What is CFS? Differences from CY and its Relationship with LCL [Logistics Terminology]

What is CFS ?

CFS stands for Container Freight Station. It is a facility used to consolidate Less than Container Load (LCL) shipments from multiple shippers who do not have enough cargo to fill a full container. A CFS serves as a hub for receiving, collecting, storing, and organizing LCL cargo for import and export.

Typically located near container ports, a CFS has two primary roles: consolidating goods from various shippers into a single container or stripping a container and sorting the goods for individual consignees. Specifically, CFS activities include stuffing (loading into export containers) and de-vanning (unloading from import containers).

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The differences between CFS and CY

CFS (Container Freight Station) and CY (Container Yard) are both facilities related to container logistics, but their roles and functions are distinctly different.

CY is a facility used for the collection and storage of Full Container Load (FCL) cargo. It is the site for managing and safeguarding containers, serving as a location for loading, unloading, and temporary container storage.

A CY is typically located within or near seaports and container terminals. Loaded containers are temporarily stored here awaiting vessel loading, or containers discharged from a vessel are held before being transported inland by road.

While a CFS primarily handles the stuffing, stripping, and sorting of goods, a CY focuses on the storage and management of the containers themselves.

Cargo delivery and receipt process

To consolidate shipments from multiple shippers who do not have enough cargo for a full container, the goods are handled as LCL (Less than Container Load), as discussed below. When entrusting cargo to a freight forwarder, co-loader, or master consolidator, the delivery and receipt process is as follows:

Export Process:

1. The shipper books with a freight forwarder, co-loader, or master consolidator.
2. Once the booking is confirmed, the forwarder, co-loader, or master consolidator informs the shipper of the designated CFS for delivery.
3. The shipper transports the goods to the designated CFS using their own vehicles or third-party trucking services.
4. At the CFS, the shipper’s goods undergo export customs clearance.
5. The CFS proceeds with stuffing (loading into containers) for the cargo that has been granted export clearance.
6. After stuffing is complete, the loaded container is transported to the CY.
7. The CY operator proceeds to load the container onto the vessel.

Import Process:

In the import phase, the role of the CFS is the reverse of the export process. Goods in the container are stripped and sorted for each individual consignee.

1. When the container ship arrives at the port, the CY operator discharges the containers to the CY.
2. Stevedoring companies transport the containers from the CY to the CFS.
3. At the CFS, the goods are de-vanned from the container upon arrival.
4. The goods are sorted by consignee, and import procedures are processed through the NACCS (Nippon Automated Cargo and Port Consolidated System).
5. The freight forwarder transitions from a “preliminary declaration” to a “formal declaration” to obtain import clearance.
6. Once import clearance is granted, the goods are loaded onto delivery trucks and transported to various destinations.

The differences between CFS, LCL, and FCL

CFS is a term frequently used in trade, but the term “LCL” is also widely utilized. These two terms are closely related, often leading to the misconception that they share the same meaning; however, it is important to distinguish between them.

LCL stands for Less than Container Load. LCL shipments are brought to a CFS, where they are consolidated with other cargo bound for the same destination, stuffed into a container, and shipped. At the destination, the goods are once again stripped (unloaded) from the container at a CFS or depot before being delivered to the consignee.

In contrast to LCL is FCL (Full Container Load), which refers to cargo that occupies an entire container. FCL freight rates are calculated per container unit, whereas LCL rates are based on whichever is greater: weight or volume (Revenue Ton).

The choice between LCL and FCL depends on the shipping method, cargo volume, and the nature of the goods. For items requiring delicate handling, such as specialized equipment, FCL is often preferred to secure the entire container for a single shipment.

Advantages and disadvantages of LCL

Advantages

Lower freight costs based on cargo volume (primarily for small quantities), allowing for significant cost savings when shipping less-than-container loads.

Disadvantages

LCL is based on the principle of stacking cargo within a container. Depending on the shipper’s requirements, packaging conditions, and the shape of the goods, stacking may not be feasible, which can lead to additional surcharges.

Furthermore, during container transit, there is a risk of cargo damage due to collisions with other shipments. Upon arrival, in certain countries or ports where CFS facilities may be underdeveloped, there is an increased risk of damage or loss during the sorting process.

Moreover, cargo handling quality can fluctuate. For instance, following long local holidays, cargo backlogs often occur at the CFS. During such peak periods, handling may become negligent, further increasing the risk of damage.

For LCL shipments, items exceeding 3 meters in length, 2.2 meters in height, or 2 tons in weight are typically subject to additional surcharges.

Advantages and disadvantages of FCL

Advantages

FCL does not require the consolidation or sorting of goods from multiple shippers; therefore, customs import declarations can be completed faster, and the lead time is shorter compared to LCL. Additionally, the cargo remains inside the container throughout the entire transit process, minimizing the risk of damage.

Disadvantages

FCL requires a relatively large volume of cargo, if the volume is insufficient, the cost per unit will be higher. Additionally, after customs clearance, the entire container is transported to the designated warehouse using a specialized truck, a process known as “drayage.” Drayage costs typically include a round-trip charge for the transport from the port to the designated location and back.

Cost Comparison: LCL vs FCL

LCL freight rates are calculated based on whichever is greater: volume or weight (Revenue Ton). Even the smallest shipments are subject to a minimum charge of 1 CBM or 1 ton. Consequently, compact metal goods may be charged by weight, while furniture is typically charged by volume.

FCL freight, on the other hand, is charged per container unit. However, FCL incurs additional specialized trucking costs for container transport (drayage).

The decision to use LCL or not should be carefully evaluated based on cargo volume and the “CFS charge” at the destination port. The CFS charge covers unloading and related handling expenses for LCL shipments. Since these rates vary depending on the freight forwarder’s price list, in many cases, shipping via FCL can actually be more cost-effective.

Commonly used terms at container ports

Below are some commonly used terms at the CY (Container Yard):

Gate

The entry and exit point of a container terminal. This is the official point where transport responsibility is transferred between the shipper and the shipping line. It is also where the necessary documentation is exchanged and processed whenever a container is moved into or out of the port.

Empty Container

Refers to a container with no cargo inside, either before loading or after unloading. In industry terms, it is commonly referred to as a “container shell” or simply an “empty.”

Gantry Crane

A massive crane used for loading and unloading containers onto and off of vessels. It is also commonly referred to as a Ship-to-Shore (STS) crane.

Straddle Carrier

A piece of equipment that transports containers by “straddling” them between its wheels. It is used to move containers within the CY (Container Yard) and to load containers onto trailers or prime movers.

Berth

The designated location along a quay or pier where a container vessel moors (anchors) for loading and unloading operations.

Marshalling Yard

A temporary storage area where containers are held while awaiting loading onto a vessel or after being discharged.

Apron

The area located between the quay (berth) and the storage yard, where gantry cranes perform the loading and unloading of containers.

ECD – Empty Container Depot

A facility dedicated to the storage and maintenance of empty containers.

Chassis

The underframe of a truck used to carry containers. It also refers to a specialized trailer designed specifically for container transportation.

Drayage

The transport of containers over short distances by a tractor unit (prime mover). In logistics, this specifically refers to the movement of containers between a port, rail ramp, or depot and a designated warehouse.

EIR – Equipment Interchange Receipt

A document that confirms the condition of a container when it is transferred between the shipper (or carrier) and the terminal operator. It serves as an official receipt whenever a container enters (Gate-in) or leaves (Gate-out) the port.

Warehouse

A covered area used for the loading, unloading, and temporary storage of cargo.

Summary

A Container Freight Station (CFS) is a facility where small shipments from multiple shippers are consolidated, stored, and loaded into containers. It serves as a key hub for the delivery and receipt of import-export cargo. Core operations at a CFS include “stuffing” (loading cargo into containers) and “stripping” (unloading cargo from containers).

On the other hand, a Container Yard (CY) handles Full Container Load (FCL) shipments and is responsible for the storage and management of containers. While a CFS primarily focuses on the packing and sorting of LCL (Less than Container Load) cargo, a CY focuses on container security and inventory management. Understanding the distinction between a CFS and a CY is essential for selecting the most appropriate shipping method.

When exporting small quantities, LCL is generally more cost-effective; however, in some instances, FCL can be cheaper even for partial loads. It is important to note that additional surcharges may apply depending on the shape and characteristics of the goods. If you are undecided between FCL and LCL based on volume, you should factor in the “CFS charge” to make an informed decision.

Furthermore, when choosing a shipping method, beyond the CFS charges in the importing country, you should also consider the total cargo volume, the required level of protection against damage, and the overall lead time.

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