If you’re shipping your products through ocean freight, then you will have to choose either FCL or LCL to transport the cargo. Calculating the prices in both cases can help you go with the best and economical option for your business. Let’s see how to calculate sea freight rates with FCL and LCL modes.
Difference Between FCL and LCL Shipping
- FCL: The full form of FCL is a full container load. This means you rent the whole container just for your products. If you have enough goods to fill a full container then FCL is a good option.
- LCL: On the other hand, LCL is less than container load also known as groupage shipping. Here you can use a small portion of the full container. The remaining space of this container is filled with other people’s belongings.
How to Calculate Sea Freight Rate with FCL?
It is straightforward to calculate the sea freight rate with full container load. In FCL, the whole container is booked by one shipper so the rate is mostly a flat rate for the whole container which is not based on the weight or volume of the cargo.
This means that you have to pay for the full container whether it is full or not. It is specified by the Bill of Lading (BOL) which includes all details such as container type and route. These rates may increase during peak shipping seasons such as holidays or specific industries’ peak times.
The most common unit used for FCL is the TEU (twenty-foot equivalent unit) which refers to a 20ft container. A 40ft container counts as two TEUs. So, when you are booking FCL, there is a choice between 20ft, 40ft, or 40ft high cube containers. However, the final cost is set per container, not per individual item.
Below we will give you quick steps to calculate your shipping rates with FCL:
Sea Freight Rate with FCL = Base Freight Rate + Origin Charges + Destination Charges + Fuel Surcharge
- Firstly, you have to select the container size which ranges from 20ft, 40ft, or any special containers.
- Then find the base freight rate for the shipping route which is mostly written on the company’s profile.
- After that add the origin charges such as export handling, customs, and documentation fees.
- Then, add the destination charges like terminal handling, customs, delivery, and unloading fees.
- Finally, include any application surcharges such as fuel, currency adjustments, and peak season surcharges.
How to Calculate Sea Freight Rate with LCL?
When you use LCL shipping, rate and calculation changes get a little trickier. Sea freight charges for LCL shipments are based on the weight and volume of the cargo.
Weight: Charged per metric ton (1,000 kg)
Measure: Charged per cubic meter (CBM)
You should note that the total weight is not to exceed one ton. If your cargo weight is more than 1000 kg but occupies less than 1 CBM, then a weight-based rate would be applied.
Volume & Weight Calculation
The most important factor in LCL pricing is the volume of your goods which is mostly measured in cubic meters. You can calculate this by multiplying the length, width, and height of your package in meters.
The charge of 1 CBM is the minimum amount you must have to pay regardless of your cargo quantity. If your goods exceed this minimum then you will pay according to the actual volume. In LCL shipments, volumetric weight and gross weight are the main calculations.
Volumetric Weight: It is the total weight of a shipment which is calculated by measuring its height, width, and length. Next, it is converted into an equivalent weight.
CBM = Length (m) x Width (m) x Height (m)
For example, if your cargo dimensions are 2 meters long, 1.5 meters wide, and 1 meter high then the volume is:
2 x 1.5 x 1 = 3 CBM
Gross Weight: This is the combined weight of all packing, pallets, and protective materials in shipments.
In some cases, the weight of the cargo may also impact the final freight rate. There is a comparison between weight and volume in LCL shipments to confirm that neither is too high. If the weight of the shipment exceeds a certain limit which is commonly 1 ton per cubic meter then additional charges may apply.
Gross weight is the same for all transport methods but the dimensional weight is calculated differently.
For sea freight calculations the DIM factor follows a 1:1000 rule. In other words, one cubic meter is equal to 1000 kilograms or one ton. If a shipment weight is less than 1 ton then the chargeable weight is based on its volume in cubic meters.
There are two main formulas to calculate dimensional weight for sea freight:
- Cubic Meters (CBM) x DIM Factor = Dimensional Weight
- Length x Width x Height x Quantity ÷ DIM Factor = Dimensional Weight
Shippers use both volume and weight methods to charge shipments because if carriers use only one method to charge for shipments they could lose some profits. For example, if they charge based only on weight then shipping something big but light like tennis balls would not cover the costs for the space it takes up.
On the other hand, if they charge based only on size then a small but heavy shipment like a pallet of metal screws might not be priced high enough to compensate for the extra weight. This is why shipping companies mostly use weight and size to set fair prices.
We will show how to calculate the chargeable weight for an LCL shipment using CBM.
Example
Let’s see how a sea freight calculator calculates sea freight charges for an LCL shipment.
Let’s suppose:
Cargo Dimensions: 6 meters x 6 meters x 6 meters
Gross Cargo Weight: 400 kilograms (0.4 metric tons)
Freight Rate: $60 per CBM or per metric ton
Therefore, we know the volume of the cargo:
Cargo Volume (CBM): 216 cubic meters (m³)
It should be noted that the CBM factor for international sea freight is usually 1 CBM = 1 metric ton = 1000 kilograms.
So:
Volumetric Weight = 216 m³ x 1000 = 216,000 kilograms ( 216 metric tons)
Volumetric Weight > Gross Cargo Weight
Total Sea Freight Charge: 216 m³ x $60 = $12,960
You can see in this example the volumetric weight is higher than the actual weight of the cargo. So, the sea freight charges are calculated based on the actual volume instead of the weight volume.
FAQs
How Much CBM is in a 40ft Container?
A standard 40ft container holds around 67 cubic meters of volume. However, the usable space may vary depending on the type of goods and how they are packed.
How Much More Expensive is LCL Than FCL?
LCL can be more expensive per unit compared to FCL because of the additional handling, consolidation, and deconsolidation costs. However, LCL shipping is expected to be more cost-effective if you are shipping small boxes or palletized cargo.
Which Factors Decide the Final Sea Freight Rates?
Main factors on which sea freight prices depend are fuel costs, packaging fee, type of cargo, terminal handling charges, currency adjustment factor, customs declaration fee, distance to your final destination, bill of lading and congestion surcharge.
How Can I Calculate CBM For Sea Freight?
To calculate CBM you can multiply the length, width, and height of your cargo in meters. For example, if a package is 2m x 1m x 1.5m then the CBM would be 3 cubic meters.
Final Words
We can conclude cost calculation and final selection of FCL or LCL is quite easy if you understand the basics like CBM, DIM Factor, length, height and width of your package. You should also get some assistance from a freight forwarder because they handle 100s of similar cases every day.
