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ChargesTHC

Terminal Handling Charge

A fee charged for handling a container at the terminal, applied at both origin and destination.

What is Terminal Handling Charge?

A terminal handling charge (THC) is the fee for handling a container or cargo at a port terminal, covering moves between the ship and the container yard and related terminal services. In liner shipping the terminal operator bills the carrier for these services, and the carrier passes them on as a separate origin THC (OTHC) or destination THC (DTHC), usually at a tariff amount that need not match the carrier's actual cost. US marine terminal rules define handling as physically moving cargo between point of rest and any place on the terminal other than the end of ship's tackle. Air cargo terminals levy comparable handling charges per kilogram or per shipment. THC is separate from wharfage, which is levied on cargo crossing the wharf, and from storage charged after free time ends.

Why it matters for forwarders

Who finally pays THC is a matter for the sales contract: Incoterms 2020 sets out each rule's costs in articles A9 and B9, and disputes arise when, for example, a CFR or CIF buyer is billed destination THC that the seller's freight contract already covered. Every quote should state whether origin and destination THC are included, at what amount and in which currency, because carriers adjust THC separately from base freight. In US tariffs, changes in charges the carrier does not control and merely collects, including terminal services, are exempt from the 30-day notice that applies to other increases. Destination THC must normally be paid before the delivery order is released, so a disputed THC can hold up collection and generate demurrage. Reconcile THC invoices against the published tariff, since charging the same THC to both shipper and consignee is a recurring billing error.

THC FAQ

Who pays terminal handling charges?

Origin THC is usually paid by the shipper and destination THC by the consignee, but the agreed Incoterms rule and the freight contract decide the final allocation. Quotes should state THC explicitly.

Is THC the same as wharfage?

No. THC pays for handling cargo within the terminal, while wharfage is a charge on cargo passing over the wharf. Some tariffs include wharfage within THC and others bill it separately.

How is THC calculated?

Ocean carriers usually charge THC as a flat amount per container, varying by port, container size and type, as set in their tariff. LCL handling charges are commonly per freight ton or cubic metre, and air cargo handling per kilogram or per shipment.

What is the difference between THC and demurrage?

THC is a one-time charge for handling the container through the terminal. Demurrage is time-based and accrues daily once the container stays in the terminal beyond its free time.

Sources

  1. 46 CFR 525.1 Marine terminal operator schedules, purpose and definitions, Cornell Law School LII (US Code of Federal Regulations)
  2. 46 CFR 520.8 Effective dates, Cornell Law School LII (US Code of Federal Regulations)
  3. Incoterms 2020, International Chamber of Commerce

Rules and figures change. Check the current text with the issuing body before relying on it.

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