Have you ever encountered unexpected fees like "devanning charges" or "distribution charges" after your goods arrived at the destination port, despite having already paid ocean freight? These additional costs often catch importers by surprise in Less than Container Load (LCL) shipping. This article examines these common but frequently overlooked expenses to help businesses better understand and manage their shipping costs.
Devanning Charge: The "Last Mile" of Container Shipping
Devanning charge (also called unstuffing charge) refers to the cost of removing multiple LCL shipments from a shared container when it arrives at the destination port's yard or warehouse. This process involves several essential services:
- Container opening: Professional workers open the container to prepare for cargo removal.
- Cargo transfer: Goods are carefully moved from the container to designated warehouse areas.
- Empty container return: The emptied container is returned to the yard for reuse.
These operations require significant labor, equipment, and space resources. Notably, devanning fees are typically charged per container (e.g., 20ft or 40ft) rather than per shipment. This means all LCL shipments sharing a container split this fixed cost.
Distribution Charge: The "Fine Management" of Cargo Sorting
Distribution charge (or handling charge) covers the sorting and management of multiple shipments after devanning. This includes:
- Categorizing and counting goods
- Verifying bill of lading information
- Labeling and grouping shipments by consignee
- Short-term storage before pickup
- Coordinating with consignees for collection
Unlike devanning fees, distribution charges are usually assessed per shipment, representing compensation for the warehouse's sorting services.
Responsibility for Charges: Determined by Trade Terms
The allocation of these costs depends on the agreed trade terms in the contract:
FOB (Free On Board): The consignee (buyer) bears all destination port charges, including devanning and distribution fees. The seller only covers costs until the goods are loaded on the vessel.
CIF/CFR (Cost, Insurance & Freight / Cost and Freight): While the seller pays ocean freight, local destination charges typically remain the buyer's responsibility unless specifically included in the quoted price.
Special Arrangements: Parties may negotiate alternative payment structures, such as having the shipper cover all costs (which would then be reflected in the goods' price). Such agreements require clear communication to prevent misunderstandings.
Understanding these common LCL shipping charges helps businesses avoid unexpected costs and disputes. When drafting trade contracts, clearly specify the applicable terms and account for these often-overlooked expenses. Professional logistics advice can further ensure smooth international transactions.