To the untrained eye, deciphering an ocean freight quotation may seem like a daunting task, and the disruptions associated with today’s supply chain mean that charges, rates, and surcharges may change at any moment. That’s why it’s very helpful to have a quick guide that provides an explanation of each rate you can expect to receive. Then you can effectively interpret and compare freight quotations. 

Freight quotations are generally divided into three sections:

1. Pre-carriage: covers any inland movement that occurs before the loading of the container.
2. Carriage: actual transportation of cargo via ocean freight from the loading port to the port of discharge.
3. On carriage: covers any inland movement that occurs after the container is discharged at the port of discharge.

Pre-carriage

Customs clearance: fee paid in order to have shipment processed.

Documentation charges: charges related to documentation (export permits, licences, etc) preparation.

Fuel surcharges: charges meant to compensate for the fluctuating price of fuel. 

Packing charges: fee charged for packing the container.

Wharfage: covers the cost related to port duty, such as the storage, loading, and unloading of cargo – usually included in base freight rate.

Carriage

Ocean freight rate: basic charge for the transportation of a container from one port to another.

Bunker Adjustment Factor (BAF) / Fuel Adjustment Factor (FAF): a surcharge added to your freight rates to cover the cost of fuel. 

Bill of Lading fee (BL fee): a documentation charge payable to the carrier of goods at the time of releasing the bill of lading. 

Destination documentation fee: the release charges at the destination port

Emergency Bunker Surcharge (EBS): a surcharge added to the freight rate to cover the cost of fuel.

Emergency Rate Restoration (ERR): a surcharge added to the freight rate to cover overall increases in the shipping costs.

Environment Fee Destination: surcharges related to environmental impact contingencies imposed by destination port.

Equipment Imbalance Surcharge (EIS): a surcharge imposed in order to recover costs related to the removal of large quantities of empty containers from countries that no longer have use for those containers. 

Equipment Repositioning Surcharge (ERS): charges imposed when a carrier must make empty containers available at the request of a shipper.

Export Service: agent service fees.

Gulf of Aden Surcharge (GAS): applicable when transiting the Gulf of Aden.

Hazardous Surcharge: fee charged when transporting volatile or hazardous goods.

Importer Security Filing (ISF): also known as “10+2” is a Customs and Border Protection (CBP) requirement for all ocean cargo imports to the United States.

International Security Port Surcharge (ISPS): charges related to the security of the container while it’s in port.

Low Sulphur Surcharge: fee applicable when using fuel that has lower emission.

Over Weight Surcharge (OWS): charged when cargo is deemed overweight.

Peak Season Surcharge (PSS): a surcharge imposed during peak season.

Piracy Surcharge: a charge intended to compensate shipping companies for costs incurred as a result of avoiding piracy.

Special Equipment Surcharge (SES): charge related to the handling of special equipment. Suez Canal Surcharge (SCS): applicable when transiting the Suez Canal.

Terminal Handling Charges (THC) / Container Service Charges (CSC) at Origin: charged for the positioning and storage of containers before loading.

Terminal Handling Charges (THC) / Container Service Charges (CSC) at Destination: charged for the positioning and storage of containers after unloading. 

On-carriage

Chassis Utilisation Surcharge: charged by ports for use of their chassis.

Container Yard Receiving Charge (CYRC): costs related to container yard transport and storage.

Customs Clearance: fee paid to customs broker which may include customs duty and VAT.

Demurrage/Detention: charge incurred when shippers fail to load or unload their containers within the agreed-upon time.

Destination Delivery Charge (DDC): this fee covers crane lifts off the shipping vessel, container drayage, and gate fees at the terminal.

Documentation Charges: charges related to the preparation of import documentation. Fuel Surcharge (FS): charges meant to compensate for the fluctuating price of fuel. Handling Fee: charged for transporting, storing, and/or packaging goods.
Release Fee: charged by destination port for the release of cargo. 

Transit Accompanying Document (TAD): must accompany uncleared goods.
Unpacking Charges: fees applicable if third-party warehouse unpacks and stores goods.

Wharfage: covers the cost related to port duty, such as the storage, loading, and unloading of cargo – usually included in base freight rate.

Conclusion

Ocean freight charges can change at the drop of a hat, and boasting a good understanding of freight quotations can help one make an informed decision when comparing different carriers’ quotations.