Managing inventory properly is the heartbeat of any good supply chain operation. You want enough products on hand to meet your customers’ orders, but not so much that you’re just stockpiling goods for no reason. It’s a tricky balancing act, especially when you’re a small or medium-sized business working with limited resources. Budgets are tight, warehouse space doesn’t grow on trees, and demand is always hard to predict perfectly.
This is where Less-than-Container Load (LCL) shipping comes in clutch. LCL shipping allows companies to split space on shipping containers to transport goods cost-efficiently. For SMBs, it streamlines inventory management big time. You get way more flexibility to align supply with demand when you don’t have to fill an entire container every shipment. It takes a lot of the headaches out of keeping inventory at healthy levels while controlling expenses.
What is LCL Shipping?
So what exactly is less-than-container load shipping? Well, as mentioned, LCL allows companies to split space on containers instead of having to fill up a whole container themselves. It’s the opposite of full-container load shipping (FCL) where one business uses an entire container to transport their goods.
Here’s how it works – an LCL shipping company takes shipments from multiple smaller businesses, combines them, and loads them into a shared container heading to the same (or similar) destination(s). This saves everyone money since you only pay for the space your cargo takes up rather than footing the bill for an empty half or three-quarters of a container.
Of course, if you run a high volume import/export business and you have more regular shipment requirements, you may be better off opting for the full container. Yet, the majority of SMBs are unlikely to have such demand – making LCL the preferred option.
How LCL Streamlines Inventory Control for SMBs
Alright, let’s now take a look at some of the main benefits of LCL shipping and how it can help with streamlining inventory control for SMBs.
Reduced Storage Costs
First up, you save big time on storage costs. With LCL, you can order smaller batches more often instead of having to cram every inch of your warehouse with bulk inventory to last months on end. No need to continually shell out for ever more expansive storage rooms and racks when you can receive a steady stream of smaller LCL shipments. That constant influx of inventory means you don’t require nearly as much physical warehouse capacity as you would with sporadic bulk deliveries. All those savings on storage space, utilities, equipment can really start to add up.
Improved Cash Flow
LCL also means you don’t have to tie up as much working capital in unsold goods just gathering dust. All that cash you save from keeping less physical products constantly in stock can now go toward other important business expenses like hiring talent, upgrading equipment, investing in R&D, or expanding production capacity. Better cash flow and financial flexibility gives SMBs way more agility.
Optimized Stock Levels
The flexibility of frequent LCL shipping helps businesses closely tailor inventory quantities to match what customers are actually ordering week to week or month to month. Run out of key stock unexpectedly when demand spikes, and you lose sales – but have overflowing piles of extra product in your warehouse, and you’re bleeding money on unnecessary storage and at risk of them becoming obsolete when preferences change. With well-planned LCL shipments, your inventory levels shift dynamically along with your latest sales data. So you steer clear of both overages and underages while keeping stock nearly perfectly aligned with up-to-date demand in the “just right” zone.
Enhanced Visibility
With frequent, smaller LCL shipments you gain much tighter control over monitoring where your inventory stands at any given moment across your supply chain. Bulk freight often leaves businesses flying blind for weeks while massive containers traverse oceans. But nimble LCL shipping means up-to-the minute data on inventory levels and shipments. That allows businesses to plan smarter, spot potential issues faster, and course correct on the fly as needed.
Even More Ways LCL Helps SMBs
The inventory control advantages are just the tip of the iceberg when it comes to why less-than-container load shipping rocks for small and medium businesses. Let’s explore a few more.
First, it unlocks opportunities globally that would be out of reach otherwise. Finding suppliers or customers internationally can seem daunting. But LCL makes importing and exporting affordable even on a modest budget. Suddenly that wondrous world of overseas partners and markets lies within your grasp.
There are also big risk management upsides. With the flexibility to ship smaller volumes across more shipments, a disruption to any single LCL freight delivery becomes way less of a threat. Limiting financial exposure with every container is smart insurance.
Finally, LCL is actually greener than other shipping methods. By consolidating products from multiple companies together, LCL makes far more efficient use of cargo space instead of half-empty containers crisscrossing the seas solo. If this is important to your customers, you can feel good supporting a model that reflects your values around sustainability.
Getting Started with LCL for Inventory Control
If you think LCL could be a game changer for your inventory management, here are a few pieces of advice to hit the ground running:
Finding the Right Freight Forwarder
The number one priority is partnering up with a top-notch freight forwarder that specializes specifically in LCL shipping. They’ll expertly handle consolidating your goods with other cargo to maximize efficiency and space utilization in containers. An experienced forwarder navigates the ins and outs of international shipping documentation, customs clearance, tracking LCL containers, and keeping supply chains flowing smoothly.
Do your research to find a forwarder with a stellar reputation for customer service and responsiveness. They should offer robust self-service tracking and analytics so you always know the play-by-play of your inventory levels inbound. A strategic forwarder becomes an invaluable asset and ally for wrangling the logistical lifting of LCL shipping.
Getting Transparent on True Costs
When budgeting for LCL, strike up an open and honest dialogue with your forwarder around what cost factors are in play. Be crystal clear about expectations for shipment weights and dimensions, fuel fees, port taxes and tariffs, and any special handling requirements or value added services en route.
Whether your destination port is just the next state over or halfway around the world, costs vary widely. Forecast demand to inform what shipment frequency and container volumes make the most financial sense for your operations. With an accurate picture of total landed costs, LCL procurement becomes much less stressful.
Brushing Up on Regulations and Documents
While your freight forwarder handles much of the heavy paperwork behind the scenes, it pays to brush up on shipment documentation basics and compliance rules around items like customs declarations. Government regulations vary significantly depending on origin and destination countries for LCL cargo, so anticipate any specialized documents needed for your goods.
Nobody wants their inventory to get held up by delays from missing a signature or certification somewhere down the line. A few hours upfront getting up to speed on requirements for your regions and products could save major headaches.
Final Word
If you’re a growing SMB seeking every edge possible in controlling costs and smartly streamlining operations, LCL shipping deserves a long look. The flexibility and simplicity it provides let you focus your energy on nurturing the business rather than wrestling with inventory. Plus it unlocks new levels of resilience and potential for expansion.
For many ambitious companies poised to scale up, LCL proves an invaluable asset. It’s primed to solve many inventory challenges familiar to SMBs in a strategic, forward-thinking way.
