As you would with your international shipping, it’s important to know what those fees are in the world of international shipping. Terminal Handling Charge or THC is one of the key charges shippers are accustomed to. Although it sounds difficult, being familiar with what it consists of and its impact on shipping can help businesses make judgment calls. In this guide, I will break down all of the pays terminal handling charges and fees that you need to know.
What Is Terminal Handling?
By terminal handling is meant a set of activities related to handling of loads through the port or terminal, from arrival point till departure point. Unloading the cargo from a vessel, storing it at a terminal, shifting it to a container yard, and in the final stage loading a full container load full of it into another transport vessel are these activities.
Key Activities Involved in Terminal Handling
Within terminal handling, the main activities are as follows:
- Offloading goods from ships at the Port.
- The storage of goods takes place temporarily there in the terminal facilities.
- Customs and quality check involved: Inspection.
- The goods are then transferred to their second mode of transportation onto Trucks or Trains.
These are some important activities to help the flow of good move more smoothly within the logistics chain.
What Are Terminal Handling Charges (THC)?
Understanding THC
Terminal Handling Charges (THC) refers to the fees charged by a port or terminal operator for handling cargo on a port premises or terminal. These are on top of the basic freight charges, and normally are charged to cover the works of unloading, handling, and storing by the vessel operator the cargo at the port.
Why THC Is Important
The THC allows terminal operators to finance and modernise their facilities, finance the needed infrastructure and provide for labour costs related to the terminal handling process. Freight terminals are an essential cost component that container carrier and shippers have to think about in using the shipping terminals and calculating the total shipping expenses.
What is Included In Terminal Handling Charge?
Key Inclusions in THC
A good part of the fees that constitute the Terminal Handling Charges are (or should be) meant to cover the costs incurred several key services and activities that happen at the port. Below is what is usually included in the calculate terminal handling charges at the THC.
- The practical process of taking goods off of the shipping vessel.
- As Cargo from the warehouses around the country, stored with Valuer, taken to the terminal until the point that it’s moved to its subsequent goal.
- Port Crane, Forklift and Other Necessary Equipment: Application of port cranes, forklifts, and other port equipment necessaries to move the cargo.
- Transfer of goods from terminal to their next means of transport, Truck/ Train or Vessel.
Additional Fees
THC could also contain additional services for container terminal and freight terminal, which will depend on the particular the port and infrastructure of the port. An example is customs clearance, special inspection, or security fee.
Types of Terminal Handling Charges (THC)
Standard THC
The most common method of general cargo handling charges has been standard THC. Such services like unloading, storage, and loading of cargo at the same port authority are essential for the proper processing of goods as they are arriving and departing hence the fee applies on those standard services. A standard fee of the simplest type achieved, and the services that permit the transfer of goods from the ships on the one hand, and loading and land transportation on the other. Port and terminal authorities in general set a standard THC and normally the standard for THC is the same for a vessel’s various shipments, unless special conditions or special services are being provided. By structure, this allows shippers to budget their cost when moving goods through ports subjecting to using this structure. It is usually the most predictable and widely used THC structure, which is applicable for the most goods that do not require perishable handling or additional services.
Port-to-Port THC
Port-to-Port THC is a fees charged by some ships company as part of the overall transport fee. The fee structure takes into account the object of handling at least one the cargo traffic between one port and another, i.e. between two terminal operators, in the event of transportation of the cargo between terminals when unloading and unloading it at the least. The structure simplifies the process for the shippers as it enables them to cover the handling charges of each port and origin terminal handling charges in aggregate and not for each. Finally, it is an efficient manner to run shipping operations across multiple terminals while guaranteeing that all port services are covered under one contract.
Prepaid and Collect THC
It is possible to classify THC as Prepaid or Collect, based on who is responsible for the shipping line paying the charges. It is important for shippers and consignees to understand the difference between these two types of THC so that there is no confusion and proper payment handling can be done.
- Prepaid THC: In this, the charge of THC is being prepaid by the shipper as part of the total cost involved in shipping. In simple terms, this indicates that by the time the goods depart for the origin port, the THC is taken care of and the consignee need not worry about any such charges at the arrival. If shippers can be charged at the enterprise level and pay for all of their costs up front, prepaid THC offers precise rates and the convenience of knowing a fixed price for the transport of freight.
- Conversely, Collect THC means THC is payable by the consignee or receiver of the cargo when the goods reach the destination port. This is typically the scenario when the shipper and consignee reach a different arrangement of expenses or when the shipper wishes to lower its own costs at the expense of the consignee by passing them on. The use of collect THC is normally when the consignee is better positioned to control the receipt of goods or to handle the terminal charges part once the cargo is received.
Flat vs. Variable THC
Although trans shipment port has it’s local charges in terms of THC, some ports will charge a flat THC, others will put a variable THC and this of course will affect the price of the shipping in total.
- A Flat THC is one where the same fee is paid regardless of the type or volume of cargo that is handled. The pricing structure is then simple and predicable for the shipper since they already know how much to pay in terms of fees when transporting their goods. Because of this, it is typically used in ports that handle large volumes of the same type of cargo and where there are few different sizes or conditions of cargo that require changes in handing.
- Variable THC: In other ports, the THC can be variable and may vary for many reasons like the size of cargo, the type of goods, or the duration of time for which goods are stored in the terminal. Therefore, bulky or hazardous cargo may have a higher THC because it requires more resources to handle.
The Importance of Terminal Handling Charges
Impact on Total Shipping Costs
However, the part which Terminal Handling Charges fill is, without a doubt, very important. These are not just additional costs to you, but can be a serious factor that will affect the costs of shipping itself – especially in international trading. When it comes to multiple ports or special handling equipment, in fact THC could constitute a large part of the total cost. When shippers do not work out THC, unexpected costs that do not fit into their budget planning could arise and cause delays in their supply chain.
Quality of Service
The terminal operator and operators are able to then utilize the amount charged as THC to reinvest in better equipment, staff training and infrastructure improvements, all of which benefits the shippers. Investments in these areas are key to maintaining high operational standards to break bulk the movement of goods through the terminal efficiently. Thus, there is a more efficient operation, lower risk of cargo damage, and a smaller delay. This then helps to improve the entire shipping process and to increase the reliability and predictability of delivery schedules themselves.
Transparency in Pricing
Terminal Handling Charges provides a much needed transparency with regards to the shipping charges, specifying the charges pertaining to all activities in the port. This gives shippers a true picture of what they are paying for and which services are included in the fee. By assessing these costs, shippers can typically assess the price structure of the various ports, or even different terminals themselves, to make more informed decisions about where to route their goods. This transparency allows the businesses to manage their shipping expenses more efficiently, and helps establish trust between the shippers and the terminal operators and hence builds better relations and meilleurs operational du business.
Why Same Port Fees May Vary Between Shippers
Factors That Influence THC Variation
For the same port, Terminal Handling Fees can differ hugely between two different ports.. These include:
- However, when a port has higher operating costs, THC will also rise.
- The THC can depend on the level of service required. These expediting services may warrant a premium.
- Special cargo refers to cargo that can be hazardous materials or oversized goods, and will normally require an extra handling fee to be charged on top of the THC.
- Shipping Lines Negotiate affected THC differently depending on the companies.
Negotiation Power
Large shippers or shippers with frequent shipments to destination ports might have more bargaining power to get lower THC rates by means of long term contract or of high volume shipments. It is also possible that smaller shippers will not have the same negotiation strength as big shippers, which may allow for a higher the fees charged.
Conclusion
Terminal Handling Charges (THC) are every important part of shipping activities since they include loading and unloading cargo operations, temporary storage, and taking goods to the next mode of transport. These charges are crucial because they affect operational costs of terminal operators in ensuring smooth flow of goods at ports. The level of THC is driven by the type of cargo they are handling, what type of port they are at, the level of service they require, and even who the shipping company they selected is. These variables need to be understood by shippers as they can cause THC to change, and therefore shippers need to plan and budget for this — in other words, they shouldn’t leave it to chance. Ultimately, Terminal Handling Charges are crucial for the maintenance of the infrastructure that enables the global trade to run smoothly, and making them part of the shipping business tariffs will enable businesses to better evaluate and control shipping costs. In addition, this guarantees smooth operations and plays a role in underpinning company growth and securing competitiveness for international shipping companies.
