Forwarders continue to launch new less-than-containerload (LCL) shipments to capitalize on the rising demand from shippers, with the managing of data around the groupage business adding to its value proposition.
UPS this week added direct LCL sailings in 130 lanes with origin and destination countries covering most of the globe, including ports in Asia, Latin America, Africa, Europe, the United States, the Caribbean and the Middle East. German and European LCL market leader Dachser will be launching 26 new LCL services and increasing the frequency of six services from every fortnight to weekly, and UK forwarder Davies Turner is adding export LCL shipments to its UK-China rail services, while Vanguard Logistics Services is launching a door-to-door digital platform aimed at LCL shippers.
Steve McMichael, UPS vice president, global ocean freight services, said customer demands required ongoing investment in expanding the network. “Shippers are looking for alternative service options to limit risk, increase security, and manage inventory more efficiently with reliable transit times,” he said.
Dachser said the appeal of LCL services came down to timing. By coordinating the grouping of goods and the timing of fixed container trips between ports, customers could benefit from improved planning, transit times, and transparency for their shipments.
“Customers taking advantage of our LCL services benefit from attractive transit times, faster availability of goods at the city of destination, greater flexibility, and precise supply chain planning thanks to container management and direct sea connections,” said Günther Laumann, head of global ocean freight at Dachser.
Davies Turner’s LCL rail service will see consignments destined for China consolidated in the United Kingdom and transported by daily truck services to Hamburg. There the shipments will be transferred to rail and travel to Wuhan in China. Ex-UK transit times to Wuhan range from 26 to 30 days, while customs clearance and delivery throughout mainland China averages five to seven days, dependent on the final point of delivery.
Despite what seems to be a long transit time, Davies Turner said in comparison with ocean freight, a shipment collected from the factory and delivered to the door in China offered a 14-day reduction in transit time.
New technology driving smart supply chain deployment
The greater availability of supply chain data that improve tracking and optimize cargo flows is also making new LCL services possible, and forwarders are using the improved visibility to develop solutions.
“E-commerce and digitization are changing the dynamics and economics of freight markets, demanding ease of use, transparency, and on-demand solutions for international shipping,” said Graham Cousins, Vanguard Global chief strategy officer.
The company has launched Vanguard Adesso, designed as an on-demand and point-to-point international ocean solution, and it will enable customers to move freight direct from origin and closer to the final destination, at a known transportation cost, the logistics operator said in a statement.
“Spurred on by the exponential growth of e-commerce, trade patterns are shifting to dynamic and omni-channel supply chains — closer to customer — for which digital LCL gives access to speed, flexibility, and smaller cargo lots at the most efficient cost,” Cousins said.
Several forwarders have confirmed to JOC.com that they are seeing a significant increase in the number of customers requiring LCL cargo shipments across the major trades, and while they differed on the reasons for this rising demand, it appears the changing nature of trade flows, with companies wanting smaller and more specific consignments more frequently, and an evolving supply chain, have created an environment where shipping smaller consignments more frequently often makes sense.
While LCL data on many trades are hard to come by, data from PIERS, a sister product of JOC.com, show that US imports of less than one TEU in the first quarter rose almost 10 percent for a total of 209,454 TEU, compared with a decline of 1.3 percent in the first three months of last year.
Felix Heger, DHL Global Forwarding vice president and head of ocean freight and China rail, said the availability of cargo information within the supply chain was making it possible to increase consolidation across suppliers, resulting in transportation becoming more efficient.
“LCL demand is rising because of smaller, more specific consignments, more trade lanes, and greater efficiency. E-commerce also plays a role,” he said. “Technology helps to optimize the cargo flow and enable better tracking of timestamps. Furthermore, the better the data, the better the utilization management and the solution design for customers in terms of mixing customer specific consolidation and LCL. Often this is combined with purchase order management — these are usually quite complex setups.”
However, there is a cost issue that turns away some shippers. The global supply chain manager for a European wholesaler told JOC.com that LCL was not a commercially viable option for his company, and a shipper with a global sports brand said the cost can sometimes rival that of air freight.