Imagine preparing to export a shipment of goods, having negotiated what seemed like a fair freight rate, only to discover an array of mysterious charges on your final bill - THC, ORC, BAF, and more. Suddenly, you feel like you're being taken advantage of. Don't panic! Ocean freight surcharges are like the hidden part of an iceberg - numerous and varied. Today, we'll thoroughly "clear the minefield" by exposing these common surcharges, ensuring transparent spending and putting an end to confusing shipping bills.
Ocean freight surcharges are essentially fees charged by shipping lines or ports to cover additional operational costs. These costs may stem from fluctuating fuel prices, currency exchange rate variations, or standard port operational expenses. Understanding these fees not only helps you better comprehend quotations but also effectively avoids unnecessary expenditures.
I. Origin Port Local Surcharges (Exporters Must Read - Critical!)
These fees primarily occur at the port of origin and are the most frequently encountered by exporters.
1. THC (Terminal Handling Charge)
Definition: Consider this the "toll fee" for cargo moving in and out of ports. It covers various terminal operations including container loading/unloading, storage, gate processing, and lifting - essentially the "cost of moving boxes."
Applicability: Nearly all global shipping routes, unavoidable for both full container load (FCL) and less than container load (LCL).
Billing Method: Typically fixed charges based on container type (20GP/40GP/40HQ). For LCL, charges are based on cargo volume (CBM) or per shipment.
Note: Origin THC differs completely from destination THC (DTHC). Some freight forwarders may intentionally blur this distinction to overcharge.
2. ORC (Original Receiving Charge)
Definition: Despite its name, this is essentially identical to THC - both are terminal handling fees. ORC is simply the term commonly used in Southern China (Shenzhen/Guangzhou/Hong Kong), while THC is more universal elsewhere.
Applicability: Primarily for exports from Southern Chinese ports (Shenzhen Yantian/Shekou, Guangzhou Nansha, Hong Kong), especially on US and Europe routes.
Billing Method: Fixed charges by container type. Importantly, THC and ORC are never charged simultaneously - it's always one or the other.
3. DOC (Document Fee)
Definition: Administrative costs for processing bills of lading, manifests, customs documents, etc. This mandatory charge covers "paperwork costs."
Applicability: All shipping routes, both FCL and LCL.
Billing Method: Per shipment basis. FCL typically costs $45–75/shipment, while LCL ranges $25–45/shipment.
Note: Bill of lading amendments incur separate amendment fees, which are typically expensive. Always verify information before submission.
4. SEAL (Seal Fee)
Definition: Covers the cost of container seals provided by shipping lines. These unique seals serve as crucial customs documentation and cargo security identifiers.
Applicability: All routes, primarily for FCL (usually included in THC for LCL).
Billing Method: Per container, typically $5–12/container.
Note: Lost seals require repurchase at additional cost. Always safeguard seals after loading.
5. EIR (Equipment Interchange Receipt Fee)
Definition: Charged when truckers pick up or return containers, covering the cost of issuing equipment interchange receipts that document container conditions.
Applicability: Primarily for FCL exports; LCL typically doesn't apply.
Billing Method: Per container, usually $3–8/container.
II. Fuel & Currency Surcharges (Market-Dependent - Most Volatile!)
These fees fluctuate significantly with international oil prices and exchange rates, requiring special attention.
1. BAF (Bunker Adjustment Factor)
Definition: Compensates shipping lines for fuel cost fluctuations. The most volatile and troublesome surcharge.
Applicability: All deep-sea routes (US, Europe, Middle East); occasionally on short-sea routes (Southeast Asia).
Billing Method: Either by container type or per revenue ton. During peak seasons or high oil prices, BAF may constitute 20%-30% of total freight.
Note: Always confirm whether BAF is included in "All-in" rates. If not, request specific amounts to avoid disputes.
2. CAF (Currency Adjustment Factor)
Definition: Compensates for exchange rate fluctuations (e.g., USD/RMB, EUR/USD), protecting against currency devaluation.
Applicability: Primarily deep-sea routes; less common on short-sea routes.
Billing Method: Either percentage of freight (5%-15%) or fixed amounts by container type.
Note: Some carriers use "Currency Adjustment Fee" - same concept under different names.
3. EBS (Emergency Bunker Surcharge)
Definition: Short-term, emergency fuel surcharge implemented during sudden oil price spikes or route congestion - more "urgent" than BAF.
Applicability: Common on popular routes (US, Europe, Southeast Asia), especially during peak seasons (September-November).
Billing Method: Fixed amounts by container type ($100-300/container). Typically not included in All-in rates.
Note: EBS and BAF may be charged simultaneously! Always confirm EBS inclusion.
4. IFA (Interim Fuel Adjustment)
Definition: Similar to EBS - another short-term fuel subsidy under a different name. Application and billing mirror EBS.
III. Peak Season/Special Surcharges
1. PSS (Peak Season Surcharge)
Definition: Implemented during peak seasons when space is tight, increasing carrier revenue.
Applicability: Popular routes (US, Europe), typically September-November annually.
Billing Method: Per container, amounts vary by market conditions.
2. GRRI (General Rate Restoration Increase)
Definition: Across-the-board rate increases implemented by carriers to raise overall price levels.
Applicability: Nearly all routes.
Billing Method: Per container, with variable increase amounts.
IV. Destination Port Surcharges (Importers' Focus)
1. DTHC (Destination Terminal Handling Charge)
Definition: Similar to origin THC - covers destination port container handling operations.
Applicability: All routes.
Billing Method: By container type.
2. Demurrage
Definition: Charged when cargo exceeds free storage periods at destination ports.
Applicability: All routes.
Billing Method: Daily charges with increasing rates.
3. Detention
Definition: Charged when containers exceed free usage periods after arrival.
Applicability: All routes.
Billing Method: Daily charges with increasing rates.
Conclusion
While ocean freight surcharges are numerous and complex, understanding their underlying logic and meanings empowers shippers to avoid unreasonable charges. When communicating with freight forwarders, always inquire about specific amounts and inclusions for each fee to prevent disputes. This comprehensive guide aims to help navigate ocean shipping with greater confidence and clarity.