Container vessels are a greater symbol of globalisation and flows of goods than any other means of transport. Even now, sea freight is one of the most frequently used methods of transporting cargo. Despite the longer transit times when compared to airfreight, many customers opt for the lower prices, the very frequent services and the huge amount of space available on container ships. Modern logistics uses the potential provided by sea freight to continually optimise freight services for smaller load quantities – for instance, LCL cargo.
If companies wish to ship goods around the world and rent containers from a logistics specialist for this purpose, it is important to differentiate in line with the size of the shipment. From a cost point of view, so-called full-container-load (FCL) sea freight is the recommended type of transport. This applies if the volume from the starting point to the destination is large enough, or various deliveries must not be mixed under any circumstances.
If there is no need for a complete container and only a partial load is involved, a less-than-container-load (LCL) shipment is the right choice. For LCL shipments, the goods occupy a small part of the space and the ordering party can share the LCL container with other traders. Prices are calculated according to weight or volume, which is why this option is cheaper for the consigning party. An LCL service is therefore the best choice for small and medium-sized enterprises, which regularly ship small quantities over long distances.
The logistics and transport requirements for the various LCL destination countries are very different – and this is also the case with Brazil. According to Statista, the South American country is the 9th largest economy in the world with an annual GDP amounting to approx. US$ 1.3 billion. A foreign trade balance of US$ 48 billion in 2019, according to a report by Germany’s Federal Office of Statistics, illustrates the huge importance of imports and exports for the country’s economy. Mineral fuels and electronic components account for a large proportion of this trade. The country combines some of the most important industrial sectors in South America and has the continent’s largest container freight terminal at the port of Santos. What is certain is that Brazil is becoming increasingly important for export investments, consumer goods and establishing production sites and regional centres. However, there are challenges for importers and service providers – and LCL shipments can complicate matters even more.
Given that Brazil is the fifth-largest country in the world in terms of its surface area, internal distances play a major role in efficiently handling imports and therefore LCL shipments, too. Once a shipment arrives at the seaport of Santos, it takes on average 48 to 72 hours until the container has been unloaded and the partial shipments have been consolidated for onward transportation. Including customs clearance and delivery, customers can therefore expect it to take 7 – 10 days before the goods arrive at the recipient’s site in Brazil.
The freight is then transported to the destination overland – usually by road, which is the most important domestic means of distribution. Although the south and south-east of the country have the best road network in South America, much of the infrastructure is outdated as many roads are not well maintained. In order to still guarantee reliable and punctual deliveries, local freight forwarders ensure coverage spanning most of the country. They use their own standard routes and they connect the most important seaports with industry clusters and business centres – and can therefore offer attractive prices.
Imprecise costs, unstable timetables and low capacity levels can rapidly become a challenge when shipping LCL freight. In order to make full use of the benefits of LCL transportation, exporters to Brazil should therefore consider various aspects when selecting the right service provider. Additional costs for the pick-up and final delivery operations for LCL sea freight should not apply and, if any problems occur, the customer should have a trusted contact partner. The service provider should ensure adequate transparency in the delivery process. As a result, the customer can obtain information about the status of its goods at any time. To ensure that the ordering party can precisely plan its LCL shipment, the freight forwarder should also provide regular and fixed transport times. The storage space on the cargo vessel must also be guaranteed.
In addition to selecting a local agent, which arranges fixed contracts with co-loaders, the issue of customs clearance is particularly relevant for LCL shipments to Brazil. As Brazil is keen to preserve its cultural and natural riches, certain restrictions and prohibitions also apply when importing particular goods, e.g. goods in the agriculture and fisheries sectors, fruit and vegetables and alcohol. There are regulations about labelling items to protect final consumers, too.
Any goods imported as part of an LCL shipment must be registered with the appropriate customs authority. Details of the delivery must be entered on the import declaration (Declaração de Importação), such as the customs tariff number, the type, nature, weight, price and origin of the goods. Language barriers may create problems here. A service provider, which has the relevant expertise and can handle the LCL delivery including end-to-end customs clearance, offers additional protection in such cases.
While Brazil creates numerous challenges for importers, many of them can be resolved by having a good knowledge of the country’s customs legislation and adequate documentation for the goods. Experienced service providers help with clear-cut agreements with partners in the destination country and so reduce port and warehouse costs. They are normally aware of the customs formalities and can quickly respond to spontaneous problems or provide specific answers to customers’ questions. Ordering parties should make sure that they have appropriate labelling and establish relations with local partners in advance.
These contacts guarantee that the final delivery of the cargo will run smoothly. It is worthwhile negotiating or making enquiries about the price, safety and time required for the delivery in advance. Ideally, the freight forwarder itself will provide the pick-up and final runs. Insurance and measures to monitor the goods are advisable in any case and offer protection against losses. Overall, it is important for customers to be aware of the different import requirements in their destination country and rely on a service provider which completely handles the LCL delivery – including the local regulations relating to customs procedures and warehouse costs.
The logistics specialist Rhenus offers LCL services with end-to-end supply chains and optimised transit times at competitive prices. When shipping imports to Brazil, the Transportation Management System (TMS) software called Fênix allows customers to have a complete overview of what is happening and the opportunity of tracking their freight during the complete delivery process.
Find out all you need to know about LCL in Brazil with our checklist!
Further information about LCL with Rhenus can be found here.
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For this article there is 1 comment
22/04/2021 - 12:27
A very interesting article and video!