Terminal Handling Charges is an essential part of the shipping process and it can’t be ignored. Read on to get an overview of the different types of terminal handling charges and how you can minimize your container costs.
The shipping industry is a lucrative business but at the same time an expensive one too. Being an integral part of the shipping industry, you might have come across the term Terminal Handling Charges (THC) many times. But what exactly does it mean?
Do you sometimes wonder, why you pay this additional cost when you’re already shelling out on other charges? And if it’s really that important? Well, if you usually find yourself asking these questions, you’re at the right place. In this article, we’ll help you simplify this term and help you understand its importance.
Table of Contents
What are Terminal Handling Charges?
Terminal Handling Charges are fees collected from terminal authorities at different ports for the services they provide. These services can range from equipment handling, positioning, maintenance and storage to discharging of containers.
Local charges of a terminal highly affect the THC, thus, the cost may vary from port to port of each country.
To break it down, Terminal Handling Charges are an essential cost incurred while shipping your goods from point A to point B. There are many factors that impact these charges at different ports, starting from port of origin to destination port.
Terminal Handling Charges are some of the container charges you just can’t get around. However, there are some you can minimize or even avoid. Get the full overview of various charges in our separate blog – and see which ones you can sidestep.
What does Terminal Handling Charges include?
In the early days of the shipping industry, most port operations were manual intensive. Loading/unloading of cargoes, berthing/unberthing of ships and handling equipment such as cranes were a labor-intensive process. However, advancement of technology changed this phase. Ports now have tech-rich equipment, this means that most tasks are automatic.
Ports began to use different terminals to handle cargoes of various kinds. Each of these terminals used a separate equipment that handled a task with efficiency and safety. This was when ports started charging terminal handling charges to the shipping line.
Now, as we’ve mentioned earlier, terminal handling charges are the services they provide and additionally includes all the local charges of the terminal.
Therefore, the cost of handling varies from port to port for each country. It also depends on the total cost of port handling at each location.
For example, the Terminal Handling Charges charged at the port of Shanghai, China is different from that of Hamburg in Germany or even in Singapore.
It is also important to understand that different types of containers attract different Terminal Handling Charges because of its different handling process. We will get into more details on this in a bit .
Who charges them?
Terminal Handling Charges are payable at the port of origin (OTHC), trans-shipment port and at the destination port (DTHC).
Terminal authorities charge this fee to shipping companies who then send the cost to the shipper or seller. The shipping line usually does this while releasing the Bill of Lading after the final customs clearance procedure. The carrier usually pays the Terminal Handling Charges at the trans-shipment port as it includes in their ocean freight cost.
Now that we have an understanding of who charges this fee, it’s also important to understand why terminals charge this fee. And where they’re using this money!
It’s simple, freight terminals are now highly tech-rich. To keep these terminals up and running, regular servicing and maintenance of these tech-intensive assets is essential. Moreover, employees have to be paid their salaries and ports need to pay taxes and surcharges. Additionally, as the shipping market grows, there is always room for ports to expand and that requires investment and capital.
How much does Terminal Handling Charges cost and who pays for it?
Terminal Handling Charges are also called Container Service Charge (CSC). These charges hugely depend on local charges of a terminal and thus, can vary from port to port of each country and also within terminals of the same port. It also depends on the total cost of port handling at each location.
THC cover a wide range of services. A few of them include:
- Equipment maintenance
- Monitoring of goods
- Unloading of containers at the destination terminal
- Loading containers in the consignee’s vehicle
Each terminal has a specialized technology to handle the operations and thus cost may vary too.
The buyer and seller (shipper) already have an agreement/contract on the THC at the Origin and Destination ports. The shipping company moving the containers charges these to either of the parties (as per the contract). Depending on the agreement, the seller or buyer pays the THC.
While THC are charges that are important for a smooth functioning of a terminal or a port equipped with technology. It is also important because these charges help port workers get their salary. While Terminal Handling Charges are important and can’t be avoided, xChange can help you reduce other port charges.
Want to know how? Click the banner below to schedule a quick demo with our team of experts.
Understanding Terminal Handling Charges with examples
Let’s look at a few examples to understand Terminal Handling Charges better.
(Note: In the following examples, the company names portrayed are false)
THC charged to ABC Pharmaceutical company
For example, ABC Pharmaceuticals in Cape Town, South Africa has a contract to supply 2X20’ container loads of insulin to XYZ Imports of Doha, Qatar.
ABC Pharmaceuticals transports these containers to the port of Cape Town for shipment by container carrier Evergreen Line.
Upon arrival at the port, the containers are lifted by the port cranes and stacked ready for dispatch. The transport requires reefer containers because of the nature of the cargo. These reefers need regular monitoring by port technicians. They make sure that the desired temperature is maintained and the genset is working fine till it’s ready for loading onboard Evergreen Line.
Here, following are the terminal handling charges charged to the vessel operator:
- Cost of unloading of cargo from the trucks of ABC Pharmaceuticals
- Storage at the Port premises
- Monitoring of the reefer containers
- Subsequent loading onboard the vessel by the Port authority
Upon arrival at Port Doha, the reefer containers are offloaded from the vessel and stacked for collection by XYZ Imports. During storage, the reefers are monitored regularly for their efficient functioning by technicians of the port.
When the trucks of XYZ Imports come for collection, they are loaded on the trucks by crane or a heavy-duty forklift. The cost is recovered by way of terminal handling charges by the Doha Port authorities.
THC on transporting cosmetic goods
Company A in Shanghai gets a contract to ship 3×20’ container load of makeup items to ABC Cosmetics Imports of Singapore. Company A transports these containers to the port of Shanghai for shipment. Once arrived at the port, the port authorities use cranes or heavy-duty forklifts and stack them – making them ready for dispatch. At the port, these containers need to be stored and monitored until it’s time to load them in a said shipping line. Here, Terminal Handling Charges include unloading of cargoes from the trucks of Company A, using port services like cranes to stack them in place, monitoring and loading them on the vessel.
This cycle continues, when the shipment arrives at the Port of Singapore. Once arrived at the destination port, these containers are unloaded from the vessel and stacked back for collection by ABC Cosmetics Imports.
The total container cost when shipping
The way a carrier charges Terminal Handling Charges depends on the route of shipping. Depending on this, a carrier either chooses to include or exclude THC in the freight. Usually, the total container cost can add up consisting of the following surcharges:
- Local charges at the origin port
- Origin Terminal Handling Charges (OTHC)
- Sea/ocean freight charges
- Destination Terminal Handling Charges (DTHC)
- Local charges at the destination port
A full load of 40ft container shipping spare parts from Shanghai or Hamburg can add up the following cost at origin and destination ports.
- Export customs clearance (Origin Port)
- Booking fee
- Origin Terminal Handling Charge (OTHC)
- Pick-up charge
- Verified Gross Mass (VGM)
- Electronic Data Exchange (EDI)
- Handling Fee
- Destination Terminal Handling Charge (DTHC)
- BL release fee
- Equipment inspection fee
- Import handling
- International Ship and Port Security (ISPSWhat is international ship and port facility security code? The International Ship and Port Facility Security (ISPS) Code establishes essential security requirements for ships, ports, terminals, carri...)
THC are crucial surcharges and can impact heavily on the overall line of shipment transaction.
Types of Terminal Handling Charges
Terminal Handling Charges are present at Origin, Trans-shipment and Destination ports.The seller or buyer pay the Origin THC (OTHC) and Destination THC (DTHC).These two parties already have a contract signed as to who will pay which charges.
The carrier usually pays the Trans-shipment THC as it includes in their ocean freight rate.
Here, it’s also important to understand that different containers and cargo types have different Terminal Handling Charges. This is mainly because of the different methods of handling. For example, special equipment or cargo such as a reefer container, hazardous liquid or Out of Gauge (OOG) cargoes will have Terminal Handling Charges. This is because the handling charges of such cargoes and containers are different from normal dry containers.
Hazardous liquids require special attention for the safe storage and monitoring of the cargo and thus attract more cost. Similarly, OOG cargoes may require the use of heavy-duty forklifts or slings due to its over dimensional nature. Reefers, on the other hand, need constant monitoring of the genset to ensure consistent temperature flow to the cargo. The Terminal Handling Charges here reflect different than say an OOG or a Hazardous cargo.
Origin Terminal Handling Charge (OTHC)
Origin Terminal Handling Charges are paid for port services before a vessel departs the origin port. OTHC charges are collected by the terminal operator in regards to container movements from the seller’s truck to the vessel.
Destination Terminal Handling Charge (DTHC)
DTHC are collected at the port of arrival. This includes loading or unloading of containers and other charges such as storage, monitoring and other port facilities.
THC also called “Liner Out Charge”
The term Liner Out Charge is common on the West African trade lane. It’s a relatively new term and is stated under the a under the Asia-West Africa Trade Agreement (AWATA). The AWATA members include China Shipping Container Lines (CSCL), CMA CGM, Delmas, Gold Star Line, Maersk/Safmarne, Mediterranean Shipping Company (MSC), MOL, and Pacific International Lines (PIL). This is to make the freight structure more transparent. In some countries in West Africa the Terminal Handling Charges is shown as Liner Out Charge.
Avoiding container charges
Terminal Handling Charges are one of those shipping charges that can’t be avoided. And as we have read, these are important as well, especially for ports to have their terminals up and running. Therefore, it makes sense if you are aware of these charges and how much you are shelling out so you can instead save on charges that can be minimized or avoided. For example, demurrage and detention charges are expensive but can be avoided with SOC containers. Container xChange gives you the liberty to find your own SOC container and gain overall flexibility. At xChange, you will find more than 800 certified partners across 2,500 locations for one-way moves. And be sure to get your money on time. All you have to do is type in your pick-up and drop-off location. You’ll get a list of results with the best deals and possible new partners and available equipment.
Terminal Handling Charges is an essential part of the shipping process.Terminal authorities collect these charges at different ports for the services they provide. From equipment handling, maintenance and storage to discharging of containers, ports provide a range of services.
These charges are influenced by local charges of the terminal. Thus, the cost varies from port to port of each country. THC can also vary depending on the container type and the cargo that’s been shipped. This is mainly because each of these container types require a specific kind of handling at the port.
With the development of technology, every terminal now has special machines to handle specific cargo. This ensures safe and efficient functioning of ports. And to keep these functional and also pay wages to the worker at the ports, collecting THC is important.
THC can’t be avoided but there are some charges that you can certainly avoid or at least minimize. So, why not save some money when you can. Get overview here.
Terminal handling charges FAQs
What are terminal handling charges?
Terminal Handling Charges (THC) are also called Container Service Charges (CSC). These are charges collected by port authorities from the shipping lines for the services they provide at ports. These services can be from storage, positioning, stacking or even using equipment such as cranes, etc. THC is collected at the origin port as well as the trans-shipment and destination ports.
Who pays terminal handling charges?
THC is paid by the shipper or the consigneeWhat is a consignee? When transporting freight (by ocean, air, or land), there are two parties involved — one who is shipping and the other who is receiving the freight. The recipient of the goods b... (depending on the agreed contract between the two parties. The trans-shipment THC is usually paid by the shipping line (carrier) as it includes in their ocean freight rate.
How can you calculate terminal handling charges?
Terminal Handling Charges are changed as per containers and the services a terminal is providing. This includes equipment maintenance, equipment use, and stevedoring. The wharfageWhat is Wharfage? A wharf is a man-made, fixed structure where the vessels can dock for safe loading and unloading of cargo. Wharfage refers to the fee for using the wharf (also called quay) to store ... charge is calculated by weight or volume that’s loaded or unloaded at the terminal in units of tons, cubic meters, etc.
[custom-related-posts title=”Related Posts” none_text=”None found” order_by=”title” order=”ASC”]
What are Terminal Handling Charges? Get full guide here 
Know everything about different Terminal Handling Charges. Why they’re important and vary from port to port from country to country.
Terminal Handling Charges are fees collected from terminal authorities at different ports for the services they provide. These services can range from equipment handling, positioning, maintenance and storage to discharging of containers.Do you have to pay to use a port? ›
Port charges are the fees that shipping operators and their customers pay to port authorities for the use of the port's facilities and services. Port charges can be a significant component (up to several percent) of the final price of consumer goods.What are the types of port charges? ›
Port Charges means — (a)port dues and wharfage charges; or (b)port improvement rates, Levied under regulations made under section 99 for the purposes of section 48, and includes charges for pilotage and other services provided under Part 2 of the Ports (Functions) Act 1993; ”.What is a handling cost example? ›
Calculating Handling When You Have Employees
[Average number of minutes worked to package an item / 60] x hourly rate. For example, 15 minutes / 60 = 0.25; 0.25 x $10 per hour = $2.50. Those are your handling costs.
Origin THC (OTHC) and Destination THC (DTHC) are paid by the client (seller or buyer) depending on their terms of sale, either directly to the port or to the carrier depending on the port of origin/destination.How long can a port stay in you? ›
Ports can remain in place for weeks, months, or years. Your team can use a port to: Reduce the number of needle sticks. Give treatments that last longer than 1 day.How do I use a port for free? ›
Using fuser to Free up the Port
We can use fuser to show information and to kill the process using the port. This way, when the process finishes, the port will be free to be used. There are more parameters we can use: -i: fuser asks us for confirmation before killing the process.
Charges are incurred for all ships entering the port and accumulate relative to the duration of time spent in port. The charges cover such things as piloting and navigation, loaders, conveyors and hydraulic lift equipment as well as docking, terminal and storage costs.What is a port few examples? ›
Port numbers consist of 16-bit numbers. For example, a user request for a file transfer from a client, or local host, to a remote server on the internet uses File Transfer Protocol (FTP) for the transaction. Both devices must be configured to transfer files via FTP.What are the 3 types of port? ›
There are different types of ports available: Serial port. Parallel port. USB port.
- Well-known ports. The well known ports are those from 0 - 1,023. ...
- Registered ports. The registered ports are those from 1,024 - 49,151. ...
- Dynamic and/or private ports. The dynamic and/or private ports are those from 49,152 - 65,535.
Fixed costs tend to be costs that are based on time rather than the quantity produced or sold by your business. Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments. Some kinds of taxes, like business licenses, are also fixed costs.When should I charge my handling fees? ›
A handling fee is an additional charge explicitly added at checkout on top of the product price, taxes, and shipping costs. You can charge a handling fee if you want to cover the cost of any additional expenses related to the order fulfilment, e.g. shipping materials, gift wrap, parcel insurance, rush delivery, etc.Is handling cost an example of carrying cost? ›
Inventory carrying costs include storage, shipping, handling, labor, insurance, taxes, item replacement, shrinkage, and depreciation. They are incurred when products are kept on the shelves in a warehouse, distribution facility, or retail location.Why am I being charged a handling fee? ›
A handling fee is an amount charged to a customer on top of their order subtotal and shipping fees. It covers the cost of expenses related to fulfillment, specifically packing fees based on required labor.Who pays for terminal handling charges CPT? ›
Understanding Carriage Paid To (CPT)
In a CPT transaction, the seller must clear the goods for export and deliver them to a carrier or appointed person at a mutually agreed-upon (between the seller and buyer) destination. Also, the seller pays the freight charges to transport the goods to the specified destination.
Parcel Terminal means a device in a fixed location that makes it possible to receive Shipments from Senders and deliver them to the Recipients. Sample 1.Who can flush a port? ›
Flushing Your Implanted Port
When it's not being used, your port will need to be flushed every 4 weeks. To do this, a nurse will put a needle into your port. They will inject saline (sterile salt water) into your catheter. This is done to make sure the catheter does not get blocked.
There is a reason that the port lacks a blood return, and unless a blood return is obtained—or a dye study verifies correct placement and patency of the device—it should not be used for chemotherapy administration.Can a port get wet? ›
The bandage must be kept dry until the incision is completely healed. This usually takes 5 to 7 days. You can not take a shower during this time. You can usually take a bath if the port is in your chest, but you have to keep the bandage dry.
How to find your port number on Windows. Type “Cmd” in the search box. Open “Command Prompt”. Enter the netstat -a command to see your port numbers.How can I tell if a port is open? ›
Enter "telnet + IP address or hostname + port number" (e.g., telnet www.example.com 1723 or telnet 10.17.xxx.xxx 5000) to run the telnet command in Command Prompt and test the TCP port status. If the port is open, only a cursor will show. If the port is closed, a message will say Connect failed.How can I tell if a port is free? ›
You can use "netstat" to check whether a port is available or not. Use the netstat -anp | find "port number" command to find whether a port is occupied by an another process or not. If it is occupied by an another process, it will show the process id of that process.What are the charges in shipping? ›
Freight charge, also known as freight rate, is the amount paid to a carrier company for the transportation of goods from the point of origin to an agreed location. The freight charge is calculated based on the type of mode of transportation and the distance between the pickup place and the place of destination.What are local charges in shipping? ›
Charge associated with shifting/lifting of container within terminal/depot at shipper request due to whatever reasons including but not limited to container rework, holding/cancel shipment, change of vessel, change of destination, special stowage requirement etc.What is the clean port fee? ›
Effective April 1, 2022, $10 per TEU ($20 for containers longer than 20 feet) will be charged on loaded import and export containers hauled by trucks, with exemptions provided for containers hauled by low nitrogen-oxide (NOx) or zero-emission (ZE) trucks.What are the four types of port? ›
- Serial ports – A serial port is basically a serial communication interface through which information transforms one bit at a time. ...
- Parallel ports – ...
- PS/2 ports – ...
- Universal serial bus port –
- Shanghai port at Yangtze River (China)
- Singapore Port at Malacca Strait (China)
- Shenzhen Port at Perl River Delta (China)
- Hong Kong SAR at Perl River Delta (China)
- Ningbo – Zhoushan Port in Zhejiang (China)
- Port of Busan in Korean Strait (South Korea)
1 Kolkata port, Paradip port, Vizag port, Kamarajar port, Chennai port, Tuticorin port, Cochin port, New Mangalore port, Mormugao port, Mumbai port, Jawaharlal Nehru port and Kandla port are the 12 major ports in India.What are the six ports? ›
On the west coast, there are the ports of Mumbai, Kandla, Mangalore, JNPT, Mormugao, and Cochin.
The use of ports and their identifying numbers are an extension to the addressing scheme. Once the address is used to deliver data to the wanted host on the network, the port number is used to identify the process for which the data is used. This enables one host to provide more than one service.Why is port called port? ›
This side became known as larboard, or "the loading side." Over time, larboard—too easily confused with starboard—was replaced with port. After all, this was the side that faced the port, allowing supplies to be ported aboard by porters.Is a port always 4 digits? ›
TCP/UDP port numbers are in the range 1 to 65535. Most of them are five digits.How many ports are there? ›
There are 65,535 possible port numbers, although not all are in common use. Some of the most commonly used ports, along with their associated networking protocol, are: Ports 20 and 21: File Transfer Protocol (FTP).What is a port IP address? ›
Internet Protocol address (IP address) used to identify a host in network. Port number is used to identify an processes/services on your system. 02. IPv4 is of 32 bits (4 bytes) size and for IPv6 is 128 bits (16 bytes). The Port number is 16 bits numbers.What is terminal handling charges in India? ›
When goods are shipped from one site to another, the terminal authorities charge a specific fee for handling the import/export of such shipments. The consignor and the consignee pay these terminal handling charges (THCs).What are terminal charges in railways? ›
Terminal charges, so levied, for both inward and outward traffic at PFTs shall be reimbursed to the Terminal Management Company of the relevant PFT at the end of every month by the Zonal Railway.What can I do to avoid being charged fees on my account? ›
- Utilize free checking and savings accounts. Many banks still offer them.
- Sign up for direct deposit. ...
- Keep a minimum balance. ...
- Keep multiple accounts at your bank. ...
- Use only your bank's ATMs. ...
- Don't spend more money than you have. ...
- Sign Up for Email or Text Alerts.
- Get well versed with the terms and conditions. Related stories. ...
- Handle cash transactions smartly. ...
- Keep a watch on your ATM transactions. ...
- Study your bank account statement frequently. ...
- Review bank services periodically.
It's illegal ,refuse to pay it . Logistics and handling charges refer to the charges incurred for transportation , holding the vehicle in the stock yard , then later cleaning ,polishing it for delivery . As these all are in ex-showroom price you shouldn't pay for it separately.
Calculating handling fees
First, divide the time required to prepare the package by 60. Then multiple the outcome by the hourly wage. In this scenario, the process of getting an order ready to ship costs you $3.96. You can use the same formula even if you're doing it all on your own.
The CTF was established by the Ports of Long Beach and Los Angeles to pay for implementation of the Clean Trucks Program (CTP). Cargo owners are required to pay a CTF for cargo moved by trucks that do not meet the requirements of the CTP. Cargo contained in a 20-foot container will be subject to a $35 CTF.What is terminal handling receipt? ›
Terminal Handling Charges (THC) are the charges collected by Terminal authorities at each Port for handling equipment in relation to loading and discharging of containers.How long can my package stay in a parcel locker? ›
Typically, parcel lockers can hold packages up to one week or 10 days.What does terminal mean in shipping? ›
The term shipping terminal may apply to facilities where loading and unloading of people or goods takes place: Freight terminal, a processing node for freight, more specifically: Container terminal, a facility where cargo containers are transshipped between different transport vehicles, for onward transportation.What does terminal mean in railway? ›
Terminal literally translates to termination. In context of a railway station, it is the termination of track, where each incoming track ends at stop-blocks and does not go any further. For Example – Anand Vihar is a terminal in New Delhi or Bandra Terminus in Mumbai.What are the terminals in railway? ›
Rail terminals are facilities used for the transfer of passengers and freight to other modes of transportation.What is terminal point in railway? ›
terminal point in British English
(ˈtɜːmɪnəl pɔɪnt ) or terminal station. noun. the final destination or station of a bus or rail journey. Collins English Dictionary.