Navigating ocean freight invoices can be daunting, with numerous fees and charges that often appear confusing or questionable. Understanding these costs is crucial for shippers to ensure transparent transactions and avoid unnecessary expenses.
1. Common Freight Forwarder Surcharges: Key Items to Identify
Ocean freight pricing extends beyond basic transportation costs, with various surcharges potentially inflating the final bill. These fees may originate from shipping lines or port terminals. Recognizing legitimate charges versus questionable additions is an essential skill for any cargo owner.
Here are standard ocean freight surcharges every shipper should know:
- ORC (Origin Receiving Charge): Fees applied at the port of origin for cargo handling.
- DDC (Destination Delivery Charge): Fees for cargo handling at the destination port.
- THC (Terminal Handling Charge): Costs for container loading/unloading and storage at terminals.
- BAF/FAF (Bunker/Fuel Adjustment Factor): Fuel surcharges implemented when oil prices increase.
- CAF (Currency Adjustment Factor): Exchange rate fluctuation charges applied by carriers.
- DOC (Document Fee): Administrative fees for processing shipping documents.
- PSS (Peak Season Surcharge): Additional fees during high-demand shipping periods.
- AMS (America Manifest System): Mandatory filing fee for U.S.-bound shipments.
Additional charges like port congestion fees, overweight/oversize fees may also apply depending on specific shipment circumstances.
2. CIC Fees: Understanding Container Imbalance Charges
The Container Imbalance Charge (CIC) addresses trade route container distribution issues resulting from:
- Seasonal shipping volume fluctuations
- Trade imbalances between regions
- Variations in cargo types and handling requirements
This charge effectively transfers container repositioning costs to shippers, particularly affecting export-heavy economies that often face unilateral pricing adjustments from carrier alliances.
3. CFS Fees: Special Considerations for LCL Shipments
Container Freight Station (CFS) fees apply specifically to less-than-container-load (LCL) shipments, covering:
- Cargo consolidation/deconsolidation
- Temporary storage
- Document processing
CFS charges typically calculate per cubic meter and occur at both origin and destination ports. Under FOB terms, exporters pay origin CFS fees separately, while CIF shipments bundle these costs into quoted rates.
4. EBS Fees: The Fuel Cost Variable
Emergency Bunker Surcharges (EBS) represent temporary fuel cost adjustments when oil prices exceed carrier thresholds. These unpredictable fees vary by region and timeframe. While traditionally excluded from FOB terms, some carriers now attempt to transfer EBS costs to FOB shippers.
5. Local Charges: Understanding Domestic Logistics Costs
Local charges encompass all non-international transportation expenses, including:
- Booking fees
- Customs clearance
- Terminal handling
- Document processing
- Dangerous goods declarations
- Warehousing and trucking
Standard trade terms typically assign local charges to the receiving party (importer under CIF, exporter under FOB), except for door-to-door shipments where comprehensive logistics services incur these costs throughout the supply chain.
6. Cost Allocation Across Trade Terms
Different Incoterms determine financial responsibilities between trading partners:
- EXW (Ex Works): Buyer assumes all transportation costs and risks from seller's premises.
- FOB (Free On Board): Seller covers costs until cargo loading at origin port.
- CIF (Cost, Insurance & Freight): Seller pays for main carriage and insurance to destination port.
- CFR (Cost & Freight): Seller arranges main carriage without insurance coverage.
Understanding these ocean freight cost structures enables shippers to audit invoices effectively and make informed logistics decisions. Comprehensive knowledge of shipping charges remains the most reliable defense against unnecessary expenses in international trade.