Reasons and Practical Implications of Stating "Actual Costs Extra" in Quotation Terms
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Freight forwarders' quotations may include terms like "actual costs to be charged separately," "charged separately when incurred," or similar expressions.
These phrases do not give forwarders free rein to add extra charges arbitrarily. They serve as a pre-notification condition to the shipper that fees whose amounts or occurrence cannot be finalized at the time of quotation may be billed separately at actual cost if they arise.
If the meaning of "actual costs to be charged separately" remains unclear and the transaction proceeds, it can lead to disputes later on regarding customs inspection fees, storage charges, demurrage, detention, waiting time charges, redelivery fees, or other local charges. This article explains why such wording is used and how it should be presented in quotations.
Scope Covered in This Article
| Item | Content Covered in This Article | Content Covered in Detail Elsewhere |
|---|---|---|
| Basics of Actual Costs to be Charged Separately | This covers the concept of charging fees separately at actual cost when amounts or occurrence cannot be determined at the time of quotation. | The relationship between waiver clauses, validity periods, and standard trading terms of quotations is handled in the article on waiver clauses in quotations. |
| Relation to Additional Charges | This deals with fees often problematic upon occurrence, such as customs inspections, storage charges, waiting time fees, redelivery charges, and delivery location-related fees. | Additional charges often overlooked by shippers, cost structures for imported cargo, and domestic delivery-related additional fees are covered in their respective articles. |
| Demurrage and Detention | This explains the approach of treating demurrage and detention fees arising from free time overrun as actual costs to be charged separately. | Conditions for demurrage and detention, and allocation of responsibility, are covered in specialized articles. |
| Relation to Quotation Validity Period | This covers how fluctuations in freight, surcharges, exchange rates, and local charges from the time of quotation to shipment can be handled as actual costs to be charged separately. | How to handle orders placed after the quotation validity expires is handled in the article about quotation validity periods. |
| Explanation to the Shipper | This focuses on how to avoid giving the impression of "charging for anything later" by concretely explaining target fees and conditions of occurrence. | Issues that must not be left ambiguous in contracts with shippers and e-mail records of change instructions are covered in separate articles. |
| Function in Case of Accidents or Claims | This explains how charges such as redelivery costs, storage fees, inspection fees, and repacking fees after incidents were not fully included in the quotation originally. | Claim letters, survey reports, insurance claims, and carrier recourse are discussed in cargo incident-related articles. |
What Does "Actual Costs to be Charged Separately" Mean?
"Actual costs to be charged separately" means that charges not included in the quoted amount may be billed separately at the actual amount incurred if they arise.
In international transportation, some fees can be confirmed at the time of quotation, while others cannot be determined until they occur. For example, ocean freight, CFS charges, D/O fees, customs clearance fees, and domestic delivery fees can be relatively easy to include in quotations. On the other hand, costs like customs inspection fees, port congestion, storage charges, redelivery fees, waiting time charges, and additional work due to consignee circumstances may be uncertain in advance.
This wording is used in practice to avoid forcibly including such uncertain charges in the total quoted amount and instead settle them at the actual amount when incurred.
Why Is It Necessary to Write "Actual Costs to be Charged Separately"?
The primary reason for using "actual costs to be charged separately" is to prevent future disputes over cost responsibility.
If this wording is absent in the quotation, the shipper may understand the quoted amount to be all-inclusive. Later, even if customs inspection fees or storage charges arise, the shipper could claim, "I thought these were included in the original quote," or "I wish I had been informed beforehand if there would be additional fees."
From the forwarder's perspective, stating "actual costs to be charged separately" is not merely a billing term but a responsibility to explain in order to prevent misunderstandings with the shipper.
Organization by Type of Fee
| Cost Category | Ease of Including in Estimate | Reasons to Charge as Separate Actual Cost | Example Description |
|---|---|---|---|
| Ocean Freight / Air Freight | Costs that are easier to include in estimates if conditions are confirmed. | Amounts may change after the estimate validity period due to surcharge revisions or space changes. | Changes in freight, surcharges, exchange rates, and space conditions will be charged as separate actual costs. |
| CFS Charge, D/O Fee, THC | Costs that are usually easier to include in estimates if within the normal scope. | Rates may fluctuate due to changes by shipping companies, CFS, or port authorities, or special handling. | Rate changes by shipping companies, CFS, or port authorities will be charged as separate actual costs. |
| Customs Inspection Fees | Usually difficult to include in estimates as it is uncertain whether inspections will occur. | Possible charges for inspection attendance, cross-carrying, unpacking, repacking, and moving to inspection areas. | Customs inspection fees, attendance fees, unpacking/repacking fees, and cross-carrying fees will be charged as separate actual costs when incurred. |
| Storage Fees | Difficult to include if assuming cargo is removed within the usual schedule. | Storage periods may extend due to customs delays, document errors, consignee circumstances, or delivery delays. | Storage fees, CFS storage fees, and warehouse storage fees will be charged as separate actual costs when incurred. |
| Demurrage / Detention | Usually difficult to include as free time return is assumed. | Incurs due to customs delays, shipment delays, consignee circumstances, or delayed returns. | Demurrage, detention, and free time excess charges will be charged as separate actual costs when incurred. |
| Waiting Charges / Redelivery Fees | Difficult to include if normal delivery is assumed. | Incurs due to consignee’s late acceptance, outside reception hours, vehicle restrictions, or inability to unload cargo. | Waiting charges, redelivery fees, and cargo returns due to consignee circumstances will be charged as separate actual costs when incurred. |
| Vehicle Change / Transfer to Smaller Vehicle | Difficult to include unless delivery conditions are confirmed in advance. | Additional arrangements may be required due to lack of access for large vehicles, time restrictions, or insufficient unloading facilities. | Vehicle change fees, small vehicle transfer fees, and special vehicle fees will be charged as separate actual costs when incurred. |
| Government Procedures, Quarantine, and Compliance Costs | Difficult to include as they depend on cargo content and inspection results. | Additional checks or inspections may occur due to quarantine, food hygiene, pharmaceutical affairs law, chemical substance regulations, etc. | Government procedures, quarantine, and regulatory compliance costs will be charged as separate actual costs when incurred. |
Examples of Costs That Should Be Charged as Separate Actual Costs
Costs that should be charged as separate actual costs vary by project, but typical examples include the following:
- Customs inspection fees
- Storage fees
- Demurrage
- Detention
- Storage
- Waiting charges
- Redelivery fees
- Cargo returns
- Holiday, early morning, or night delivery fees
- Additional work fees due to consignee circumstances
- Vehicle change fees
- Small vehicle transfer fees
- Changes in shipping company charges
- Local charges
- Government procedures and inspection-related costs
These are costs that the freight forwarder does not arbitrarily generate, but are often incurred due to circumstances involving customs, shipping companies, ports, CFS, delivery companies, consignees, local agents, and the like.
“Separate Actual Cost” Alone Is Not Enough
Simply stating “separate actual cost” in a quotation is not sufficient. From the shipper’s perspective, it is unclear what costs are included as actual costs and under what circumstances they may arise.
Therefore, quotations should not only state “separate actual cost” but also list the applicable costs as specifically as possible.
For example, stating “customs inspection fees, storage fees, demurrage, detention, waiting charges and redelivery fees due to consignee circumstances will be charged as separate actual costs when incurred” is clearer than merely writing “separate actual cost.”
Separate actual cost is not something to be dismissed with a brief phrase, but a condition for explaining cost risks to the shipper in advance.
Relationship Between Separate Actual Cost and Estimate Validity Period
Separate actual cost is also related to the estimate validity period.
Charges from shipping companies, exchange rates, port fees, and local costs that were valid at the time of estimate preparation may change by the actual shipment date. If the shipper places an order after the estimate validity period, the originally quoted amount may not necessarily apply.
In such cases, including statements in the quotation like “re-quotation after validity period” and “changes in shipping company charges, exchange rates, and local costs will be charged as separate actual costs” helps clarify cost fluctuation risks.
Separate actual cost is important not only for unpredictable additional charges but also for organizing cost fluctuations from the estimate preparation to shipment.
Separate Actual Cost and the Freight Forwarder’s Scope of Responsibility
Separate actual cost relates not only to cost issues but also to the scope of responsibility.
For example, if a forklift is not available at the delivery location and the vehicle must wait for a long time, there is a question of whether the freight forwarder or the shipper should bear the waiting charges.
If the quotation includes “waiting charges and redelivery fees due to consignee circumstances will be charged as separate actual costs,” the freight forwarder can more easily explain the reasons for the additional costs.
Without such a statement, the shipper may claim they believed these were included in the delivery fee. In other words, the notation of separate actual cost is not only to justify additional charges but also to clarify who bears the costs under which circumstances.
Points to Keep in Mind When Explaining Separate Actual Cost
When explaining separate actual cost to shippers, it is important not to give the impression that “anything will be charged afterwards.”
“Actual cost separately” is not an ambiguous term to add a freight forwarder’s profit margin, but a mechanism to transparently settle third-party costs and unforeseeable expenses.
When explaining this, expressions like the following are appropriate.
This quotation includes normally expected costs, but customs inspections, storage fees, Demurrage, Detention, waiting charges due to consignee’s conditions, and other costs whose occurrence or amounts cannot be predetermined will be invoiced separately at actual cost when incurred.
Explaining it this way helps shippers understand more clearly “what will be charged separately.”
Example expressions for English quotations
For overseas shippers or overseas agents, the following expressions can be used in quotations.
| Use | English Expression | Practical Meaning |
|---|---|---|
| When specifically listing applicable costs | Customs inspection fees, storage charges, demurrage, detention, waiting charges, re-delivery charges, and any additional costs arising from shipper’s, consignee’s, carrier’s, customs’ or terminal’s requirements shall be charged separately at actual cost. | This states that costs arising from circumstances of customs, shipper, consignee, carrier, or terminal will be invoiced separately at actual cost. |
| When describing briefly | Any unforeseen or third-party charges not included in this quotation shall be charged separately at actual cost. | This means unforeseen costs or third-party charges not included in the quotation will be charged separately at actual cost. |
| When including delivery changes | Additional delivery charges, waiting time, re-delivery, vehicle change, and handling charges caused by delivery site conditions shall be charged separately at actual cost. | This covers waiting time, re-delivery, and vehicle change due to consignee’s conditions as actual cost separately. |
| When including free time excess charges | Demurrage, detention, storage, and any free time excess charges shall be charged separately at actual cost if incurred. | This applies Demurrage, Detention, Storage, and free time excess charges as actual cost separately if they occur. |
However, even in English, just stating “actual cost separately” may be insufficient. It is preferable to specify the applicable costs as concretely as possible.
How “actual cost separately” is applied in accidents and claims
The wording “actual cost separately” is checked not only for additional cost disputes but also during accidents or claims.
For example, if additional costs for re-delivery, inspection, re-packing, or storage arise after a cargo accident, the issue becomes who bears these costs.
If the quotation states something like “Inspection fees, re-delivery charges, and storage fees in case of accidents will be separately discussed or charged at actual cost depending on the cause,” it makes it easier to explain that not everything was included at the time of quotation.
Also, in import FCL cases, if Demurrage or Detention occurs due to customs clearance delays, whether “actual cost separately” is mentioned in the quotation becomes important documentation for negotiating cost responsibility.
“Actual cost separately” is a cost-protection clause that should be documented before any accident occurs.
Common problematic cases in practice
| Case | Common Issue | Documents to Check | Practical Notes |
|---|---|---|---|
| Disputes over customs inspection fees | Whether inspection attendance fees, drayage, unpacking/repacking fees are included in the customs clearance-inclusive quotation is disputed. | Quotation, customs clearance request, customs inspection notice, inspection cost breakdown, invoice | Customs inspection fees, inspection attendance fees, unpacking/repacking fees, and drayage fees should be stated as actual cost separately. |
| Disputes over Demurrage and Detention | Who bears charges caused by customs delay, delayed pickup, or late container return is disputed. | Quotation, Free Time terms, pickup records, container return records, shipping line invoices | Demurrage, Detention, and free time excess charges should be stated as actual cost separately when incurred. |
| Disputes over consignee waiting charges | Waiting charges when the truck cannot be received at the consignee’s site and must wait for a long time become problematic. | Delivery instructions, consignee conditions, driver waiting records, delivery company invoices | Waiting charges due to consignee’s circumstances should be stated as actual cost separately. |
| Disputes over re-delivery charges | Re-delivery fees arise due to consignee absence, delivery outside reception hours, or inability to unload. | Delivery instructions, delivery records, return-to-origin records, re-delivery invoices | Re-delivery and return-to-origin fees should be stated as actual cost separately when incurred. |
| Disputes over vehicle changes or transshipment to smaller vehicles | Costs for unloading to a smaller vehicle because a large vehicle cannot enter the consignee’s premises are disputed. | Consignee guidance, vehicle requirements, delivery company response, transshipment cost breakdown | Additional costs due to vehicle restrictions or consignee conditions should be stated as actual cost separately. |
| Local cost changes after quotation validity expired | Local agent fees, port charges, and shipping line charges change from the time of quotation. | Previous quotation, local agent invoices, shipping line charge notices, revised quotations | Cost changes after the quotation validity should be treated as actual cost separately or require re-quoting. |
| Disputes over re-packing and storage fees after accidents | Who temporarily bears costs for inspection, re-packing, storage, and re-delivery after an accident is disputed. | Accident photos, Survey Report, storage fee breakdown, re-packing cost breakdown | Additional work costs at the time of accident should be separately discussed or charged at actual cost according to the cause. |
| Disputes over official agency procedure fees | Additional procedure fees arise for quarantine, food sanitation, pharmaceuticals law, chemical substance regulations, etc. | Agency notices, inspection instructions, permits and approvals, customs broker invoices | Costs for official procedures and inspection response should be stated as actual cost separately when incurred. |
Verification Checklist
| Verification Situation | Party to Confirm With | Items to Confirm | Action if Problems Arise |
|---|---|---|---|
| When preparing a quotation | Sales representative, operations staff | Costs included in the quote, costs not included, and extra actual costs if incurred | List not only "actual costs extra" but specifically enumerate the applicable costs. |
| When including import customs clearance | Shipper, customs broker, operations staff | Standard customs clearance fees, customs inspection, quarantine, other regulatory checks, possibility of additional procedures | Separate the standard customs clearance fee from inspection and government agency handling costs. |
| When including domestic delivery | Shipper, delivery company, delivery destination | Delivery destination address, reception hours, vehicle requirements, unloading conditions, possibility of waiting or redelivery | List waiting charges, redelivery fees, and vehicle change fees due to delivery destination circumstances as actual costs extra. |
| When handling FCL import | Shipper, shipping company, delivery company, operations staff | Free Time, Demurrage, Detention, return deadline, planned container pickup date | Clearly state that free time overrun charges are actual costs extra. |
| When setting quotation validity period | Sales representative, operations staff, overseas agent | Freight rates, surcharges, exchange rates, local costs, shipping company charges may fluctuate | Changes after the validity period should be handled by re-quoting or treating as actual costs extra. |
| When an accident or claim occurs | Shipper, insurance company, carrier, warehouse, delivery company | Redelivery, inspection, repacking, storage charges, cause of accident, liability relationships | Verify the cause of occurrence and organize for separate discussion or actual cost invoicing. |
| When including overseas agent costs | Overseas agent, sales representative, operations staff | Local charges, port fees, inspection fees, local storage charges, additional work costs | Unconfirmed costs incurred locally should be treated as actual costs extra. |
| When explaining quotation conditions to shipper | Shipper, sales representative | What is included in the quotation and what is actual costs extra | Explain the applicable costs and reasons so as not to create the impression of "charging anything later." |
Forwarder's Scope of Involvement
| Situation | What Can Be Supported | What Should Not Be Asserted | Practical Notes |
|---|---|---|---|
| Explaining quotation conditions | Explain the separation between standard costs and extra actual costs | Explain that "With actual costs extra, anything can be charged" | Explain the applicable costs, reasons for occurrence, and billing basis. |
| Customs inspection costs | Inform about possible attendance fees, horizontal transport, unpacking, and repacking associated with customs inspections | Explain that inspection costs are always included if customs clearance fees are included | Separate standard customs clearance fees from inspection-related costs. |
| Demurrage / Detention | Explain Free Time, container return deadlines, and the possibility of overrun charges | Explain that no additional charges apply even if the free time is exceeded | Confirm reasons for delays in pickup or container return. |
| Domestic delivery | Explain the separation between normal delivery charges and extra costs caused by delivery destination circumstances | Explain that all waiting time, redelivery, vehicle changes, and special work are included in regular delivery charges | Confirm delivery destination requirements in advance. |
| Accident / claim situations | Organize storage fees, redelivery charges, inspection costs incurred after an accident | Unconditionally assert that all post-accident costs are borne by the shipper or forwarder | Confirm cause of occurrence, insurance coverage, carrier liability, and quotation conditions. |
| English quotations | Enumerate applicable costs covered by actual cost and explain clearly | Assume that "actual cost separately" alone is sufficient | Clarify applicable costs and conditions for occurrence also in English. |
Example 1: Trouble Regarding Customs Inspection Charges
In an import cargo quotation, the forwarder presented ocean freight, D/O Fee, import customs clearance fee, and domestic delivery charges. However, the quotation did not mention customs inspection charges at all.
After the import declaration, customs inspection was conducted, and charges for attendance, horizontal transport, unpacking, and repacking occurred. The forwarder billed the shipper for these as actual costs, but the shipper claimed, "Because the quotation included the customs clearance fee, I assumed inspection handling was also covered."
In reality, the normal customs declaration fee and the labor, attendance fees, and horizontal transport fees associated with customs inspection are separate types of costs. In this case, if the quotation had stated "Customs inspection charges, inspection attendance, unpacking and repacking fees, and horizontal transport fees are extra actual costs if incurred," explaining this to the shipper would have been easier.
At the time of the quotation, it is unknown whether an inspection will occur. However, explicitly listing these possible charges in advance helps prevent disputes later.
Example 2: Dispute over Demurrage and Detention
For an import FCL shipment, the quotation listed ocean freight, D/O Fee, import customs clearance fee, and domestic delivery charges. However, there was no mention of Demurrage, Detention, or Free Time overrun charges.
After cargo arrival, delays in customs documentation and delayed acceptance at the delivery destination led to late container pickup and return. As a result, the shipping company invoiced Demurrage and Detention fees.
The forwarder charged these shipping company fees to the shipper as actual costs, but the shipper argued, "Because the quotation included delivery, I thought container-related costs were included."
In this case, if the quotation had stated "Demurrage, Detention, Storage, and Free Time overrun charges are actual costs extra if incurred," it would have been easier to explain the separation between standard charges and excess fees.
Example 3: Dispute over Waiting Charges at Delivery Destination
In domestic delivery of imported cargo, the quote simply stated "domestic delivery charge." The shipper understood this as a request for regular delivery, but at the actual delivery destination, the reception hours were limited, and the consignee was not ready to receive the cargo upon arrival.
The truck had to wait for a long time, and the delivery company charged a waiting fee. When the freight forwarder billed the shipper for the waiting fee, the shipper claimed, "I thought it was included in the delivery charge."
In this case, if the quote had included a statement such as "waiting fees, redelivery charges, return fees, and vehicle change fees due to consignee circumstances will be charged separately based on actual costs when they occur," it would have been easier to explain the nature of the additional charges.
Domestic delivery charges are costs based on regular delivery and do not necessarily include waiting or redelivery caused by consignee circumstances.
Common Misunderstandings
| Common Misunderstanding | Actual Understanding | Practical Notes |
|---|---|---|
| "Actual cost extra" means the forwarder can charge anything additionally later | "Actual cost extra" is a condition to settle costs that cannot be confirmed at the time of quoting at actual amounts when they occur. | Specifically explain the relevant costs and reasons for their occurrence. |
| Just writing "actual cost extra" once is sufficient | Writing only one phrase makes it hard for the shipper to understand what actual costs refer to. | List examples such as customs inspection fees, storage fees, Demurrage, Detention, waiting fees, etc. |
| If customs clearance fee is included, inspection fees are also included | Regular customs declaration fees and attendance fees, hauling, unpacking costs related to customs inspections are separate. | List customs fees and inspection-related fees separately. |
| If delivery charge is included, waiting fees and redelivery are also included | Regular delivery charges and waiting, return, redelivery fees caused by consignee circumstances can be separate costs. | State consignee-related costs as actual cost extra. |
| Demurrage and Detention are forwarder's costs | The responsible party varies depending on the cause. If caused by customs delays, document issues, or consignee reasons, the shipper may be liable. | Confirm Free Time, cargo removal date, return date, and the cause of occurrence. |
| "Actual cost extra" is an unfriendly term for shippers | If the applicable costs are specified, it actually serves as an explanation to inform shippers of cost risks in advance. | A clear list is more important than vague phrasing. |
| If it’s actual cost, the forwarder doesn’t need to explain | Even if it's actual cost, the reason for occurrence and billing basis must be explainable. | Keep records such as invoices, shipping line details, delivery company details, and inspection reports. |
| All post-accident costs can be handled by insurance | Some costs are excluded from insurance, subject to deductibles, unclear liability, or outside insurance coverage. | Check separately for insurance, carrier liability, and actual cost extra conditions. |
Practical Points to Note
"Actual cost extra" is not a phrase that allows a freight forwarder to freely add charges later. It is an important condition to notify the shipper in advance that costs that cannot be confirmed at the time of quoting may be invoiced at actual amounts when they occur.
When using "actual cost extra," it is necessary to list the applicable costs as specifically as possible. By clearly stating items such as customs inspection fees, storage fees, Demurrage, Detention, waiting fees, redelivery charges, and consignee-related costs, misunderstandings with the shipper can be reduced.
Also, even when invoicing under "actual cost extra," it is essential to be able to explain the reasons for the costs, the billing basis, third-party billing details, and the relationship with the shipper’s circumstances. "Actual cost extra" functions as a risk management clause to organize cost burden and responsibility in advance.
Summary
"Actual cost extra" is a quotation term indicating the possibility of invoicing costs separately at actual amounts if occurrence or cost cannot be confirmed at the time of quoting.
Customs inspection fees, storage fees, Demurrage, Detention, waiting fees, redelivery charges, consignee-related costs, and local charges are difficult to include in the normal total estimate and tend to be disputed regarding the responsible party depending on the cause of occurrence. Therefore, it is important to specifically list applicable costs in the quote rather than only writing "actual cost extra."
For freight forwarders, stating "actual cost extra" is not only for the purpose of recovering additional charges but is a basic risk management practice to explain potential cost risks to shippers in advance and to clarify cost burden and responsibility.
