Last updated: October 11, 2023
Port charges for containers can increase the cost of shipping. Read this blog to find out all about port charges and get tips on how you can avoid them. Or, learn how 1,500+ companies are avoiding demurrage and detention charges.
The shipping processes are quite complicated and have a lot of hidden fees and charges. Being part of the shipping industry, it’s important that you’re aware of the different port charges so you can ship your cargo at the best price. We’ll discuss some of the most common port charges later in the blog.
However, the most important port charges that you should be aware of are demurrage and detention charges. These are charged by the carriers for delayed use of containers. And one easy way to avoid demurrage and detention charges is by leasing shipper owned containers (SOCs). With SOCs you’re not indebted to move and/or return the containers to the carrier within a certain time frame.
But how do you find these containers? Right here on the Container xChange leasing platform where you can lease containers at the best rates.
Use the leasing search to see the container availability and current leasing rates for your route. Try it right now!
What are port charges for containers?
Some port charges are fees that the shipping operators pay to the port authorities for their services. Other port charges are penalties that you pay to the port authorities or the shipping lines. These are charged if shipment is early, late or there’s some last minute change in its route.
These charges increase the cost of shipping. And oftentimes, also affect the final price of the cargo being transported.
While some port charges like demurrage and detention can be avoided, other charges are fixed. These include terminal handling charges and good dues among others.
If you want to know more about different port charges and how to avoid them, keep reading.
13 common types of port charges for containers
Port charges are calculated based on a number of factors. Some charges take into account the type of freight, how it’s packed, its weight, or how long it’s been held at the port.
There are many external factors that also affect the port charges you’re paying. For example, if the port is congested, it’ll take longer for your container to get unloaded. You can end up paying port storage charges in this case, at no fault of yours. If you’re aware beforehand of all the port charges, you can plan better and avoid them.
To help you with that, here is a list of port charges that are pretty common in shipping.
Goods dues
Dues on goods, also known as wharfageWhat is Wharfage? A wharf is a man-made, fixed structure where the vessels can dock for safe loading and unloading of cargo. Wharfage refers to the fee for using the wharf (also called quay) to store ... More, are levied on all the goods that get loaded or unloaded from a vessel. In fact, they are also charged on goods that are transferred between ships.
The rates on these charges vary from port to port/ terminal to terminal. But they are usually calculated depending on the weight, volume, or number of the goods. The goods dues can also be set based on the nature of the cargo.
Take, for instance, liquids and dry cargo. The goods dues might apply here based on the volume of the shipment. Whereas, palletized goods might be charged based on their weight. Additional dues may be charged for dangerous cargo.
These charges are paid by the customer – not the shipping line.
Terminal handling charge
The terminal handling charge (THC) is another one of container charges at ports you can’t get around. As the name suggests, the THC is a fee collected by terminal operators for loading, unloading, storage, movement and maintenance of containers at a terminal, container freight station, or even at a wharf.
Both the ports where the cargo is loaded and discharged charge terminal handling fees.
If your containers only require transshipment, then the port where that takes place also charges THC. In this case, the terminal handling charges will be paid by the shipping line directly. However, that is often not the case with THC at the loading and discharging ports. Here, the shipper and consigneeWhat is a consignee? When transporting freight (by ocean, air, or land), there are two parties involved — one who is shipping and the other who is receiving the freight. The recipient of the goods b... More of the cargo decide who pays the THC.
Port storage charges
Port storage charges are the charges paid for the space occupied by the container inside the terminal grounds, warehouse, or container yard. This storage period starts as soon as your containers enter the storage facility and end when they’re taken out of the territory.
However, the ports offer some free days (3-7 days) for the containers to get loaded or unloaded and leave the terminal. If your containers are able to leave the terminal before the free days get over, you can avoid paying port storage charges. But if your containers get stuck on the port due to port delays, port congestion, or any external factors, you’ll have to pay the container storage charges.
Early arrival charge
Most ports work on strict schedules. If your container arrives at the port before its schedule, you may end up paying an early arrival charge. Ports assign stack dates to each vessel and coordinate their activities based on them. If your containers are on the port before the stacks are open, it’ll create more work for the port authorities. And you’ll end up paying early arrival fees for that.
Late arrival charge
Similar to the early arrival charge, there’s also a late arrival fee. If your container arrives later than planned, the port might charge a late arrival fee. Especially. if the container is delayed enough that the stacks, it was scheduled to be taken to, are already closed. Something that will bring more work to the port workers.
Lift on/lift-off charge
This is a port charge for containers that might be added by the port. Each container needs to be loaded or unloaded from the vessel. Some ports may charge an additional fee for doing that.
Cancellation or amendment charge
Every industry charges some cancellation or amendment charges, especially at the last minute. In the shipping industry too, you’ll have to pay a cancellation charge if you want to cancel the arrival of your containers. Similarly, an amendment fee is charged if the route of your containers is changed to include/remove another port.
Container clearance charges
These fees are associated with customs clearance and inspections of imported or exported goods. They can include documentation charges, inspection fees, port fees for imports and customs duties. To calculate these charges, you should check with your local Consulate, or Embassy of the destination country to find out what items in your shipment may be subject to duty and what those duties may be.
Plugging charges
Plugging charges refer to charges associated with plugging and unplugging refrigerated shipping containers. These containers, often referred to as reefers, are used to transport temperature-sensitive cargo, such as pharmaceuticals. To maintain the desired temperature inside these containers, they are equipped with refrigeration units.
Port authorities may impose plugging charges when connecting the refrigeration unit of a reefer container to a power source. These charges are applied to cover the cost of electricity and maintenance of the reefer container’s refrigeration at the port.
Environmental fees
These fees are charged by some ports to support environmental initiatives, comply with sustainability regulations, and address the environmental impact of port activities. Environment fees are designed to encourage sustainable logistics.
Depot handling charges
Depot charges in shipping are associated with the storage, maintenance, and handling of shipping containers at container depots.
Container depots are facilities where containers are temporarily stored, serviced, and made ready for their next shipment. If you want to avoid paying container storage fees at ports, you can move your containers to depots and pay this charge instead. But there’s a way you can avoid paying both these charges. Read on to find out more.
Demurrage charge
Let’s first talk about the most common port charge for containers. Demurrage charges are charged by the carriers for delayed use of containers within the terminal. Remember we talked about the free days? Well, if your container doesn’t leave the terminal within the carrier-allotted free days, you’ll have to pay a demurrage charge.
The demurrage charge is very similar to the port storage charge we discussed above. Sometimes, demurrage and storage charges overlap and you’ll end up paying for both of them. However, there are some places where port storage charges and demurrage are recognized as the same.
A major difference between the two is that in the case of demurrage, you make the payment directly to shipping lines. On the other hand, it’s the terminal that collects the storage charges through shipping lines.
Detention charge
Unlike demurrage, detention charges are added when a container is outside the port. If you hold on to a carrier’s container for longer than the allowed free days, you will be charged with detention.
You can also be charged detention fees when you export containers. Let’s say that you pick up an empty container to load it. But you don’t return it before the free days run out. Then, the carrier will impose detention charges.
These charges are added in an attempt to decrease the container’s turnaround time.
Demurrage and detention charges together can increase the cost of your shipping significantly. According to our annual Demurrage and Detention Benchmark report, the average D&D charge for 14 days on the port of New York is $2,478. It’s two to three times more expensive than ports in other parts of the world.
Now, imagine paying around $3,000 for just 14 days! And these are just the D&D charges we’re talking about. If you combine all the other charges we’ve discussed, you’ll end up paying more money in charges than paying for the containers.
But there are a few ways to avoid these charges. Read on to find out more.
How to avoid port charges for containers
As we’ve seen, there are some port charges that you just can’t get around – such as terminal handling and goods dues.
And then there are charges that you can almost completely avoid by following the tips we’ve discussed below.
Plan and negotiate in advance
Proper planning can not only reduce, but also help you avoid paying most port charges completely. If you plan your shipments right, you can avoid paying late or early arrival charges. Moreover, if you find a way to reduce the transshipment of your containers, you can reduce terminal handling charges as well.
Similarly, negotiating extra free days when you’re leasing containers is also a great way to avoid paying D&D charges. The more free days you have, the more likely it’ll be that your containers arrive and leave the terminal on time.
Track your containers
Continuing with the importance of planning, a great way to plan your shipments is to track your containers. This way, you’ll know if your containers are late or early and you can prepare accordingly. By tracking your containers, you can reduce most of the port charges, from cancellation to D&D charges.
Manage your documents
Your goods can only successfully pass customs if your container clearance and shipping documentsWhat are shipping documents? In shipping, shipping documents are documents that provide information about the goods being shipped. They may include information such as the origin and destination of th... More are in order. Even if one document is missing, you can expect your container to remain in the terminal for a longer time, incurring port storage and detention charges.
Use SOC containers to avoid demurrage and detention charges
Using shipper-owned containers (SOCs), instead of COCs, is a great way to avoid demurrage and detention charges. When you’re using a SOC, you’re essentially leasing it from the container owner. The owners also prefer this arrangement, as you’re repositioning their containers and saving them money on storage and repositioning. It’s a win-win situation!
But how do you connect with container owners? If you depend on traditional sourcing channels, you’ll need to contact multiple container owners and make sure they have containers in your desired location. Then, you’ll have to compare the prices and negotiate deals individually. With this manual process, you’ll be spending a lot of time waiting to finalize a deal. And let’s not forget about arranging the vessel slots afterwards.
What if we tell you there’s a way you can get SOC containers and book vessel slots without all this work? Read on to find out how we can help you with this.
Book SOC containers and vessel slots on Container xChange
On our leasing platform, you can book SOC containers from 1500+ vetted companies in 2500+ locations globally. All you have to do is fill in your requirements, including the container type, location and the location you want to ship the container. Then, you’ll get multiple offers from vetted lessors.
You can compare the prices on a single dashboard, thereby, reducing the time spent contacting different companies. If you’re not happy with the prices being offered, you can negotiate directly with the companies on our platform.
Once you’ve secured your boxes, just head over to our Ocean Freight Marketplace to book vessel slots for SOCs. Here too, you fill in your requirements and get instant quotes to choose from. On our ocean freight marketplace, you get access to shipping schedules globally. We offer booking confirmation within 24-hours, so you can plan your shipments better and reduce unnecessary port charges.
All this with 100% market transparency! Plus, we don’t charge any commission on your deals.
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Port charges for containers: Common FAQs
What are port charges for shipping containers?
Port charges are fees that the shipping operators pay to the port authorities for their services.
How many types of port charges are there?
There are several port charges. Some are unavoidable like dues on goods and terminal handling charges. Other charges are early arrival charge, later arrival charge, cancellation charge and demurrage and detention charge.
How to avoid port charges for shipping containers?
There are a few ways to avoid port charges for shipping containers. If you plan your shipments right, negotiate better free days, track your containers and manage your documents you can avoid most port charges. To avoid demurrage and detention charges, you can use SOC containers.
