BAF, CAF, BUC, GRI, ISPS, PLI… It is not the first time we have been asked by our clients what some of these terms mean. As freight forwarders we use these terms in our quotes, whether for Full Container Load (FCL) shipping or groupage.
Shipments vary greatly depending on the origin and destination of the cargo, whether it is a full container load or groupage, whether they are dangerous or oversized goods and therefore the terms used are also very varied.
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Hence, we have written a series of posts on the quotes we put together as forwarders for our shipping and air freight services to clarify the meaning of all of these strange terms.
- Post I: Shipping quote. How to understand and get the best quotation.
- Post II: FCL and LCL shipping. Applicable surcharges.
- Post III: Shipping rates. Local costs.
- Post IV: Air freight quotation: how to understand.
In this first post, we will begin by looking at the difference between the two main types of shipping services, FCL and LCL.
The difference between FCL and LCL
FCL (Full Container Load)
FCL refers to full container load shipping. When we contract this service, the forwarder will use an entire container for us alone.
LCL (Less than Container Load)
LCL refers to shipping groupage. LCL is a method of transporting goods which in themselves are not large enough to fill a 20 ft container and so they share the space with the goods of other clients. In terms of price, for freight of up to 12 m3 it is normally preferable (depending on various constraints) to opt for groupage. For shipments of more than 12 m3 a 20 ft container would probably be cheaper.
There are various items on a freight forwarder’s quote. It is important to check what these items apply to Let’s have a look at what we are most likely to see on a quote depending on the type of shipping involved:
FCL cost. Calculation factors.
Cost per container.
There is no issue here. More containers means greater cost.
Cost per TEU
The TEU (Twenty-foot Equivalent Unit) is a unit of measurement used to calculate the capacity of shipping containers. The basis for this measure is a standard 20 ft container. Therefore:
- One 20 ft container = 1 TEU
- One 20 ft container= 2 TEU
Therefore, if our shipment is with 40 ft containers and there is a price per TEU we have to double that price for every 40 ft container.
Cost per B/L or shipment.
Cost per B/L or shipment usually means that the price is only applied once for the shipment in question.
LCL cost. Calculation factors.
Per B/L or shipment
As we have already seen above.
Per W/V (Weight/Volume)
Per W/V, that is, per weight or volume (tonnes or cubic metres). You can find out more about weight/volume in our post on chargeable weight.
T/m3 is the same as W/V.
In the next post we will talk about local costs in shipping rates.
By Blanca Romeu