What is the local charge usually shown in the arrival notice? And what does it mean in reality?
For shipments imported by sea, many Consignees, upon receiving the Arrival notice (A/N), are startled to learn that in addition to sea freight, they will also have to pay other surcharges before the shipping company "releases an order" to pick up the goods.
Actually, those surcharges are not unreasonable fees that shipping lines force customers to pay but include port fees to compensate for expenses incurred during the trip. To fully name each Local Charge cost, there are quite many, but let's review a few main names with King Elong in the article below.
So what are Local Charges?
Local Charges are fees paid at the port of loading and port of discharge. For a shipment, both the Shipper and Consignee must pay this fee, which is collected according to the shipping line and port. These costs may have different calling methods in each place but usually include the following fees:
👉 THC (Terminal Handling Charge): This is a fee collected on each container to offset the costs of cargo handling activities at the port. The port collects loading and unloading fees from the shipping company and other related fees, which the shipping company then collects from the Shipper and Consignee.
👉 Handling fee: A type of fee regulated by the shipping company or Forwarder. Shippers or consignees will be responsible for paying this fee to the shipping company or Forwarder. Paying the Handling fee is to offset the costs of taking care of the shipment, typically transaction fees between the carrier and the agent, D/O procedure fees, manifest fees, depreciation fees, etc.
👉 D/O fee (Delivery Order fee): When there is a shipment imported into Vietnam, the Consignee has to go to the shipping company/Forwarder to get a delivery order. If the Consignee wants to receive a delivery order, he or she will have to pay a fee to the shipping company/Forwarder, and then take it outside the port. To present to the warehouse and make a ticket to pick up the goods
👉 B/L fee (Bill of Lading fee), Documentation fee: These are similar fees to D/O fees, but using for export process. It means when there is an export shipment, shipping lines will issue invoices. For sea transport, the B/L fee is also proof that the shipping company has completed the delivery process.
👉 CIC (Container Imbalance Charge): It is also called empty shell shipping surcharge. This is a type of ocean freight surcharge that shipping lines collect to offset costs arising from moving a large number of empty containers from places with surplus to places with shortages. It can be understood that there is a big difference between import and export, so there is a situation that there is an excess of containers in these places but a shortage of containers in the other places
👉 LSS (Low Sulfur Surcharge): This is a surcharge for reducing sulfur emissions. Commercial vessels now run on fuel with high sulfur content, so the International Maritime Organization has worked to reduce emissions into the environment. This amount will be separately collected by shipping lines or added to ocean freight.
