“Understand the importance of ocean surcharges
When bidding for transportation, what you want to do is to move the goods from A to B at the best possible speed and to a satisfactory level of service. Simple, right?
Although in theory, you’re just buying transportation from A to B – that transportation can be billed very differently.
Ocean carriers, experts at eroding freight in a never-ending race to the abyss, are banking on getting some dollars back with a slew of surcharges and surcharges, some more justified than others. In the end, it may be nearly impossible to decipher the total cost, let alone check the invoice.
So, to help you understand how much you’ll pay, here’s a list of some of the most common add-ons and surcharges you’re likely to encounter. But beware – these are just examples. There are many other, more obscure questions that can appear on your freight bid forms and invoices.
(1) Fuel surcharge (BUNKER SURCHARGE OR BUNKER ADJUSTMENT FACTOR–B.A.F.): It is charged when the fuel price suddenly rises.
(2) Currency depreciation surcharge (DEVALUATION SURCHARGE OR CURRENCY ADJUSTMENT FACTOR–C.A.F.): In the event of currency devaluation, the ship party will not reduce the actual income, and will add a surcharge based on a certain percentage of the basic freight rate.
(3) TRANSHIPMENT SURCHARGE: Any goods that are transported to non-basic ports need to be transshipped to the destination port. The surcharge charged by the ship includes the transshipment fee and the second-way freight.
(4) DIRECT ADDITIONAL: When the cargo to a non-basic port reaches a certain amount, the shipping company can arrange for a direct voyage to the port without transshipment.
(5) HEAVY LIFT ADDITIONAL, LONG LENGTH ADDITIONAL and SURCHARGE OF BULKY CARGO. A surcharge imposed when the gross weight or length or volume of a shipment exceeds or reaches the value specified in this tariff.
(6) Port surcharge (PORT ADDITIONAL OR PORT SUECHARGE): In some ports, due to poor equipment conditions or low loading and unloading efficiency, as well as other reasons, the shipping company imposes surcharges.
(7) Port congestion surcharge (PORT CONGESTION SURCHARGE): a surcharge imposed by some ports due to congestion and increased berthing time of ships.
(8) OPTIONAL SURCHARGE: The cargo party cannot determine the specific port of unloading at the time of consignment, and it is required to choose one port to unload the cargo in the two or more ports proposed in advance, and the ship party will charge an additional surcharge.
(9) ALTERNATIONAL OF DESTINATION CHARGE: A surcharge charged when the owner requests to change the port originally specified for the goods, with the permission of the relevant authorities (such as customs) and the ship’s consent.
(10) DEVIATION SURCHARGE: A surcharge imposed by the ship when the ship must make a detour to transport the goods to the destination port due to the obstruction of the normal waterway.
(11) Piracy Surcharge – Fees that apply to certain routes where precautions must be taken to avoid piracy.
Other different types of charges
Origin document fee
This is what the carrier charges when you ship your cargo to or from Singapore to balance the cost of various factors in terms of documentation (i.e. staffing, equipment and system databases). If shipping instructions are not given to the ocean carrier on time, a document of origin fee will appear on the bill of lading.
Even if an SI has been sent, ODF fees apply when a request to cancel a booking is made after the stated period, making timely transmission of data to the carrier crucial in this regard.
security fee
The International Ship and Port Facility Safety Specification (ISPS) is essentially a set of policies and protocols designed to enhance maritime security and the safety of ships, terminals and ports. This is a measure implemented and closely monitored by the Maritime and Port Authority of Singapore.
Carriers that comply with ISPS typically charge customers this fee for handling the shipment and the personnel and equipment required to keep the shipment safe. This fee applies to all cargo per cargo container.
Departure station fee
Shipping lines charge this fee to cover the handling of the container, which will then be handled through any and all port terminals as defined by established policies and agreements.
Shipping lines then proceed to pay this surcharge to terminal operators. Just as charges for arrival at ports vary, these charges may vary by country.
This is why it is important that when cargo is delivered or picked up at a container terminal, the parties involved in the transaction and shipment determine who will pay all or part of the terminal charges.
Manifest surcharge
Each shipping company must provide the correct destination customs authority with carrier-based shipment information in advance to verify the size and type of the relevant cargo.
This cost is then added to comply with existing regulations. More shipping companies will then continue to increase this fee based on these different requirements in different countries.
Chassis charging
Many ocean liners may no longer offer dedicated undercarriage services for cargo containers, either for import or export. This is a trailer company (companies responsible for transporting bulk cargo over short distances by land, either by sea or by air) chartered by logistics services.
in conclusion
While many customers, shipping lines and even freight forwarding services are aware of base rates and shipping costs, many are often unaware of surcharge increases.
The same can be said for air freight. The only difference with air freight is that the goods involved tend to be smaller, lighter, more fragile types, and even certain types or have a relatively short shelf life, which makes bookings more expensive for logistics companies.
When booking shipments through a freight forwarder, be sure to consult your chosen representative about possible surcharges and your given budget. This way, you’ll have the expertise you need about shipping prices and fees, which you can then use to your advantage.”
