A sudden rainstorm can delay cargo operations at ports, potentially disrupting the entire international trade chain. Within this complex system lies a seemingly minor yet crucial component—terminal handling. The fees generated from these operations are commonly known as THC, or Terminal Handling Charge. But how exactly is this fee structured, and who bears the responsibility for paying it?
I. Core Definition and Scope of THC
THC, fully termed Terminal Handling Charge, represents an indispensable cost in international shipping. Essentially, it's a fee collected by terminal operators or shipping companies to cover the expenses incurred during fundamental container operations at ports. These operations include but are not limited to:
- Unloading: Removing containers from vessels
- Tallying: Verifying cargo quantities and descriptions
- Storage: Temporarily housing containers in port yards
- Loading: Transferring containers onto trucks or trains
It's important to note that THC represents a bundled fee covering only basic terminal operations. Additional expenses such as demurrage charges (for exceeding free storage periods), customs inspection fees, or special cargo securing costs are excluded from THC and require separate payment.
In practice, terminal operators or shipping companies typically collect THC. Since these costs ultimately pass to cargo owners, shipping quotes usually itemize THC separately rather than incorporating it into base freight rates. Shippers must account for this when calculating total transportation expenses.
II. Detailed THC Fee Structure (2025 Reference)
THC calculation primarily depends on container size, with different standards for full container loads (FCL) and less than container loads (LCL). Rates also vary across ports, shipping companies, and trade routes.
1. FCL Pricing Standards
FCL THC fees typically calculate by container type, with common specifications including 20GP, 40GP, and 40HQ. Below are reference rates for major global ports:
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Chinese Main Ports (Shanghai, Shenzhen, Ningbo):
- 20GP: Approximately $85-115 USD
- 40GP/40HQ: Approximately $140-200 USD
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Major Western Ports (Los Angeles, Hamburg, Rotterdam):
- 20GP: Approximately $120-180 USD
- 40GP/40HQ: Approximately $220-280 USD
-
Southeast Asian Ports (Singapore, Port Klang, Laem Chabang):
- 20GP: Approximately $70-100 USD
- 40GP/40HQ: Approximately $130-170 USD
2. LCL Pricing Standards
Unlike FCL shipments, LCL cargo typically doesn't incur separate THC charges. These costs merge into consolidation or deconsolidation fees, distributed according to cargo volume (CBM) or weight (TON). Therefore, LCL shippers don't pay THC independently.
3. Rate Fluctuation Factors
THC rates aren't static and respond to several market variables:
- Peak Seasons: Increased port throughput during high seasons typically elevates THC rates by 10-30%
- Port Congestion: Reduced container turnover from congestion raises operational costs
- Special Containers: Reefers, open-tops, and other non-standard units incur higher handling fees
- Remote Ports: Smaller ports generally charge more than regional hubs
III. THC Responsibility Under Incoterms®
THC liability follows a fundamental principle: "The party arranging transportation for a specific leg bears that leg's THC." Below is the breakdown under common Incoterms®:
1. EXW (Ex Works)
Buyers assume both origin and destination THC under EXW terms. Sellers merely prepare goods at their facilities, while buyers handle all transportation logistics.
2. FOB (Free On Board)
Sellers cover origin THC, buyers pay destination THC. Domestic shipping conventions require sellers to deliver goods to origin ports and complete pre-loading procedures.
3. CFR/CIF (Cost and Freight/Cost, Insurance and Freight)
Similar to FOB, sellers pay origin THC while buyers cover destination THC. These terms require sellers to arrange ocean freight (plus insurance for CIF), making them responsible for origin port handling.
4. DAP/DPU/DDP (Delivered At Place/Delivered at Place Unloaded/Delivered Duty Paid)
These "door-to-door" terms place both origin and destination THC on sellers. Under DDP, sellers additionally cover destination customs duties and clearance fees.
IV. Additional Considerations
Practical implementation requires attention to these details:
- All-In Rates: Some carriers bundle THC into base freight quotes. Shippers must verify inclusions to prevent duplicate payments
- Contract Clarity: Explicitly defining THC responsibility in trade contracts prevents disputes over unexpected charges
As a critical component of international shipping costs, understanding THC's structure, pricing, and liability allocation enables shippers to better manage logistics expenses and prevent trade conflicts. Clear contractual terms remain essential for smooth transactions.