THC in Ocean Shipping: A Detailed Guide to the Indispensable Terminal Handling Charge

1. What Exactly Is THC?

• Definition: THC refers to the fee collected by shipping lines or terminals from shippers to cover the costs of cargo handling, loading/unloading, storage, and related operations at ports. In simple terms, it is a "service fee" generated during the cargo’s stay at the port.

• Charging Entities: Typically collected by terminals or shipping companies, and ultimately passed on to shippers.

• Applicable Stages: Divided into Origin THC (charged at the loading port) and Destination THC (charged at the discharge port), both of which are standard items in shipping cost breakdowns.

2. What Services Does THC Cover?

THC is not a single fee but a bundled cost for basic port services, including the following core operations:

• Loading & Unloading Operations: Lifting containers from the yard to the vessel or unloading them from the vessel to the terminal yard.

• Yard Storage: Temporary storage of containers within the terminal (usually with a free storage period; demurrage fees apply for extended stays beyond the limit).

• Equipment Usage: Operational and maintenance costs of port machinery such as cranes and forklifts.

• Documentation Processing: Paperwork and administrative procedures related to cargo entry and exit at the port.

• Example Breakdown (For Reference Only): For a 40-foot container exported from Shanghai Port, the THC may include:

• Loading/unloading fee: ¥400

• Storage fee (free for 7 days; ¥50/day for extended periods)

• Equipment usage fee: ¥200

3. How Is THC Calculated?

• Container Type: The fee for a 20-foot container (20GP) is usually 60%–70% of that for a 40-foot container (40GP/40HQ).

• Port Location: THC is lower at mainstream ports in Europe and America (e.g., $120 per 20GP at the Port of Los Angeles), while fees at some remote ports may double.

• Shipping Line Strategy: Large shipping lines like Maersk and COSCO SHIPPING have transparent THC standards, while some small and medium-sized lines may add management fees on top of THC.

4. Key Differences Between THC and Other Shipping Fees

4.1 THC vs ORC (Origin Receiving Charge)

• THC: A universal terminal handling fee applicable at ports worldwide.

• ORC: A supplementary "comprehensive operation fee" charged at the loading port for specific routes (e.g., Asia-Europe routes). It often overlaps with THC, so shippers need to guard against double-charging.

4.2 THC vs BAF (Bunker Adjustment Factor)

• THC: A fixed cost tied to port operations, with stable pricing in the short term.

• BAF: A variable surcharge that fluctuates with international oil prices, calculated independently of THC.

• Avoidance Tip: Some freight forwarders package THC with other fees (e.g., documentation fees) as "local fees". Shippers should request a detailed breakdown of all costs.

5. Controversies and Precautions Regarding THC

5.1 Major Controversies

• Lack of Transparency: Some ports adjust THC rates without prior notice, leaving shippers with no choice but to accept the price hikes passively.

• Risk of Double Charging: A few shipping lines impose additional "port upgrade surcharges" under the guise of THC.

5.2 Practical Countermeasures

• Confirm Before Signing Contracts: Ask freight forwarders to provide the THC standards for both origin and destination ports, and include these details in the formal contract.

• Leverage Exemption Policies: Some ports offer THC discounts to large long-term clients (e.g., a 10% discount for shippers with an annual volume of over 500 containers).

• Track Historical Data: Use shipping platforms to check THC fluctuation trends at the same port and avoid abnormal expenses.

6. How to Optimize THC Costs?

• Maximize Container Utilization: Optimize cargo loading to avoid "half-container" waste caused by insufficient weight or volume. For example, if a 40HQ container is only 50% full, the amortized THC cost per unit of cargo doubles.

• Avoid Demurrage Risks: Plan container pickup and return times in advance to steer clear of extra storage fees beyond the free period. For example, Yantian Port offers a 7-day free storage period, with an additional ¥100/day in THC for extended stays.

• Choose Transparent Channels: Prioritize cooperation with shipping lines that publish detailed THC breakdowns (e.g., CMA CGM provides a global port THC inquiry tool on its official website).

7. Why THC Should Not Be Overlooked

1. Accurately explain the source of THC fees to help clients understand where their money is spent.

2. Dynamically track port policies to timely warn of THC price adjustment risks.

3. Optimize operational processes to reduce amortized costs by minimizing demurrage and improving loading rates.

Only by incorporating "detailed costs" like THC into global cost management can shippers truly achieve cost reduction and efficiency improvement in international logistics competition.