The cost of doing business in the freight forwarding industry can be significant at times, especially since freight rates are still quite high, and still unpredictable as ever. Experts at McKinsey & Company have claimed that freight rates will remain elevated, and that “it is almost impossible to predict exactly when supply chains will normalize. Efforts are being put in place to remedy the situation, however, massive uncertainty remains.”
With that being said, extra added costs are the last thing any freight forwarding company needs, as importing and exporting goods is already expensive enough. However, there are many types of port charges that are also an unavoidable part of shipping, and those costs can accumulate easily. Port fees can become exorbitant, but not all hope is lost! There are actually some certain port charges that you can get around.
What Are Port Charges?
Port charges, or port fees, are expenses that need to be paid to port authorities in exchange for the use of the port’s facilities, equipment, and services. There are many different types of port fees that will add to the overall cost of shipping, and we go through some of the most common types of port charges in this post.
What Are the Most Common Types of Port Charges?
- Ship Dues: Ship dues are also known as port dues or docking dues. These are imposed on all ships that enter the port. Ship dues are allotted to cover the cost of the port’s infrastructure, like berths, channel lighting, etc. Each port has its own way of calculating docking dues, but they all follow a general rule of being based on the amount of cargo in the ship’s vessel. Port dues also vary depending on the origin of the ship, with vessels travelling between international ports being charged with higher dues in comparison to domestic vessels.
- Goods Dues: Goods dues are charged based on the cargo that gets loaded, unloaded, or transferred between ships. These charges are typically paid for by the customer, instead of the shipping company. Weight, volume, or number of goods play a factor in calculating the rates, and different types of cargo (liquid, palletized goods, livestock, etc.) are measured with different metrics. And of course, there may be extra charges for hazardous or dangerous cargo.
What Are Some Other Types of Port Charges?
- Terminal Handling Charge: The terminal handling charge (THC) is, unfortunately, unavoidable, as the fee is for loading and discharging containers from ships.
- Port Storage Charge: Like the THC, port storage charges are also inescapable. These charges are collected for the containers on the port that are waiting to be processed. These containers either haven’t been cleared for import, are waiting to be shipped, or are empty containers that haven’t been picked up yet.
- Demurrage: Demurrage charges are caused by two possible scenarios. One, the full container hasn’t been moved out of the terminal for unpacking within the allotted free days. Two, the container can’t be loaded onto a ship, either because of incorrect documentation or other mistakes.
- Detention: Detention fees need to be paid when the container has stayed outside of the port past the free days. In order to avoid these charges, make sure to return containers within the allocated free time.
- Early Arrival & Late Arrival Charge: Ports operate under strict and particular schedules, so when a container arrives at a different time, ports will require extra payment to account for the additional work. It doesn’t matter whether the container arrives earlier or later than intended, if it shows up anytime outside of its scheduled arrival, as it both results in more work for the port staff.
- Lift On & Lift Off: These charges occur when the container has already been processed, but needs to be moved again for other reasons, like further inspection. In that case, lift-on and lift-off charges can be added by the port.
- Cancellation and Amendment Charge: This can also be called a shifting charge. Similar to early and late arrival charges, when a container’s journey needs to be altered, it leads to more work for the port staff. These alterations can vary between stopping the container, or changing the container’s destination. But regardless of the amendments, port staff will have to modify a container’s documentation and re-process it.
- Stuffing and Destuffing Container Charge: Some ports allow for and provide stuffing and de-stuffing container services in case the cargo was originally packed incorrectly. For example, when dangerous or hazardous goods are not packaged and sealed properly.
How Can You Mitigate Port Fees?
A lot of port fees are unfortunately the inevitable cost of being involved in the shipping and logistics industry. But the most avoidable port fees are detention and demurrage charges, and the easiest way to lessen these charges is to implement real-time tracking in your shipping journey. And this is where SFI can help you!
With SFI’s Straight Tracking, our users can track their containers like an online order. By looking at the Shipment Milestone Status Bar and the Shipment Progression Status, you will have all the information you need at your fingertips.
If you need any assistance regarding freight forwarding, contact SFI today and we’ll take care of your shipping needs. We have professionals ready to help resolve any shipping problems you may have. Email us at firstname.lastname@example.org or call us at (909) 594-3400.