The THC fee in shipping — the Terminal Handling Charge — is what ocean carriers and terminal operators bill to cover moving your container between the ship and the terminal yard. At most ports, it runs roughly $100 to $200 per twenty-foot container and $200 to $500 or more per forty-foot container, though rates vary by port, carrier, and container type. It appears as a separate line item on nearly every ocean freight invoice, and which party pays it — shipper or consignee — depends on the Incoterms written into the sales contract.
What the Charge Pays For
The bulk of THC pays for the heavy equipment that gets containers on and off a vessel. Ship-to-shore gantry cranes lift boxes from the deck onto the quay, and yard tractors or straddle carriers then move each container to a stacking area. That equipment is expensive to buy, fuel, and maintain, and terminals recoup those costs across every container they handle.
The charge also funds the administrative side of moving cargo through the gate: checking bill of lading details, updating the terminal operating system so each container is tracked in real time, and coordinating stacking positions based on destination or pickup schedule. When a container enters or leaves, the operator generates an Equipment Interchange Receipt documenting its number, condition, and stacking position.
Port security sits inside this fee as well. Terminals must comply with the International Ship and Port Facility Security (ISPS) Code, and many pass those costs through as a component of THC or break them out as a separate “Terminal Security Charge.” Either way, the money covers surveillance, access control, cargo scanning, and personnel.
How THC Shows Up on Your Invoice
Labeling isn’t consistent. You may see “THC,” “OTHC” (Origin Terminal Handling Charge), “DTHC” (Destination Terminal Handling Charge), or “Terminal Handling Service — Origin” and “Terminal Handling Service — Destination.” In some Latin American trade lanes, the same charge goes by “Capatazia.”
Federal regulations require ocean carriers to state each terminal charge separately in their published tariffs, so you have a right to see the number itemized rather than folded into an all-in freight rate.1Office of the Law Revision Counsel. 46 USC 40501 – Automated Tariffs Before you accept a freight quote, walk through every line. If it just says “all-in,” ask for a breakdown. Once a carrier releases cargo and you try to dispute after the fact, your leverage drops.
Origin, Destination, and Transshipment
THC splits by where the handling happens. Origin THC covers everything at the port of departure: receiving your container at the gate, moving it to the yard, and loading it onto the vessel. It’s normally invoiced in the local currency of the loading port.
Destination THC is the mirror. When the vessel arrives at the discharge port, the terminal unloads your container, stacks it in the yard, and makes it available for pickup by truck or rail. Because labor costs, equipment age, and congestion differ from port to port, origin and destination THC on the same shipment are often different amounts.
Transshipment THC applies when your container transfers between vessels at an intermediate hub. In hub-and-spoke networks, a large vessel drops boxes at a regional hub where they’re loaded onto smaller feeder ships for final delivery. That double handling generates its own charge, and it’s one of the hidden costs that can inflate a quote on indirect routing.
What Drives the Dollar Amount
Container size is the most obvious variable. A twenty-foot equivalent unit (TEU) costs less to handle than a forty-foot box because it takes less yard space, less crane time, and weighs less on average. Most carrier tariffs publish separate rates for 20-foot, 40-foot, and 40-foot high-cube containers.
Refrigerated containers cost more. Reefers need continuous electrical hookups, temperature monitoring, and dedicated stacking areas with power outlets. The premium runs roughly 30 to 50 percent above standard dry container rates, and some terminals add a flat surcharge on top of that percentage. Oversized cargo, open-top containers, and hazardous materials shipments also attract higher fees because of the specialized handling and compliance steps involved.
Less-than-container-load (LCL) shipments work differently. Instead of a flat charge per box, the terminal prices LCL handling by weight or volume, whichever yields the higher number. Because LCL cargo must be individually sorted, inspected, and consolidated or deconsolidated, the per-unit cost tends to run higher than the equivalent share of a full container load.
Geography matters too. Ports in Southeast Asia and Northern Europe tend to charge lower THC than ports in the United States, Australia, and parts of Africa. Within a single country, a congested gateway will charge more than a quieter regional terminal. Individual carriers and operators set their own schedules, typically reviewed annually, and congestion surcharges can spike rates further during peak seasons.
Who Pays: Incoterms and THC
Whether the buyer or the seller owes THC comes down to the Incoterms rule in the sales contract. Incoterms are a set of internationally recognized rules published by the International Chamber of Commerce that spell out who pays for what at each stage of shipment.2International Trade Administration. Know Your Incoterms Picking the wrong term, or leaving it vague, is one of the fastest ways to end up in a billing dispute at the port.
Under Ex Works (EXW), the seller’s job ends at their loading dock, and the buyer pays everything from that point on, including origin THC, ocean freight, and destination THC. Under Free on Board (FOB), the seller covers all costs through loading the cargo onto the vessel, so the seller pays origin THC and the buyer takes destination.2International Trade Administration. Know Your Incoterms
Cost, Insurance, and Freight (CIF) pushes seller obligations further: the seller prepays ocean freight and insurance to the destination port. Even under CIF, though, the buyer usually handles destination THC and all costs after arrival. At the other end of the range, Delivered Duty Paid (DDP) puts nearly everything on the seller, including import duties and transport to the buyer’s door. Under DDP, the seller covers both origin and destination terminal charges, though the buyer may still owe unloading costs at final delivery if those aren’t already built into the seller’s transport contract.
These obligations need to be spelled out clearly in the commercial invoice and shipping instructions. When neither party pays destination THC because each assumed the other would, the carrier holds the cargo. Storage charges start accruing, often daily, and the container sits in the yard until someone settles the bill.
THC Is Not Demurrage or Detention
New shippers routinely confuse THC with demurrage and detention, but they work on completely different triggers. THC is a flat, predictable charge for moving your container through the terminal. Demurrage and detention are penalty fees for being slow.
Demurrage kicks in when your container sits inside the terminal past the allotted free time after discharge. The carrier gives you a window, often a few days, to pick up your box. Miss it and you pay a daily rate for every extra day the container occupies yard space. Detention starts after you’ve taken the container out. If you hold the carrier’s equipment at your warehouse too long before returning it empty, detention charges accrue for each day past the allowed period.
The distinction matters because demurrage and detention are governed by tighter federal rules. Under 46 U.S.C. § 41104, every demurrage or detention invoice must include specific information — container availability dates, free time start and end dates, the applicable daily rate, and a certification that the carrier’s own delays didn’t cause the charges.3Office of the Law Revision Counsel. 46 USC 41104 – Common Carriers Under the FMC’s final billing rule, carriers must issue those invoices within 30 calendar days from when charges stop accruing, must give you at least 30 days from the invoice date to request a fee reduction or waiver, and cannot set a payment due date earlier than 30 days after issuance.4Federal Register. Demurrage and Detention Billing Requirements Those specific protections apply to demurrage and detention, not to THC itself. But knowing which category a charge falls into tells you which rules govern it.
Checking the Published Tariff
In the United States, ocean carrier tariffs fall under the jurisdiction of the Federal Maritime Commission. Under 46 U.S.C. § 40501, every common carrier must maintain a publicly accessible, automated tariff showing all rates, charges, classifications, and rules between every point on its route. The statute specifically requires carriers to state each terminal or other charge separately rather than hide it inside a lump-sum rate.1Office of the Law Revision Counsel. 46 USC 40501 – Automated Tariffs You can look up any carrier’s published THC before you book.
The implementing regulation, 46 CFR Part 520, requires tariffs to be available electronically and prohibits NVOCCs (non-vessel-operating common carriers) from marking up terminal charges above the cost passed through from the ocean carrier.5eCFR. 46 CFR Part 520 – Carrier Automated Tariffs If you suspect a middleman is inflating a terminal charge, the published tariff is where you check.
Rate increases must be published at least 30 days before they take effect. Rate decreases can take effect immediately upon publication.1Office of the Law Revision Counsel. 46 USC 40501 – Automated Tariffs
Disputing a THC Charge
If a carrier has billed you for a charge that violates the Shipping Act — an inflated THC, an unjustified surcharge, or a demurrage invoice missing required information — you can file a charge complaint directly with the FMC by emailing chargecomplaints@fmc.gov with the carrier’s name, the provision of 46 U.S.C. § 41104(a) or § 41102 you believe was violated, and supporting documents like invoices, bill of lading numbers, and proof of payment.6Federal Maritime Commission. Guidance on Charge Complaint Interim Procedure Commission staff reviews the submission, contacts the carrier for a response, and refers violations to the FMC’s Office of Enforcement.
A few limits apply. The process only covers charges assessed on or after June 16, 2022, and it doesn’t apply to charges from marine terminal operators (unless billed on behalf of a carrier), charges that haven’t been invoiced yet, or charges on cargo loaded or discharged at non-U.S. ports.6Federal Maritime Commission. Guidance on Charge Complaint Interim Procedure If you want to pursue your own case, you can file a formal complaint under 46 U.S.C. § 41301(a).
Ways to Reduce What You Pay
You can’t eliminate THC, but you can manage it. Negotiating volume-based service contracts is the most direct lever. Carriers are authorized to offer time-volume rates under 46 U.S.C. § 40501(d), so per-container THC can drop as your committed volume rises.1Office of the Law Revision Counsel. 46 USC 40501 – Automated Tariffs
Choose your port of entry strategically. If your inland destination is served by more than one gateway, compare the total landed cost — THC plus drayage plus rail — rather than the ocean freight rate alone. A port with lower THC but higher drayage to your warehouse may not actually save money. Consolidating LCL shipments into full container loads whenever possible avoids the per-unit handling premium that makes LCL disproportionately expensive at the terminal.
Get the Incoterms right before you sign the purchase order. The difference between FOB and CIF can shift hundreds of dollars in terminal charges from one party to the other, and leaving the term ambiguous almost guarantees a dispute when the cargo arrives. Spell it out, confirm it on the commercial invoice and bill of lading, and make sure your freight forwarder knows who’s paying what at each end.