What are Terminal Handling Charges (THC)?
If you are at play in the field of logistics with international trade, warehousing and distribution, sooner or later you will have to deal with shipping containers. This is the second article of a serie about documents and terms relating to your Supply Chain.
If you are shipping containers from one to another port you will always be confronted with Terminal Handling Charges mostly written as THC. A port terminal will charge for the handling of cargo, so picking up your container from a truck on the quay and from the quay on the boat. On the port of destination it is the other way around, there the THC are for handling the cargo from the boat on the quay and from the quay on a truck.
The history of Terminal Handling
In the olden days stevedoring, or the business of loading and unloading cargo from a ship, was paid by the shipowner. He paid the stevedores at the port for the loading or unloading of his cargo. Stevedoors are the port workers and they run the majority of operations at a port. For loading or unloading cargo they operate the cranes and derricks and they help with the berthing an unberthing of ships that arrive in the port or leave the port. As trading developed and globalization started, the shipping also developed and so did stevedoring. From manual, labor intensive work, ports developed seperate terminals for handling all kind of different cargo that would come in and would go out. They started to load and unload ships more efficiently and safely. In time the manual work was mechanized and ports started charging Terminal Handling Charges to the shipping lines. Containerization became the standard and all ports in the world have nowadays their own personnel or 3rd party operators for the stevedoring.
What is included in Terminal Handling Charges?
THC includes all the local charges of the port terminal and they can vary from port tot port. The THC charged by the port of Shenzen in China will differ from the THC in the port of Rotterdam. Even within the port of Rotterdam THC may differ from terminal to terminal because of different technology and or equipment. The hight of the THC of a specific terminal depends on the wages of the employees, the equipment, the infrastructure, taxes and surcharges to the government etc. Different types of containers will also affect the hight of the THC, think of a 20ft verus a 40ft container or a tankcontainer with dangerous goods that has to be stored at a special location in the Container Yard. Reefer containers that need to be plugged in for electricity and needs checks if everything works ok.
Types of THC
There are 3 types of THC;
- Terminal Handling Charges at Origin (OTHC)
- Terminal Handling Charges at Destination (DTHC)
- Terminal Handling Charges at Transhipment port (TTHC)
OTHC and DTHC are paid by the seller or buyer depending on what their terms of sales are. TTHC is always paid by the carrier as he arranges the shipping route from point A to point B via Point C. So the TTHC will always be included in the seafreight costs.