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For Shippers, FBA

Ocean freight invoice: Possible charges you may see in it

It’s not an uncommon situation: you are opening your forwarder’s latest ocean freight invoice, when the total jumps out at you. It’s higher than you expected – and the details are completely foreign to you with tons of acronyms and abbreviations. You have the feeling that some fees may have been included in your invoice by mistake, which can make you angry, so you decide to call your freight forwarder for an explanation, but that leaves you even more confused. In this situation, having an understanding of the possible extra charges can save you some headaches – and some money if you think that the freight forwarder is not being fair.

We’ve detailed some transportation charges you might see on an ocean freight invoice. To compile this data, we looked at extra fees that are listed on the websites of different freight forwarders and cargo lines, such as Panalpina, Safmarine, USPS, Seaboard Marine, MSC, DB Schenker, DSV, Maersk Line, and others.

 

Most common fees in a typical ocean freight invoice:

ADM/BoL/DOC: Administrative Fee or B/LFee or DocFee: fees for paperwork. This service covers the creation and processing of all standard transport documents (such as BoL or Delivery Order). This fee is usually applied per document.

BAS: Basic Ocean Freight: this covers the service of transportation of cargo from the first port of loading to the last port of discharge. It is applicable to all shipments and is applied per container.

BAF: Bunker Adjustment Factor: an adjustment to shipping companies' freight rates to take into account fluctuations in the cost of fuel oil (bunkers) for their ships.

ISPS/SEC/SER: Carrier Security Service: a service provided by the carrier to perform due diligence in maintaining vessel security compliant to the International Ship and Port Facility Security Code (ISPS Code) which is a comprehensive set of measures to enhance the security of ships and port facilities. This service is applicable to all shipments and is applied per container.

EDI: Electronic Data Interchange Fee: you’ll see this fee when your forwarder organizes the exchange of electronic data to ports/customs or other government entities that need the information. The fee is applied at the request of the customer, except in Greece and Israel where the fee is mandatory and applied to all shipments. This fee is assessed per Bill of Lading (BoL)/Transport Document (TPdoc).

GRI: General Rate Increase: planned increase of a base rate from a certain date.

PSS: Peak Season Surcharge: A seasonal fee applied to a shipment during the high volume period (peak shipping season) in certain trades. This charge is applied to all shipments that move in these trades during the high volume periods.

PSI/PSE: Port Security: This fee is for maintaining port security, in compliance with the International Ship and Port Facility Security Code (ISPS Code).  The ISPS Code is a comprehensive set of measures to enhance the security of ships and port facilities. The fee is added to origin/export as well as destination/import shipments. The ISPS Code is a global initiative and part of SOLAS (the international convention for the Safety of Life at Sea) and constitutes a legal obligation for the contracting parties to follow. This charge is applied per container.

Storage: The rate for excess storage of cargo at the port. Is calculated from the moment of unloading at the terminal until the time of export from the terminal. Charged are charged at port rates. Usually quoted for TEU, s increasing the scale (longer the carrier is in port, the more expensive each day of storage).

TLX: Electronic Cargo Release Service: This fee is assessed when the forwarder uses a Telex-release, which allows cargo to be more quickly released at the destination. The shipment can be released with proof of identity of the receiver as consignee, provided all 3 original BoLs have been surrendered by the consignee, or an authorized agent of the consignee, at another carrier’s office location. In order to allow this, all 3 original BoLs must be surrendered at another carrier’s office location (not the discharge port). The carrier will add this service to the shipment, once the BoLs have been surrendered. This fee is charged at the customer's request, and applied per Bill of Lading/transport document.

ALL-IN: All in rate: This charge includes all the costs of transportation, including all the additional fees provided for under the conditions of carriage. For example, in the case of freight under LILO, this means that in the U.S., except for freight, loading, and unloading, also includes all related costs, such as BAF, CAF, etc.

Other fees you might see: 

IMO: IMO surcharge: hazardous goods fee. This charge is applied by the carrier when transporting goods classified by the UN as hazardous. The carrier must take extra care handling this type of shipment, hence charging an extra fee.

AMF: Transport Document Amendment Fee: If you request changes to your BoL, this fee will be assessed.

CFD / CFO: Congestion Fee Destination/Congestion Fee Origin: This is a fee for shipments going into or out of heavy traffic ports. This charge covers the extra costs that come with operational difficulties with heavy use ports, such as delayed berthing windows. The fee will be applied to cargo that is booked to a congested port.

CER: Certification Service: This fee is assessed when a customer requests certificates to be issued. 

CLL: Cancellation Fee: When a confirmed container does not show up for loading, this fee is charged. The fee is applied per no-show container.

DPA: Arbitrary Destination: This fee is charged for providing carrier transport of cargo from a Primary port (Base port) to a secondary port (Arbitrary port/destination port) by feeder or barge. Applicable to all destination ports defined as 'Arbitrary Ports' in a Base Rate tariff.

COD: Change of Destination Service: This fee is assessed, per container, when a shipper decides to change the destination/delivery after a container is gated in at the port of origin, but before it arrives at the port of discharge. This service will not apply when there is: Return shipment, Re-export, Inland change request, extending inland haulage (Imports process).

Charge for nomination for inspection: When a container is inspected for customs or health reasons, this fee is assessed to cover costs.

CCL: Container Cleaning Fee: This fee, applied per container, covers extra costs for special cleaning of returned containers if the container doesn’t meet interior or exterior cleanliness standards. This service of additional cleaning of the container may also be triggered by customer request.

CAF: Currency Adjustment Factor: This charge is an adjustment to shipping companies' freight rates to take into account the effect over time of fluctuations in currency exchange rates.

DMR: Demurrage penalties/demurrage fee: Demurrage fees, which are applied per container, come into play when a shipper holds a carrier’s equipment longer than the agreed amount of free days. These fees can be assessed for both exports: from early drop-off until the container loading on to the vessel, minus free time, and imports: demurrage days are counted from container discharge from the vessel to its removal from terminal (full), minus free days.

DET / DTS: Detention penalties/detention fee: For import: these penalties are imposed for excess usage container since its removal from the terminal (full) until the return of empty containers at the port, minus free days. For export: counted from pick-up empty until the return to the terminal (full) minus free days. This fee is applicable to all containers that remain in the customer’s possession longer than the agreed free time. Not applicable for shipper owned containers.

ERS: Emergency Risk Surcharge: This fee is charged when a carrier must move cargo in dangerous regions including those that are threatened by hazards, violence, or piracy. The charge covers extra fuel costs (due to longer routing and/or faster sailing), insurance coverage, and additional security measures. The fee is applied to shipments that are from, or destined for, affected areas, or that travel through these areas.

CLF: Freight Collection Fee: This fee is applied when the carrier collects freight charges locally and/or in a local currency. This fee can pertain to both export and import shipments and is set by local authorities. The fee can be assessed three ways: per Bill of Lading (BoL)/Transport Document (TPdoc) or per container or as a percentage of freight.

FUM: Fumigation Service: This fee is charged, per container, when containers are fumigated, either at request of the shipper or when it is a legal requirement. Written confirmation that fumigation/defumigation has been performed is provided to the customer via their preferred communication method.

HWS: Heavy Weight Charge/Heavy Weight Service: This is a fee for cargo that weighs more than the standard weight limit for a shipment, and can be assessed per container – as long as the weight is not more than the legal safety limit. These limits may vary among the countries. Usually, 20ft containers exceeding the weight of 14,000 kg tare (container) are subject to a heavy weight surcharge. For reference, an empty 20ft container weighs approximately 2,300 kg. 40ft containers are not subject to a heavy weight surcharge. Both 20ft and 40ft containers can carry a load of more than 28,000 kg.

MHH: Merchant Haulage Service: When carriers must coordinate third party logistics services (Merchant Haulage arrangements) on behalf of the customer, they can charge this fee. This service is applied based upon the customer's request for the carrier to coordinate inland haulage on a merchant haulage Bill of Lading. The customer holds the contract with the haulage provider. Carriers are not required to provide this service.

PIO: Pick-Up/Drop-Off Service: This fee is charged by the carrier when they allow the pick-up or drop-off of empty containers at an alternate container depot than the one stated on the Bill of Lading, where merchant haulage is involved. The service is applied upon customer request.

SWC: Switch Transport Document Service: This service is provided by the carrier to 'switch' transport documents (BoL's) to show new parties by issuing a 2nd set of documents. A 'switch' is used to prevent the shipper from being visible to the buyer and protects the interests of the cargo intermediary. The service is applicable upon the customer’s request for this service.

T1 Doc/T1D: T1 Documentation Fee: This fee is applied to cover the costs related to issuing T1 documents. T1 documents are required for European Union tax regulations when transporting non-community goods between two locations in the EU Customs area. This fee is applicable for all European Union shipments and allows taxes to be suspended until the cargo reaches its final destination. Applied per T1D document issued.

THC: Terminal handling charge: This fee is issued by CY and CFS operators for goods passing through their operations. THC are additional costs, on top of the sea freight, charged by the shipping company for the handling of containers at the container terminal before being loaded onboard a vessel. Examples include the unloading of the container from a truck, stacking and transport from the stacking location to just below the crane. This applies to FCL (Full Container Load) shipments.

WTI: Waiting Time Fee: This fee is charged to shipments when trucks are forced to wait due to customer delays. This fee is applicable whenever trucks are not able to depart from a customer’s depot at the planned time.

WFC: Wharfage Fee: This fee is assessed by a port authority or port operator to the carrier for the usage of a port's wharf. The fee is then charged back to the customer in order to provide transparency and to share the costs. This fee is applied per container and will be applicable to shipments moving to/from port terminals that charge wharfage fees.

WSC: Winter Surcharge: Harsh winter weather incurs extra operational costs, due to convoy restrictions, icy conditions, etc., and this fee helps cover those costs. This charge is per container and only is assessed during winter.

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