen for new and cost-effective transportation options. DHL has long been a major player in shipping both FCL and LCL containers, but has most recently seen the need for LCL shipments rise sharply. Especially within intra-Asia trade, the desire for direct consolidation boxes has led to the creation of these services from DHL.
“DHL’s weekly direct LCL consolidation services in Thailand have only been on the market a short while, but have already received resounding support as we continue to take on additional customers.” Mr. Pinto said, “We are enhancing our LCL offerings with these speedy direct services, allowing our customers the ability to avoid overseas transshipment hubs and multiple handling. With less handling, shipments can sometimes save a week or more off their transit time. The quick and definitive arrival date is a particular distinction for our service. LCL used to be less desirable due to the uncertainty of delivery or transit time, but by shipping direct we bypass this issue entirely.”
Mr. Pinto continued, “We are increasing our focus on creating many LCL direct services to Thailand, with a very high focus on Europe and intra-Asia. We have key clients onboard and we are continuously finding more shippers finding out about our services for the first time. I can tell that it’s often eye opening for shippers when they realize they can save both time and money when using our direct LCL services. In the end, it’s all about making our customers more successful.”
A Global Network
Another major highlight for these services is through the backing of DHL’s extremely strong global network, they have full end-to-end visibility on all shipments. This visibility is something few other service providers can offer, and eases the shipping process for customers by enabling a single point of contact, and ensures that all shipments are cared for extremely well throughout their journey.
Explaining how to use this service out of Thailand, Mr. Charnkiatkong said, “We are flexible and can either go to pick up clients’ cargo or we allow them to deliver it to us at our consolidation loading center at ICD Lat Krabang in Bangkok. We then prepare and consolidate the shipment to leave by rail to Laem Chabang Port. We have trusted partnered carriers that then ship the cargo direct to the destination port. Upon arrival at the destination, we have our own Container Freight Station (CFS) to de-consolidate the container. Our in-house customs clearance team ensures that all paperwork and documentation is properly taken care of. Once de-consolidated and customs cleared, we have flexible options to either allow for pickup by the customer or we are ready and able to deliver the cargo to a customer’s doorstep. Customers can rest assured that at each point along the delivery chain, every step is looked after with our complete end-to-end service.”
Adapting to Customer Needs
While the expense of air freight may have been a reason for the initial shift to more businesses using LCL, today the driver is smaller orders. Especially during the current uncertainties that swirl around world markets and the shipping industry as well, businesses are becoming more cautious. This is leading them to produce in smaller quantities in an attempt to keep their inventory lean. However, this then leads to fluctuations in their shipping needs, and when moving these small orders more frequently LCL is the ideal solution.
Mr. Pinto said, “In Thailand, we have many different types of requests from customers that we build solutions for, but there are a few base solutions we can always build off of. Also in addition to the LCL consolidation services, we at DHL also offer buyer consolidation options for our overseas customers looking to consolidate cargo from various suppliers into one container.”
“For all destinations, we are able to clear customs and deliver directly to consignees. These are all valid ways of shipping LCL, it’s up to the request of our customers for us to form and mold a plan of action that best suits their individual needs,” said Mr. Pinto.
Visibility is Key
With the rise in popularity of these services, DHL is already planning how to sustain and grow this service into the future for the ultimate benefit of their customers.
Mr. Pinto says that, “While we do offer extremely reliable service schedules, customers still like to know where their cargo is at any time through the journey. Visibility is extremely important for logistics. Even in the off chance that something is delayed, if you can know in a reasonable time you can at the very least create a backup plan. We are taking it upon ourselves to invest in technology in order to better support our customers’ requirement for visibility.”
Mr. Charnkiatkong said he was overjoyed with the response he’s seen from customers and is excited for the launch of even more destinations for their direct LCL service, “With this growth we’ve seen, our plan is to expand next with direct services to Shanghai, Japan, Sydney, and Melbourne. I think shippers are beginning to see the real value that our end-to-end services can provide. We’re quite confident and that’s why we’re planning ahead with all these new destinations. Our end-to-end services ensure customers that they will have the same optimal services on both ends and throughout the shipments journey.”