FCL, LCL, CY and CFS

FCL, LCL, CY and CFS

FCL	Full Container Load full carload
LCL	Loose Container Load loose carload
CY	Container Yard
CFS	Container Freight Station

FCL versus LCL

The word carload relates to the rail car. The FCL and LCL are differentiated, in practice, on whether the ‘whole container’ or ‘not the whole container’ is intended for the consignee.

The FCL means the load reaches its allowable maximum (or full) weight or measurement. In practice, however, the FCL in the ocean freight does not always mean packing a container to its full payload or full capacity. For example, an exporter books a 20′ container that is intended for a consignee at FCL flat rate of US$1,500. If the consignment occupies 500 cu. ft. and weighs 5,000 kgs. Only, the case is still FCL and the exporter has to pay US$1,500.

If an exporter intends to pack a container to the full capacity or full payload with the consignments of two or more consignees for the same destination, the case is LCL and the carrier will charge the LCL freight rate on each consignment. In the LCL arrangement, the shipper is required to deliver the cargo to the carrier’s container freight station for containerization, thus there is no guarantee that the two or more consignments from the same exporter will share the same container. In some cases, the exporter is allowed to pack the container at their premises in the LCL arrangement, and then the carrier uses that same container to pack in more cargo from other shipper(s) to make a full container load at the container freight station.

CY versus CFS

The CY and CFS apply to the manner and the location of the cargo delivery and receipt in a container service. The CY is the delivery (or receipt) of a whole container from (or at) the shipper’s or the forwarder’s (or the consignee’s) cargo yard or premises. The CFS is the delivery (or receipt) of loose cargo from (or at) the carrier’s container freight station.

The container freight station (CFS) is operated by the carrier for the receipt, forwarding, and assembling or disassembling of cargo.

Normally, the container freight station is a customs clearance center.

The CFS service may be necessary under any of the following circumstances:

• The kind of cargo and quantity of order does not warrant the use of the whole container.
• The shipper’s or the consignee’s premises are inaccessible by container due to poor road conditions (e.g. narrow road) and location (e.g. remote area not served by container).
• The overall load of vehicle exceeds the legal limitation.
• The shipper or the consignee lacks the necessary container loading or unloading equipment.

Modes of CY and CFS Container Services

CY/CY Container Service

The CY/CY (read as ‘CY to CY’) container service—door-to-door container service or house-to-house container service—broadly means that the whole container received by the carrier is packed at the shipper’s or the forwarder’s premises, and the delivery of that same whole container to the consignee’s premises.

In a related term door-to-door service, which is often used in the cargo forwarding and may involve the LCL, refers to a type of freight service available from a forwarder whereby the cargo is picked up at the consignor’s premises and delivered to the consignee’s premises.

CY/CFS Container Service

The CY/CFS (read as ‘CY to CFS’) container service—door-to-port container service—broadly means that the whole container received by the carrier is packed at the shipper’s or the forwarder’s premises, and that same whole container is emptied at the carrier’s container freight station at the port of destination. The consignee arranges the delivery of the loose cargo from the container freight station to his/her premises.

CFS/CY Container Service

The CFS/CY (read as ‘CFS to CY’) container service—port-to-door container service— broadly means that the delivery of the loose cargo to the carrier’s container freight station at the port of origin is packed into the whole container, and the delivery of that same whole container to the consignee’s premises.

CFS/CFS Container Service

The CFS/CFS (read as ‘CFS to CFS’) container service—port-to-port container service or pier-to-pier container service—broadly means that the delivery of the loose cargo to the carrier’s container freight station at the port of origin is packed into the whole container, and that same whole container is emptied at the carrier’s container freight station at the port of destination. The consignee arranges the delivery of the loose cargo from the container freight station to his/her premises.

ADD, CVD, SGD

Anti Dumping Duty –

Penalty imposed upon suspiciously low-priced imports, to increase their price in the importing country and so protect local industry from unfair competition. Anti-dumping duties are assessed generally in an amount equal to the difference between the importing country’s FOB price of the goods and (at the time of their importation) the market value of similar goods in the exporting country or other countries.

Dumping is said to occur when the goods are exported by a country to another country at a price lower than its normal value. This is an unfair trade practice which can have a distortive effect on international trade. Anti dumping is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect. Thus, the purpose of anti dumping duty is to rectify the trade distortive effect of dumping and re-establish fair trade. The use of anti dumping measure as an instrument of fair competition is permitted by the WTO. In fact, anti dumping is an instrument for ensuring fair trade and is not a measure of protection per se for the domestic industry. It provides relief to the domestic industry against the injury caused by dumping.

Often, dumping is mistaken and simplified to mean cheap or low priced imports. However, it is a misunderstanding of the term. On the other hand, dumping, in its legal sense, means export of goods by a country to another country at a price lower than its normal value. Thus, dumping implies low priced imports only in the relative sense (relative to the normal value), and not in absolute sense.

Import of cheap products through illegal trade channels like smuggling do not fall within the purview of anti-dumping measures.

Countervailing Duty –

Additional import duty imposed to offset the effect of concessions and subsidies granted by an exporting country to its exporters. Imposition of a countervailing duty is an attempt to bring the imported price to its true market price, and thus provides a level playing field to the importing country’s producers.

Safeguard Duty –

Any article is imported into the country in such increased quantities and under such conditions so as to cause or threatening to cause serious injury to domestic industry, then it may by notification impose a safeguard duty on that article.

A safeguard is a form of temporary relief. They are used when imports of a particular product, as a result of tariff concessions or other WTO obligations undertaken by the importing country, increase unexpectedly to a point that they cause or threaten to cause serious injury to domestic producers of “like or directly competitive products”. Safeguards give domestic producers a period of grace to become more competitive vis-à-vis imports.

If this happens, the government of the importing country may suspend the concession or obligation, but will be expected to provide compensation by offering some other concession. Otherwise, the affected WTO member(s) can retaliate by withdrawing equivalent concessions. Industries or companies often request safeguard action by their governments.

Safeguards usually take the form of increased duties to higher than bound rate or standard rates or quantitative restrictions on imports.