What Are Terminal Handling Charges (THC) and Who Pays Them?
When cargo moves from one location to another, port authorities impose specific fees for processing imports and exports. These charges are known as Terminal Handling Charges (THC) and are typically paid by both the shipper and the consignee.
What Are Terminal Handling Charges?
Once goods arrive at the port terminal, the terminal management authority charges a service fee. This fee, commonly referred to as Container Handling Fees or Port Handling Charges, covers services such as loading and unloading, storage, internal transport, and basic cargo maintenance.
Since each port may operate multiple terminals and follow different local regulations, THC Charges can vary significantly from one location to another.
What Do Terminal Handling Charges Include?
In general, THC Charges cover different types of services depending on the port. These may include:
Loading and unloading at the port
In-terminal transport
Storage
Labor
Berthing
Terminal facilities
While some terminals only charge for services up to the unloading of the container, others may also include delivery to a nearby warehouse.
For example, if Shipper A ships a container from India to the United States and needs it delivered to Consignee B’s warehouse, the Port Handling Charges will include loading, berthing, labor, facility usage, and delivery to B’s site.
Moreover, if A requests temporary storage of the container at the terminal for several hours or days, additional Terminal Fees will apply for storage services.
Who Pays THC Charges?
In most cases, the exporter (shipper) pays the Origin Terminal Handling Charges (OTHC) before the cargo is loaded. The exporter usually pays this fee to the shipping line representative, who then transfers it to the port authority. A Bill of Lading (BOL) is issued at the port of origin.
The importer (consignee) pays the Destination Terminal Handling Charges (DTHC) at the destination port before collecting the cargo. The carrier collects this amount and forwards it to the port authority.
The responsibility for paying THC Charges is typically agreed upon in advance by both the shipper and the consignee and documented in the shipping contract. If the contract states that the shipper is responsible for all charges, they must pay both OTHC and DTHC. Otherwise, the two parties may split the charges.
For instance, if A and B sign a contract specifying that A only pays for charges at the port of origin, B will be responsible for paying DTHC at the destination port or upon delivery to B’s warehouse.
Example of THC Charges in Practice
Let’s consider a case where Abby X Cosmetics in India ships 30 containers to Lily Y Cosmetics in Egypt.
Case 1: Shared THC Charges
Abby X ships the containers from Mumbai Port. The port authority handles unloading from the truck, moving containers to the vessel, storing them securely, and overseeing maintenance until the ship departs. These services involve cranes, labor, and storage space. Therefore, the Bill of Lading will state that the consignee must pay for these Container Handling Fees.
When the vessel reaches Cairo Port in Egypt, the local port authority unloads the containers and transfers them to Lily Y’s trucks. If Lily Y fails to collect the containers on the same day, the carrier will charge for crane use, handling labor, maintenance, and storage.
Case 2: Shipper Pays All THC Charges
If both parties agree that Abby X covers all shipping expenses to Lily Y’s warehouse, then Abby X will pay for the Bill of Lading, international freight, and inland delivery from the port to the warehouse.
Note: If Abby X chooses transshipment over direct shipping, the costs may increase. The carrier must pay Transshipment Terminal Handling Charges (TTHC) to the port authorities at the intermediate port. Although this cost is part of the total freight rate, it can influence the final shipping price.
How Are Terminal Handling Charges Calculated?
Port authorities usually calculate THC Charges based on the size of the shipping container. There are fixed rates for 20-foot, 40-foot, or 40HQ containers. For Full Container Load (FCL) shipments, shippers can check the rate sheets from their origin port to estimate Terminal Fees.
However, not all shipments qualify as full container loads. In many cases, Less-than-Container Load (LCL) or Consolidated Cargo is used.
In an LCL shipment, multiple small shipments from different shippers are combined into a single container. Freight forwarders handle this consolidation and charge individual shippers accordingly, often including a profit margin.
If shipping LCL, THC is typically calculated per metric ton or cubic meter (CBM), depending on the cargo’s weight and volume.
Important: Terminal Handling Charges vary from port to port and even between different terminals at the same port.
Types of Terminal Handling Charges
THC Charges are applied at three points: the port of origin, destination port, and transshipment port (if applicable). Accordingly, they are divided into three categories:
Origin Terminal Handling Charges (OTHC): Paid by the shipper at the port of departure before receiving the Bill of Lading. Includes loading, maintenance, and storage.
Destination Terminal Handling Charges (DTHC): Paid by the consignee before collecting the cargo at the destination. Covers unloading, storage, and delivery if arranged.
Transshipment Terminal Handling Charges (TTHC): Paid by the carrier at the transshipment port. These charges include unloading from one ship, storage, and reloading onto another ship. The shipping company typically includes TTHC in the total freight cost.
What’s the Difference Between Terminal Fees and Terminal Handling Charges?
Although related, Terminal Fees and Terminal Handling Charges differ. Terminal Fees refer specifically to the cost of using the terminal (or dock) and are often included in the overall shipping cost, meaning the shipper does not pay them separately.
In contrast, THC Charges are usually based on container size, while Terminal Fees for LCL shipments are calculated based on weight or volume—measured per ton or cubic meter.
