Local charges in shipping rates everyone should know about

LOCAL CHARGES IN SHIPPING RATES EVERYONE SHOULD KNOW ABOUT

Transportation is fundamental for companies that want to import and export products, not only when choosing a good service but also for competitive rates. It is essential to know the costs to be assumed in the shipment of goods.

Shipping costs can sometimes be challenging to understand, although once we master the concepts, they become easier to understand. This article tells you everything you need to know about the local charges applied in a shipping quote.

Cost concepts in import and export maritime shipments

In maritime transport, it is necessary to know the following concepts:

  • Freight: Price stipulated for the rental of the full container or part of the container.
  • Bank draft: It is 1% of the freight to cover currency fluctuations.
  • T.H.C.: Costs of handling the container at the port premises.
  • BL ISSUANCE: Bill of lading issuance costs.
  • T3: Freight charge for transit in the port area.
  • Transport: Cost of moving the container from the port area to the buyer's premises.
  • Customs clearance: cost of issuing the customs clearance.
  • Tariff: Tax levied on import merchandise.
  • Import V.A.T.: 21% on the C.I.F. value and duties. Exports are exempt from V.A.T.
  • V.A.T. on services: 21% is applied to T.H.C., transport, clearance, and issuance of B.L.
  • Surcharges: fuel surcharges along with other extra expenses.

Main local charges in F.C.L. and L.C.L.

n F.C.L. and L.C.L., the leading local charges applied in ocean freight rates are as follows:

  • T.H.C. (Terminal Handling Charge): The charges incurred for port handling, both at the port of departure and at the port of destination. These are also called Port Handling.
    • When it comes to F.C.L., the particular shipping company sets the corresponding amount, something that varies depending on the geographical area and the type of container. It is quoted per container.
    • For L.C.L., handling is calculated on a W/V basis. A different value is usually quoted for each size.
  • ISPS (International Security Port Surcharge) This is the surcharge applied by shipping lines to compensate for the additional costs of security measures. In a full container, it can be quoted per container, B/L, or TEU. In groupage, per bill of lading.
  • B/L (Bill of Lading). It is the document that serves as evidence of the contract of carriage between the shipper and the shipping company. It is the cost of documentation and issuance of the bill of lading or B/L. It is applied per document, i.e., per B/L issued.
  • T3: Consists of a charge for the transit of goods on the docks and the use of berthing facilities, accesses, handling areas, and traffic lanes, among other port facilities. It applies to transit, import, and export. As far as F.C.L. is concerned, there are two ways to apply the T3:
    • Simplified estimation regime: applying a fixed amount per container.
    • Regime per group of goods: the T3 amount is based on the sum of the following amounts: one according to the type of container and one per ton.
  • S.R.C. (Civil Liability Insurance). The freight forwarder's liability insurance is compulsory. It is quoted per B/L.
  • I.M.O. and OWS in land transport. The price of land transport (F.C.L. or L.C.L.) of heavy or dangerous goods is usually increased by 25% over the base price as they are higher-risk goods.
  • Other concepts in the quotations: are equipment cleaning, on-wheels, logistics management, container control, and more. Based on the type of expense, they are applied per container or B/L.
  • Customs clearance. Customs clearance can be offered in different ways: container, per commercial invoice, per B/L, etc. It depends on the complexity of the shipment: type of merchandise, if it is import or export, according to the number of tariff items to be declared, if services are required, or for any other reason

Usually, all origin/arrival charges are grouped in one all-inclusive package per container to make it easier for customers to calculate all the operation costs.