In the global trade landscape, international air freight plays a pivotal role. However, behind the seemingly straightforward shipping process lie various fees that often confuse shippers—particularly "terminal handling charges" (THC) and "pickup fees." Should these costs be paid separately? How are they generated? And who bears the responsibility? This article provides a comprehensive analysis of these two critical charges in international air freight to help businesses navigate costs effectively.
The Fundamental Differences Between Terminal and Pickup Fees
Before addressing whether these fees require separate payment, it's essential to understand their distinct meanings. Both fall under ground handling costs in international air freight, but they originate from different operational stages and involve different responsible parties.
- Terminal Handling Charge (THC): As the name suggests, this fee covers various ground handling services in airport "terminal areas," including cargo terminals at departure, transit, and destination airports. Specifically, THC includes costs for unloading, warehousing, sorting, security checks, palletizing/depalletizing, and cargo handover services provided by airport terminals. In simple terms, THC represents "service fees charged by airport terminals for cargo processing."
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Pickup Fee (Delivery Charge/Pick-up Fee):
This can be categorized into two scenarios:
- Origin Pickup Fee: When a freight forwarder or airline collects goods from the shipper's warehouse, an "origin pickup fee" applies.
- Destination Pickup & Delivery Fee: After cargo arrives at the destination airport terminal, if the forwarder or customs broker needs to retrieve and deliver goods to the consignee's specified address, this incurs a "destination pickup and delivery fee." Note that pure "pickup fees" typically refer only to basic charges for collecting goods from airport terminals, excluding final delivery services.
Payment Logic: Pricing Models and Responsibility Allocation
Whether terminal and pickup fees require separate payment depends primarily on the freight pricing model and contractual terms. In other words, the key factors are whether these charges are already included in the quoted price and how trade terms or transportation contracts allocate responsibilities.
International air freight typically follows two pricing models that directly determine payment requirements:
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"All-in" Rate (Inclusive Pricing): No Separate Payment Needed
This common pricing model from forwarders or airlines bundles base air freight, departure terminal fees, and destination terminal fees. Some comprehensive "All-in" rates may even include origin pickup or destination delivery fees—if explicitly stated in contracts. With "All-in" pricing, shippers simply pay the total cost ("All-in rate × chargeable weight"), with THC already incorporated. Similarly, if the quote clearly includes pickup fees (e.g., origin pickup in "door-to-airport" pricing or destination delivery in "door-to-door" services), no additional payment is required. -
"Net Rate" (Pure Air Freight): Separate Payment Required
In specific scenarios (e.g., large shippers booking directly with airlines or forwarders providing itemized quotes), rates may reflect "pure air freight" only—covering just the airborne transport cost between airports, excluding ground handling. Here, THC must be paid separately: departure terminal fees by the shipper to the origin terminal or forwarder, and destination terminal fees by the consignee (or shipper if pre-arranged). Likewise, if pickup services are "add-ons" (e.g., shipper-requested collection or consignee-required delivery), separate payment to the service provider (forwarder, trucking company, etc.) applies.
Trade Terms: Who Pays What?
Beyond pricing models, trade terms (e.g., EXW, FOB, CIF, DDP) explicitly define cost responsibilities between buyers and sellers. These affect "who pays" rather than "whether to pay separately."
- EXW (Ex Works): Under EXW terms, the buyer assumes all transportation costs (including origin pickup, departure THC, air freight, destination THC, and destination pickup). If the buyer receives a "net rate" quote, all terminal and pickup fees require separate payment to the forwarder.
- DDP (Delivered Duty Paid): Here, the seller covers all expenses, usually offering a "door-to-door all-inclusive rate." Terminal and pickup fees are embedded in the total price, with no additional buyer payment.
Practical Case Studies
To clarify payment scenarios, consider these examples:
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Case 1:
David exports electronics from Shanghai to New York under CIF terms with an "All-in" forwarder quote.
Analysis: As the seller, David's "All-in" rate includes departure/destination THC and other fees—no separate terminal fee payment. -
Case 2:
Emma imports machinery from Frankfurt to Beijing under EXW with a "net rate" quote.
Analysis: The buyer (Emma) must separately pay both terminal fees and pickup charges (if forwarder-arranged). -
Case 3:
Sophia imports cosmetics from Tokyo to Shanghai under DDP with a "door-to-door" supplier quote.
Analysis: The seller's all-inclusive rate covers all fees (THC, pickup, duties, etc.)—Sophia pays nothing extra.
Key Takeaways
In summary, whether terminal and pickup fees require separate payment hinges on pricing models and trade terms. To prevent disputes, shippers should confirm these critical details with forwarders or airlines:
- Is the quote an "All-in" rate?
- Which costs are included?
- Are terminal and pickup fees covered?
Terminal Fees: Separate payment depends on the quote—included in "All-in" rates but extra for "net rates." These are fundamental airport handling charges, effectively "mandatory" in air freight, differing only in billing consolidation.
Pickup Fees: These are "optional add-ons"—paid separately if services (like collection or delivery) aren't quoted; otherwise, included in comprehensive service pricing.
(Note: The fees discussed are for reference only—actual charges may vary.)