What is THC?
THC (terminal handling charge) is the handling fee charged for taking a container off the ship at the port terminal, moving it within the yard, stacking it and loading it on the ship. It is an item separate from freight; it accrues twice, independently of each other, at the port of departure and at the port of arrival.
Is THC included in the freight?
The answer depends on the basis on which the quotation is given. A port-to-port freight quotation, as a rule, covers only the ship's carriage charge; terminal handling is outside it. In quotations given as a single price (all-in), THC can be embedded, but which side's THC has been included is often not written. This is the most frequent misunderstanding: the importer takes a quotation that includes the departure side as the total cost, and the budget is thrown off when the arrival terminal's item is invoiced separately.
- Confirm in writing whether the quotation is port-to-port or all-in
- If it is all-in, ask separately which side's THC is included
- Ask for the local charges on the arrival side to be listed line by line
Why do departure and arrival THC come out separately?
Because there are two different terminals, two separate operators and two separate handling operations. At departure the container is admitted to the yard, stacked and loaded on the ship; at arrival the same work is done in reverse order. Each terminal charges according to its own published tariff. Freight being paid in advance (prepaid) does not close the arrival side: the prepaid distinction covers only the freight. So an importer buying FOB still meets the arrival terminal's item separately, even if the seller has paid the departure side.
Who pays THC, and how does it relate to the Incoterms rule?
Who bears the terminal charge is decided not by the carrier but by the sales contract; the Incoterms rule sets the framework for this sharing. In Incoterms 2020 the cost items are collected under a single list in articles A9 and B9 of each rule; the aim is to reduce disputes over terminal charges being claimed from both parties at once. The rule alone is still not enough: under rules where freight is with the seller, such as CFR and CIF, whether the discharge cost at the port of arrival belongs to the seller is determined by looking at how the contract of carriage is set up.
Which items are confused with THC?
THC is not a waiting charge but the price of a one-time handling service; it arises even if the container never waits in the yard. In LCL shipments the terminal item is passed on not directly to the shipper but through the consolidator, and it mostly enters the invoice as a consolidation warehouse (CFS) and deconsolidation charge.
- Storage: counts the time spent in the yard, paid to the terminal or the warehouse operator
- Demurrage and detention: use of the container beyond the free time, paid to the carrier
- ISPS: the port security item, a separate line from handling
- Document and cargo delivery items (see delivery order): unrelated to handling, invoiced separately
Who bears terminal handling under common Incoterms rules
| Rule |
Departure terminal |
Arrival terminal |
| EXW |
Buyer |
Buyer |
| FCA |
Seller up to the place of delivery |
Buyer |
| FOB |
Seller |
Buyer |
| CFR / CIF |
Seller |
The seller for the discharge that belongs to the seller under the contract of carriage, the buyer for the rest |
| DAP |
Seller |
Seller; discharge with the buyer |
| DPU |
Seller |
Seller; discharge also with the seller |
| DDP |
Seller |
Seller; discharge with the buyer |
Frequently asked questions
Is THC included in the freight quotation?
In port-to-port quotations, as a rule, it is not; in all-in quotations it can be embedded. The only way to remove the uncertainty is to ask for the local charges on the departure and arrival sides to be listed line by line. Reading the total cost from a single freight line is one of the most frequent mistakes in an import budget.
The seller paid the departure THC; why did I still receive a terminal invoice?
Because the item that was paid belonged to the departure terminal; the arrival terminal is a separate operator and charges according to its own tariff. This distinction is especially important in FOB purchases. If the contract does not say who determines the arrival-side items, the invoice dispute starts at the arrival port.
Is there THC in LCL transport as well?
In LCL the terminal item is passed on not directly to the shipper but to the consolidator who closes the container. In the shipper's invoice it mostly appears in the consolidation warehouse, deconsolidation and handling lines. Because naming changes from agent to agent, it should be asked which line covers what.
Are THC and storage the same thing?
No. THC is the price of a one-time handling service and arises even if the container never waits in the yard. Storage is the charge for the time the goods stay in the yard. While a full container waits, demurrage can also accrue to the carrier; the three items are invoiced separately.