NEWS & BLOG
Views: 0 Author: Site Editor Publish Time: 2025-08-26 Origin: Site
In ocean freight logistics costs, the THC (Terminal Handling Charge) is a crucial and almost unavoidable expense. For importers, exporters, freight forwarders, and the entire logistics industry, a deep understanding of THC—its meaning, composition, and points of contention—is essential for cost control and dispute prevention.
THC, known in Chinese as "码头操作费" (Terminal Handling Fee), is a charge levied by carriers (shipping companies) on shippers/consignees to cover various costs associated with container handling at terminals.
Simply put, for exports, THC covers operations from the factory to loading onto the vessel; for imports, it covers costs from unloading the vessel to leaving the terminal.
Key Points:
Charged by: Shipping companies.
Paid by: Typically the cargo owner (shipper or consignee, depending on trade terms).
Location: Container terminals at both the port of origin and destination.
THC is a "bundled" fee covering almost all terminal operations related to containers, including:
Container loading/unloading fees: Costs for moving containers to/from the vessel.
Terminal trailer movement fees: Transporting containers within the terminal, yard, and gate.
Yard storage fees: Short-term storage within the terminal’s free period (usually 7 days; beyond this, demurrage/detention fees apply).
Terminal administrative fees: Documentation, system entry, and gate management.
Equipment usage fees: Costs for cranes, forklifts, etc.
Note: THC does not include expenses like container pickup/return, customs clearance, inspection, trucking, port construction fees, or security charges.
Payment responsibility is determined entirely by International Commercial Terms (Incoterms).
FOB (Free On Board):
Origin THC: Paid by the seller (shipper).
Destination THC: Paid by the buyer (consignee).
Common dispute: Buyers often mistake THC as part of ocean freight, but origin THC is separately paid by the seller.
CIF/CFR (Cost, Insurance & Freight / Cost and Freight):
Origin THC: Paid by the seller.
Destination THC: Paid by the buyer (along with customs, duties, etc.).
DDP (Delivered Duty Paid):
All THCs (origin + destination) paid by the seller.
Core Principle: THC is paid by the party responsible for arranging transportation at the respective port.
Basis: Based on container size/type (e.g., 20GP, 40GP, 40HQ, 45HQ), not weight or value.
Rates: Set by shipping companies/local carrier associations, filed with transport authorities. Rates vary by port/terminal due to operational differences.
Currency:
Origin THC in China: CNY (RMB).
Destination THC: Local currency (e.g., USD in U.S., EUR in Europe).
Mandatory: Must be paid if using the terminal; no opt-out for cargo owners.
Lack of Transparency: Buyers under FOB often confuse THC with ocean freight. Carriers may quote itemized (“O/F + THC”) or all-in rates—scrutinize carefully.
High Cost Proportion: THC is a major component of local charges, especially for short-haul or low-value cargo.
Historical Disputes: Early 2000s saw lawsuits in Asian ports (e.g., China) against carriers for "double-charging," but THC separation is now global practice.
Clarify Trade Terms: Specify THC responsibility in contracts.
Request Detailed Quotes: Ask carriers/forwarders for breakdowns (O/F, Origin THC, Destination THC, DOC, telex release, etc.).
FOB Buyers: Proactively ask appointed forwarders about destination charges, including THC.
Compare Ports: Choose terminals with lower THC rates where possible.
Beware of "Zero/Low Freight": Carriers may offset losses with higher local charges like THC—focus on total cost, not just freight rates.
THC is a reasonable and necessary cost reflecting terminal operations. Its "unavoidable" nature stems from its mandatory status and cost significance. By understanding THC, clarifying contracts, and reviewing charges, cargo owners can effectively manage logistics costs and ensure smooth international trade.
