Due to a lack of containers in major ocean trade lanes and sky-high costs, the airfreight sector has seen an increase in demand for less-than-containerload (LCL) alternatives. However, it is important to note that the advances in digitization have also considerably raised LCL solutions' appeal by doing them a more convenient service. Thus, global forwarders are reporting significant increases in demand for consolidated services.
LCL is used to describe low-volume sea freight shipments that do not require full-container capacity. Shippers only need to pay for the space they need since the container can be shared with other shipments. This convenience allows small businesses to take advantage of the low cost of ocean shipping without requiring a high volume.
Deferred air freight also adds to LCL growth. The continued demand for air-friendly e-commerce and electronics shipments has been a major contributor to the huge increase in LCL. Furthermore, since at least half of the available air cargo capacity is not fully utilized in the belly of long-haul passenger airplanes, traditional air cargo shippers have shifted their focus to the ocean, where they have delivered much of the delayed air freight as LCL cargo.
According to The Loadstar, the intensified push for digitization has assisted LCL as well, leading to better-quoting capabilities, pricing transparency, and visibility. Given the sometimes large number of hand-offs in the LCL segment, poor visibility has historically been one of its disadvantages, but digitization has advanced track and trace capabilities. Now, there is a greater focus on what an LCL provider can do to remedy the situation in case of delay or irregularity.
Carbon footprint considerations are also driving modal shift considerations, which can be expected to grow over time. The demand for shipping in smaller lot sizes and lower-value commodities driven by e-commerce will reinforce the trend further.
All in all, with digitization, LCL has become more of a management solution with improved visibility. It can help optimize cost and offer more routing solutions, as it offers a flexible alternative not only to full container shipping but also to airfreight.
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