Terminal Handling Charge (THC)

Terminal Handling Charge (THC) – Simple Explanation and Examples

What is Terminal Handling Charge (THC)?

In the logistics and transportation industry, Terminal Handling Charge (THC) refers to the fees levied by terminal operators for loading and unloading cargo at a port or terminal. This fee covers the various services provided at the terminal such as storage, container movement within the terminal, and documentation processing. THCs are typically charged by both origin and destination terminals and can vary based on the type of cargo, terminal, and location.

Why is Terminal Handling Charge (THC) Important?

Understanding Terminal Handling Charge is crucial for businesses involved in international trade, as it forms a significant part of the total shipping cost. Knowing how THCs are applied helps businesses in:

  • Cost Estimation: Accurately calculating the overall shipment cost.
  • Negotiation: Discussing terms with shipping companies to potentially reduce costs.
  • Planning: Optimizing supply chain strategies by considering terminal-specific charges.

Examples of Terminal Handling Charge (THC)

To illustrate how Terminal Handling Charges work in practice, let’s look at a few scenarios:

  1. Importing Electronic Goods from China to the USA:
    • Origin THC: When electronic goods are shipped from Shanghai, the Shanghai terminal operator will charge an origin THC for handling the goods.
    • Destination THC: Upon arrival at the Port of Los Angeles, the terminal operator will impose a destination THC for unloading and handling the goods.
  2. Exporting Textiles from India to Europe:
    • Origin THC: The Mumbai port will levy an origin THC for managing the shipment of textiles.
    • Destination THC: Upon arrival at a European port such as Rotterdam, a destination THC will be charged.

Components of Terminal Handling Charge (THC)

THCs generally encompass several types of services, including:
Container Movement: Moving the container within the terminal premises.
Storage: Temporary storage fees for keeping the cargo before it is loaded onto a vessel or after offloading.
Documentation: Costs associated with preparing and processing necessary paperwork.
Lifting: Using cranes and other machinery to load/unload containers onto/from vessels or trucks.

Factors Affecting Terminal Handling Charge (THC)

Type of Cargo

The nature of the cargo, whether it is dry, refrigerated (reefer), hazardous materials, or oversized cargo can impact the THC. For instance:

  • Reefer containers require additional handling and electrical connections to keep the cargo at the specified temperature, leading to higher THCs.
  • Hazardous materials typically attract higher fees due to the need for special handling and safety precautions.

Terminal Location

Different terminals have different fee structures based on factors like:

  • Geographical Location: Ports in prime locations or major trade hubs may have higher THCs due to increased demand.
  • Infrastructure: Terminals with advanced facilities may charge higher fees for their enhanced services.

Operational Costs

  • Labor Costs: Terminals in regions with higher labor costs might charge more.
  • Equipment and Technology: Fees can depend on the type of equipment used, such as automated cranes, and IT systems for tracking and management.

Considerations When Dealing with Terminal Handling Charge (THC)

To effectively manage and anticipate terminal handling charges, keep the following considerations in mind:

Understanding Incoterms

  • Incoterms (International Commercial Terms) define the responsibilities of buyers and sellers in international transactions. Knowing the applicable Incoterms is essential as they dictate who is responsible for THCs.
  • For example, under FOB (Free On Board) terms, the seller covers all costs up to the loading of goods on a vessel, including origin THCs. The buyer then covers destination THCs and all subsequent costs.

Contract Review

  • Carefully review shipping contracts to understand who (the buyer or seller) is responsible for THCs. Contracts should specify the point of cost transfer to avoid disputes and additional unforeseen expenses.

Negotiation

  • Negotiate with shipping companies or freight forwarders. Some might offer package deals where THCs are included in the total shipping cost, potentially lowering the individual charge.

Budget Allocation

  • Allocate a budget for THCs in your total shipping cost estimation. Bear in mind potential changes due to varying factors like seasonal demand, terminal efficiency, and currency fluctuations.

Conclusion

Terminal Handling Charges (THC) are a critical component of international shipping costs, ensuring the smooth handling of cargo at ports and terminals. By understanding the various aspects of THC, including its components, influencing factors, and strategic considerations, businesses can better manage their logistics and customs clearance processes.

For more detailed assistance and personalized guidance on managing your customs-related needs, feel free to contact us at eezyimport. Let us simplify your international trade journey!


By providing a clear and concise explanation, along with relevant examples and strategic insights, we hope this article has added value to your understanding of Terminal Handling Charges (THC) in the logistics and customs clearance process.

Terminal Handling Charge (THC) – FAQ

 

What is a Terminal Handling Charge (THC) and why is it important?

A Terminal Handling Charge (THC) is a fee imposed by terminal operators for services related to the loading and unloading of cargo at a port or terminal. It covers activities such as storage, container movement, and documentation processing. Understanding THCs is crucial for accurately estimating shipping costs, negotiating with shipping companies, and planning supply chain strategies.

What factors influence the amount of Terminal Handling Charge (THC)?

Several factors can affect the amount of THC, including:
Type of Cargo: Different types of cargo like refrigerated containers and hazardous materials require special handling, impacting the fee.
Terminal Location: THCs may vary based on the terminal’s geographical location and infrastructure.
Operational Costs: Labor costs and the type of equipment used at the terminal also influence THC rates.

How can businesses manage Terminal Handling Charges effectively?

To manage THCs effectively, businesses should:
Understand Incoterms: Identify who is responsible for THC costs by understanding applicable international commercial terms.
Review Contracts: Ensure that shipping contracts clearly specify responsibilities for THCs to avoid unexpected expenses.
Negotiate: Discuss terms with shipping companies or freight forwarders for potential package deals that include THCs.
Budget Allocation: Include an estimated budget for THCs in the total shipping cost to better plan finances.

eezyimport is an online platform and is not a licensed customs broker. However, we work closely with a third-party licensed customs broker who can assist with any entry-related issues.

eezyimport is an online platform and is not a licensed customs broker. However, we work closely with a third-party licensed customs broker who can assist with any entry-related issues.

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