Is THC Included in the Quotation?
Interlink編集部What Is THC?
THC stands for Terminal Handling Charge, a charge related to the handling of container cargo at terminals.
For import FCL, after containers are unloaded from the vessel and managed at the CY or terminal, handling by the shipping line, NVOCC, terminal, and other parties occurs before cargo delivery or CY gate-out. THC may be invoiced by the shipping line or NVOCC as a local charge associated with such terminal handling.
However, even if the invoice specifies THC, the amount may not necessarily match the direct charge from the terminal. The shipping line or NVOCC may set THC as a local charge according to their own pricing structure.
In import quotations, THC may be included in the base price, or it may be separately invoiced upon arrival based on terms such as “shipping line charges separate,” “import charges separate,” or “actual costs settled upon arrival.” Therefore, THC is an important cost item to confirm when reviewing import FCL quotation scope.
Scope Covered in This Article
This article explains THC arising in import FCL shipments, including the subject of the charge, place of occurrence, billing party, inclusion in quotations, separate billing, and final cost responsibility.
| Item | Content Covered in This Article | Content Covered in Other Articles |
|---|---|---|
| Meaning of THC | Positioning as a local charge related to terminal handling | Work processes at individual terminals, cost composition, and port tariff systems |
| Origin THC and Destination THC | Distinction between export-side charges and import-side charges | Export-side local charges in export FCL quotations |
| Inclusion in Quotations | Interpreting whether THC is included, shipping line charges are separate, or actual-cost settlement applies | Overall evaluation of quotation display handled in “What Is an All-in Quotation?” |
| Relationship with Door Delivery | Distinguishing the delivery scope from shipping line local charges | Delivery, devanning, and return scope covered in “What Is a Door Delivery Quotation?” |
| Difference from D/O Fee | Distinction between terminal handling costs and cargo-release procedure costs | Issuance and exchange fees discussed in “Who Bears the D/O Fee?” |
| Cases Involving NVOCC | Confirmation of House B/L-side costs and shipping line-side costs | NVOCC liability and the legal relationship between House B/L and Master B/L |
| Relationship with Incoterms | Practical cost-allocation tendencies under FOB, CFR, CIF, DAP, and DDP | Overall Incoterms cost allocation, risk transfer, and customs obligations |
| Demurrage / Detention | Difference in the nature of these charges compared with THC | Time-dependent overrun charges discussed in “Who Is Responsible for Demurrage?” and related articles |
What Costs Does THC Cover?
THC generally refers to charges related to terminal handling of containers. However, in practice, it is necessary to confirm not only who performs which tasks but also the billing structure used by the shipping line or NVOCC.
| Item to Confirm | Details to Check | Reference Documents | Common Misunderstandings | Practical Measures |
|---|---|---|---|---|
| Cost Name | Terms such as THC, DTHC, OTHC, and Terminal Handling Charge | Quotation, Arrival Notice, invoice | Determining the place of occurrence or billing party based only on the name | Check both the place of occurrence and the billing party |
| Place of Occurrence | Whether it is on the export or import side | Export quotation, import-charge breakdown | Confusing Origin THC with Destination THC | Verify the port, route, and whether the charge relates to the export or import side |
| Billing Party | Whether the charge was set or billed by the shipping line, NVOCC, or freight forwarder | Arrival Notice, third-party charge details | Assuming all freight forwarder charges are its own service fees | Distinguish the origin of the charge from the billing route |
| Calculation Unit | By B/L, by container, by container size, or on another basis | Tariff sheets, billing details | Assuming the same THC description always means the same amount | Confirm conditions for 20-foot, 40-foot, and other container types |
| Quotation Scope | Whether it is included in the base quotation, an import charges package, or the All-in scope | Quotation, approval emails | Assuming it is automatically included in ocean freight or Door Delivery | Confirm specifically which charges are included and which are separate |
Origin THC and Destination THC
THC can be divided into Origin THC, incurred at the export location, and Destination THC, incurred at the import destination. In Japan, Destination THC is often the issue in import FCL quotations and Arrival Notices.
| Category | Main Place of Occurrence | Main Meaning | Typical Billing Recipient | Points to Note on Cost Responsibility |
|---|---|---|---|---|
| Origin THC | Export port, CY, terminal | Charges related to terminal handling before and during loading at the export location | May be billed to the overseas shipper, exporter, or overseas freight forwarder | May be included in the product price or export quotation |
| Destination THC | Import port, CY, terminal | Charges related to terminal handling of containers discharged at the import destination | May be billed to the importer, consignee, or import-side freight forwarder | May be charged separately from ocean freight as an import-destination charge |
| OTHC | Export side | Abbreviation for Origin THC | Sometimes shown in export-side quotations and invoices | Do not rely on the abbreviation alone; check the applicable port |
| DTHC | Import side | Abbreviation for Destination THC | Sometimes shown in import-side Arrival Notices and related billing documents | Confirm whether it will be billed separately as an import-destination charge |
| THC Only | Varies by document | May be shorthand that omits either Origin or Destination | The meaning depends on the issuer of the quotation or invoice | Confirm the place of occurrence, applicable port, and export or import side |
Difference Between THC and D/O Fee
Both THC and D/O Fee are local charges commonly billed by shipping lines or NVOCCs at the import destination, but they relate to different services.
| Comparison Item | THC | D/O Fee | Common Points to Confirm | Practical Notes |
|---|---|---|---|---|
| Main Subject of the Charge | Container handling at the terminal | Issuance or exchange of the Delivery Order and cargo-release procedures | Billing party, quotation inclusion, and calculation unit | Both may appear as import charges but remain separate cost items |
| Main Place of Occurrence | Export or import side | Primarily the import destination where cargo release occurs | Applicable port and B/L | THC requires distinction between Origin and Destination |
| Main Billing Party | Shipping line, NVOCC, freight forwarder | Shipping line, NVOCC, freight forwarder | Whether the charge is a third-party actual cost or the freight forwarder’s own fee | The same billing party may invoice charges of different legal and operational character |
| Quotation Presentation | THC, DTHC, shipping line charges, or import charges | D/O Fee, Delivery Order Fee, or import charges | Breakdown within a lump-sum amount | Check for duplication where charges are presented as a package |
| Relationship with Delay Charges | Normally not a time-dependent overrun charge | Normally not a time-dependent overrun charge | Distinction from Demurrage and other time-related charges | Do not confuse basic charges with additional charges caused by delay |
Separate Stages of THC Setting, Billing, and Final Cost Responsibility
The setting of THC, billing of the charge, temporary payment, and final economic burden are separate stages.
| Stage | Meaning | Main Parties | Reference Documents | Practical Considerations |
|---|---|---|---|---|
| Charge Setting | The shipping line or NVOCC establishes THC as a charge item | Shipping line, NVOCC | Tariff sheet, Arrival Notice | The amount may differ from the terminal’s direct charge |
| Third-Party Billing | The shipping line or NVOCC bills its contractual counterparty | Shipping line, NVOCC, freight forwarder, importer | Invoice, local-charge details | The invoice recipient alone does not determine the final cost bearer |
| Temporary Payment / Advance | The freight forwarder or another party pays first to enable cargo release | Freight forwarder, customs broker, importer | Payment records, advance details | Advances must be distinguished from the payer’s own service fees |
| Billing under the Logistics Contract | The cargo owner is billed under the quotation and service terms | Freight forwarder, cargo owner | Quotation, order, emails | Confirm whether the charge was included or expressly treated as separate |
| Final Economic Burden | The final cost bearer is determined under the sales contract and other applicable agreements | Seller, buyer, importer, or another contractually responsible party | Sales contract, Incoterms, settlement records | The temporary payer and final cost bearer may differ |
Sources of THC and Billing Patterns
| Source / Billing Pattern | Main Billing Party | Nature of the Charge | Documents to Confirm | Practical Points |
|---|---|---|---|---|
| Shipping Line Origin | Shipping line, shipping line agent, freight forwarder | THC established by the shipping line | Master B/L-side Arrival Notice, shipping line billing details | The freight forwarder’s invoice may represent a shipping line charge advanced on behalf of the customer |
| NVOCC Origin | NVOCC, NVOCC agent, freight forwarder | NVOCC local charge arising under the House B/L | House B/L, NVOCC Arrival Notice, charge details | The amount may differ from the shipping line THC |
| Freight Forwarder Advance | Freight forwarder | Temporary payment of shipping line or NVOCC charges | Third-party invoices, payment records, advance breakdown | Separate the amount advanced from the freight forwarder’s handling fee |
| Import Charges Package | Freight forwarder, NVOCC, customs broker | THC, D/O Fee, and other import charges presented as a package | Quotation breakdown, import-charge details | Confirm whether THC is included and avoid duplication with a separate invoice |
| Actual-Cost Settlement upon Arrival | Freight forwarder, NVOCC, shipping line | Settlement of charges finalized after vessel arrival | Quotation terms, Arrival Notice, invoices | Confirm whether the quoted amount was an estimate, fixed amount, or capped amount |
| Mixed with Freight Forwarder Fees | Freight forwarder | Combination of third-party THC and the freight forwarder’s handling, remittance, or administrative fees | Billing breakdown, tariff sheet, quotation | Where presented as one line, request separation of each charge component |
How to Distinguish Shipping Line THC, NVOCC Charges, and Freight Forwarder Fees
| Check Point | Typical Indication of Shipping Line THC | Typical Indication of NVOCC Charges | Typical Indication of Freight Forwarder Fees | How to Verify |
|---|---|---|---|---|
| Issuing Document | Shipping line Arrival Notice | NVOCC Arrival Notice | Freight forwarder tariff or quotation | Compare House B/L-side and Master B/L-side documents separately |
| Relevant B/L | Master B/L | House B/L | Individual booking reference or freight forwarder invoice item | Confirm which B/L number the charge relates to |
| Description | Shipping line name, DTHC, Destination THC | NVOCC name, Local Charge, or DTHC | Handling fee, remittance fee, or arrangement fee | Check the issuer as well as the charge description |
| Amount | Matches the shipping line statement | Matches the NVOCC statement | Difference from the third-party amount or an independently established fee | Request the breakdown where a difference exists |
| Invoice-Line Separation | Shown separately as a shipping line actual cost | Shown separately as an NVOCC local charge | Shown separately as the freight forwarder’s own fee | Request a separated breakdown where charges are combined |
Cases Where THC Is Included in or Charged Separately from the Quotation
| Quotation Description | Basic Treatment of THC | Likelihood of Inclusion | Possibility of Separate Charge | Points to Confirm |
|---|---|---|---|---|
| THC Included | THC is included in the quoted amount | High | Possible if the shipping line, port, or container conditions change | Confirm whether the charge is Origin or Destination THC and verify the calculation basis |
| DTHC Included | Destination THC is included | High | Other shipping line charges may remain separate | Confirm the scope of local charges other than DTHC |
| Shipping Line Charges Included | Shipping line local charges are included | Relatively high | NVOCC charges or condition-change adjustments may remain separate | Confirm the specific shipping line charges included |
| Import Charges Package | Multiple import-destination charges are presented as a lump sum | THC may be included in the package | THC may still be treated as a separate shipping line actual cost | Check the detailed package breakdown |
| All-in | Charges within a defined scope are aggregated | Likely if THC is expressly listed | Possible if shipping line or NVOCC actual costs are excluded | Confirm the All-in scope and exclusions |
| Door Delivery | The delivery scope to a specified destination is identified | THC may be included if part of an import charges package | Possible if shipping line charges are separate | Separate inland-delivery costs from import-destination local charges |
| Shipping Line Charges Separate | Shipping line actual costs are settled separately | Usually not included in the base quotation | THC is likely to be invoiced separately | Confirm representative shipping line charge items |
| Actual-Cost Settlement upon Arrival | The confirmed amount is settled after arrival | The quotation may include only an estimate | The difference between the estimate and confirmed amount may be charged | Confirm whether the quotation was an estimate, fixed amount, or capped amount |
Relationship with Incoterms
Incoterms are important for confirming cost allocation between the seller and buyer, but the use of the charge name “THC” does not by itself determine the responsible party.
Even under the same rule, such as CIF or DAP, actual cost responsibility varies according to the destination-charge scope of the seller’s transport contract, the logistics quotation, and the billing conditions. Origin THC and Destination THC must therefore be distinguished.
| Trade Term | Typical Responsibility for Main Freight Charges | Practical Tendency for Destination THC | Documents / Contracts to Confirm | Common Misunderstanding |
|---|---|---|---|---|
| FOB | The buyer normally arranges and bears the main carriage | Tends to be borne by the buyer or importer | Buyer-side freight forwarder quotation, Arrival Notice | Confusing export-side costs with import-destination costs |
| CFR | The seller bears ocean freight to the port of destination | May be charged to the buyer | Seller’s transport contract, import-destination billing details | Assuming that DTHC is included whenever ocean freight is included |
| CIF | The seller arranges ocean freight and the required cargo insurance cover | May be charged to the buyer or importer | Sales contract, transport contract, Arrival Notice | Assuming the seller bears all Japan-side charges |
| DAP | The seller arranges transport to the specified place | May be included in the seller’s freight or billed locally | Door Delivery quotation, scope of local charges | Assuming every charge up to the specified place is unconditionally included |
| DDP | The seller bears a broad range of transport and import costs | Contractually more likely to be treated as the seller’s responsibility | Sales contract, importer details, advance and settlement conditions | Assuming the invoice recipient is the final cost bearer |
Cross Matrix for Determining THC Quotation, Billing, and Cost Responsibility
Responsibility for THC should be determined by cross-checking the charge name, quotation wording, type of THC, billing party, charge origin, and prior explanation.
| Type / Situation of THC | Quotation Description | Billing Party / Charge Origin | Prior Explanation / Documentation | Likely Cost Allocation |
|---|---|---|---|---|
| Destination THC | DTHC Included | Shipping line | No change in the relevant shipping line or container conditions | Generally treated as included in the quotation |
| Destination THC | Shipping Line Charges Separate | Shipping line | Representative items including THC were explained in advance | Separate billing of the actual cost to the importer is easier to support |
| Destination THC | Shipping Line Charges Separate | Shipping line | No detailed explanation of separately chargeable items | Confirm the contractual billing basis and prior explanation before allocating the charge |
| NVOCC THC-Equivalent Charge | Import Charges Package | NVOCC | The package breakdown includes THC | Treat it as included in the package unless a separate THC relates to a distinct service |
| Shipping Line THC and NVOCC Charges | Both Charged Separately | Shipping line and NVOCC | House B/L-side and Master B/L-side services were explained in advance | Both charges may exist for different services, but duplication must be checked |
| THC Combined with Freight Forwarder Fees | THC Charged Separately | Freight forwarder | No prior explanation of the freight forwarder’s fee | Separate the third-party actual cost from the freight forwarder’s own fee |
| THC Increase after Shipping Line Change | THC Included | Replacement shipping line | A price-adjustment clause applies to the change | Allocate the difference according to the reason for the change and the quotation’s adjustment conditions |
| Billing Party and Charge Location Unclear | Import Charges Separate | Unknown | No Arrival Notice or third-party statement | Withhold acceptance of the full charge until supporting documentation is provided |
Decision Flow When Receiving a Charge
- Check the billed charge item. Confirm whether it is described as THC, DTHC, OTHC, or Terminal Handling Charge.
- Confirm the place of occurrence. Verify whether it is Origin THC or Destination THC.
- Confirm the cargo subject to the charge. Cross-check the B/L number, container number, vessel, route, and port.
- Confirm the billing party. Identify whether the charge is billed by the shipping line, NVOCC, or freight forwarder.
- Confirm the charge origin. For a freight forwarder invoice, determine whether the amount is a third-party actual cost, the freight forwarder’s own fee, or a combination.
- Confirm inclusion in the quotation. Check whether THC is included, whether shipping line charges are separate, or whether it forms part of an import charges package.
- Check the amount and calculation unit. Verify whether the charge is calculated by B/L, container, size, or another basis.
- Check for duplicate billing. Confirm overlap with the All-in amount, import charges package, or NVOCC charges.
- Confirm Incoterms and the sales contract. Verify the final cost allocation between seller and buyer.
- Determine the final cost bearer. Distinguish the invoice recipient, temporary payer, logistics contractual payer, and sales contractual payer.
Common Misunderstandings
| Common Misunderstanding | Actual Understanding | Practical Points to Note |
|---|---|---|
| THC is included because ocean freight has been paid. | Ocean freight and THC may be established as separate charges. | Check the quotation and Arrival Notice for THC. |
| Under CIF, Destination THC in Japan is always borne by the seller. | Even under CIF, Destination THC may be charged to the buyer. | Confirm which destination charges are included in the seller’s transport contract. |
| THC and D/O Fee are the same charge. | THC relates to terminal handling, while D/O Fee relates to cargo-release procedures. | Separate and verify the import-charge breakdown. |
| An All-in quotation always includes THC. | Whether THC is included depends on the defined All-in scope. | Confirm exclusions for shipping line and NVOCC actual costs. |
| A Door Delivery quotation automatically includes THC. | Door Delivery indicates delivery scope and does not itself determine inclusion of shipping line charges. | Verify inland-delivery charges separately from import-destination charges. |
| THC billed by the freight forwarder is the freight forwarder’s own markup. | The freight forwarder may have advanced or passed through a shipping line or NVOCC charge. | Distinguish third-party charge details from the freight forwarder’s service fees. |
| The description THC identifies where the charge arose. | THC alone may not show whether it is Origin THC or Destination THC. | Confirm the relevant port and export or import side. |
| The same charge name from the shipping line and NVOCC always means duplicate billing. | The House B/L and Master B/L sides may involve different services despite using the same charge name. | Confirm the charging party and specific service covered by each charge. |
Common Practical Issues
| Case | Potential Issue | Documents to Check | Practical Measures |
|---|---|---|---|
| Destination THC Was Charged under CIF Terms | The buyer assumed the seller covered all Japan-side costs | Sales contract, Arrival Notice, transport contract | Separate ocean freight from import-destination charges |
| THC Was Charged Separately after an All-in Quotation | It is unclear whether THC was included in or excluded from the All-in scope | Quotation breakdown, exclusions, invoice | Map each cost item to the quotation scope |
| Shipping Line Charges Were Billed Separately under a Door Delivery Quotation | Delivery scope was confused with cost scope | Door Delivery quotation, Arrival Notice | Separate inland-delivery costs from local charges |
| THC-Equivalent Charges Appeared from Both the Shipping Line and NVOCC | It is unclear whether the charges relate to different services or are duplicated | House B/L, Master B/L, both Arrival Notices | Confirm the charging party and service covered by each amount |
| THC and Freight Forwarder Fees Were Combined into One Line | Third-party actual costs cannot be distinguished from the freight forwarder’s own fees | Third-party statements, invoice breakdown, tariff sheets | Separate the third-party actual cost from the freight forwarder’s own fees |
| The Shipping Line Changed after a THC-Inclusive Quotation | It is unclear who bears the resulting price difference | Quotation assumptions, change notice, revised quotation | Confirm the reason for the change and applicable price-adjustment conditions |
| THC and DTHC Were Invoiced as Separate Items | It is unclear whether they are distinct charges or duplicate entries | Tariff sheets, invoice details, Arrival Notice | Cross-check the place of occurrence, calculation unit, and service covered |
| THC Inclusion in an Import Charges Package Was Unclear | Both a package amount and separate THC may have been invoiced | Package breakdown, invoice, approval emails | Create a charge-mapping table and check for duplication |
Decision Checklist
| Verification Stage | Party to Confirm With | Items to Confirm | Action If Issues Are Found |
|---|---|---|---|
| When Agreeing the Sales Terms | Seller, buyer | Incoterms and import-destination cost allocation | Specify Origin and Destination charges clearly in the contract |
| When Requesting a Freight Quotation | Freight forwarder, NVOCC | Inclusion of THC, DTHC, D/O Fee, and other local charges | Request an itemized quotation or package breakdown |
| When Approving the Quotation | Quotation issuer | Shipping line charges, import charges, and actual-cost settlement terms | Replace vague lump-sum wording with specific charge items |
| When Selecting the Shipping Line and Route | Freight forwarder, shipping line | Applicable shipping line, port, and container size | Confirm how price changes will be handled if the assumptions change |
| When the House B/L Is Issued | NVOCC, freight forwarder | Contents of NVOCC local charges | Confirm their relationship with Master B/L-side charges |
| Upon Receipt of the Arrival Notice | Shipping line, NVOCC | Type and amount of THC, applicable B/L, payment deadline | Resolve differences from the quotation before cargo pickup |
| Upon Receipt of the Invoice | Billing party | Charge items, unit prices, quantities, and container numbers | Cross-check the invoice against the relevant cargo |
| When Reviewing an Advance | Freight forwarder, customs broker | Third-party statements, amount advanced, and the freight forwarder’s own fees | Request a breakdown separating actual costs and service fees |
| When Duplicate Billing Is Suspected | Shipping line, NVOCC, freight forwarder | Overlap among House B/L-side charges, Master B/L-side charges, and package amounts | Identify the service provider and service corresponding to each charge |
| At Final Settlement | Seller, buyer, importer, accounting personnel | Difference between the temporary payer and final cost bearer | Settle the charge between the parties under the sales contract |
Scope of Freight Forwarder Involvement
The freight forwarder’s responsibilities for explaining and billing THC should be assessed under the standard five-role framework, taking account of its contractual position and actual scope of engagement.
| Category | Support Typically Provided | What Should Not Be Asserted | Practical Measures |
|---|---|---|---|
| Simple Intermediary | Relay THC terms and amounts from the shipping line or NVOCC | That third-party charges automatically become the cargo owner’s responsibility | Identify the source, scope of intermediation, and third-party nature of the charges |
| Cargo Transportation Service Provider | Present a quotation covering the transport segment and applicable local charges | That it must absorb every charge outside the agreed scope | Specify included charges, separate charges, and settlement terms for condition changes |
| NVOCC / House B/L Issuer | Explain its own local charges arising under the House B/L | That shipping line THC and NVOCC charges are always identical | Separate House B/L-side charges from Master B/L-side charges |
| Door-to-Door Single Contractor | Provide an integrated quotation covering international transport, import charges, customs-clearance coordination, and delivery | That exceptional costs such as shipping line changes are included without conditions | State the applicable charge items, assumed shipping line, and price-adjustment conditions |
| Agent / Coordinator for Specific Operations | Handle Arrival Notice confirmation, advances, and cost reconciliation | That it can determine the final cost bearer under the sales contract | Define the principal, authority to make advances, settlement method, and fees |
Ancillary tasks such as advances, cost reconciliation, and document handling are specific operations attached to one or more of the five roles and do not constitute a separate sixth category.
For Simple Intermediary and Agent / Coordinator for Specific Operations arrangements, the scope of responsibility may not be fully defined by transport documents alone. Quotations, framework agreements, individual instructions, and standard trading conditions should therefore clarify advances, fees, scope of responsibility, liability limits, payment deadlines, and notice deadlines.
However, issuing an FCR alone does not automatically incorporate standard trading conditions into the contract. Prior presentation and agreement through the quotation, framework agreement, individual instruction, or another contractual process should be confirmed.
Scenario 1: The Buyer Assumed CIF Made the Seller Responsible for Destination THC
The buyer purchased goods under CIF terms and was informed that the seller had arranged ocean freight and insurance.
After vessel arrival, the Japan-side Arrival Notice included Destination THC, D/O Fee, and other import charges, which the import-side freight forwarder billed to the buyer. The buyer disputed the charges, arguing that CIF made the seller responsible for Japan-side Destination THC.
The conclusion should not be based solely on the CIF rule. It is necessary to verify whether the seller’s transport contract included Destination THC and whether destination charges were incorporated into the sales price. Origin THC and Destination THC must also be distinguished.
Scenario 2: Both the Shipping Line and the NVOCC Charged THC-Equivalent Fees
A House B/L was issued for the imported cargo, and the NVOCC Arrival Notice included THC. The import-charge breakdown also listed a terminal-handling-related charge from the shipping line.
The cargo owner suspected duplicate billing, while the NVOCC explained that its House B/L-side local charge and the shipping line charge arising on the Master B/L side related to separate services.
Duplication should not be concluded from the charge name alone. Confirm the party imposing each charge, the applicable B/L, the service provided, and the quotation scope. Different services may support both charges, but both Arrival Notices should be reconciled because a duplicated transcription or billing entry remains possible.
Scenario 3: THC Charged Separately after an All-in Quotation
The cargo owner approved an All-in quotation covering ocean freight, import charges, customs clearance, and drayage. THC was nevertheless invoiced separately after vessel arrival.
The freight forwarder explained that the All-in quotation covered its own handling charges and that shipping line actual costs remained separate. The cargo owner understood that THC was already included within the quoted import charges.
The issue should not be decided from the All-in label alone. Review the quotation breakdown, exclusions for shipping line actual costs, explanations of representative additional charges, and previous transaction practice. If THC was already included in the import charges package, the separate invoice may be duplicative.
Scenario 4: THC Increased after a Shipping Line Change
The quotation included THC based on a specified shipping line and route. After booking, the shipping line was changed because of space availability.
The replacement shipping line imposed a higher Destination THC, and the freight forwarder invoiced the difference to the cargo owner. The cargo owner objected on the basis that the THC-inclusive quotation was fixed.
Confirm who decided the change, whether the cargo owner approved it, and whether the quotation contained a price-adjustment clause for changes in the shipping line or route. The key issue is not merely that the actual charge increased, but whether the original quotation was fixed or conditional on specified assumptions.
Quotation Terms That Should Be Clearly Defined
- Whether THC is included in the quotation or charged separately
- Whether the charge is Origin THC or Destination THC
- Whether DTHC is included in the import charges package
- How shipping line charges, NVOCC charges, and freight forwarder fees are classified
- How charges shown on the Arrival Notice will be settled
- Whether THC is included within the All-in scope
- Whether shipping line local charges are included in a Door Delivery quotation
- Who bears Destination THC under CIF, CFR, and similar terms
- The relationship between House B/L-side and Master B/L-side charges
- Price adjustments following a change in shipping line, route, port, or container size
- Whether the quotation is fixed, estimated, capped, or subject to actual-cost settlement
- Whether freight forwarder fees are added to third-party THC
The quotation should specify the applicable charges and settlement method using wording such as “Destination THC included,” “THC charged separately,” “shipping line charges separate,” “charges shown on the Arrival Notice settled at actual cost,” or “NVOCC local charges separate.”
Points for Cargo Owners
Cargo owners should not assume that payment of ocean freight means Destination THC is included in the quotation.
Even under CIF or CFR, Destination THC, D/O Fee, and other import-destination charges may be billed to the buyer or importer. Import costs should therefore be reviewed using the total landed cost, rather than only the product price and ocean freight.
A charge should not be accepted solely because it is labelled THC. Confirm whether it is Origin or Destination THC, who issued it, which B/L and container it relates to, and whether it was included in the quotation.
Points for Freight Forwarders
Freight forwarders should explain clearly whether THC is included in the quotation or will be billed separately as a shipping line or NVOCC actual cost.
General wording such as “shipping line charges separate” or “import charges separate” may not enable a cargo owner with limited import experience to anticipate THC. Representative charges such as THC and D/O Fee, together with billing timing and settlement method, should be identified.
The invoice should separate shipping line THC, NVOCC local charges, advances, and freight forwarder fees as far as reasonably possible and explain the relationship between House B/L-side and Master B/L-side charges.
Summary
THC is a charge related to the handling of container cargo at terminals. It may be included in an import FCL quotation or billed separately as a shipping line charge, NVOCC charge, import charge, or actual cost settled upon arrival.
The first step is to distinguish Origin THC from Destination THC. Although THC billed to an importer in Japan is often Destination THC, the applicable port, billing party, and B/L should be confirmed rather than relying on the abbreviation alone.
It is then necessary to determine whether THC was included in the quotation, billed separately as a shipping line or NVOCC actual cost, or combined with the freight forwarder’s own fees. The expressions All-in and Door Delivery do not by themselves establish that THC is included.
Where both the shipping line and NVOCC impose THC-equivalent charges, House B/L-side and Master B/L-side services must be separated and checked for duplication.
Final cost responsibility depends on the quotation terms, billing party, Incoterms, sales contract, and actual arrangement. Cargo owners should verify the total landed cost including import-destination charges, while freight forwarders should clarify the type of THC, inclusion scope, separate-charge conditions, and billing basis from the quotation stage onward.
