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Knowledge on settlement of ocean shipping related expenses

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Knowledge on settlement of ocean shipping related expenses

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  • Time of issue:2024-01-13
  • page views:1835

Knowledge on settlement of ocean shipping related expenses

  • Categories:problem
  • Author:
  • Origin:
  • Time of issue:2024-01-13
  • page views:1835
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                                                                       一、Various freight forwarding miscellaneous fees that shippers need to know about 

       In addition to the "pure" freight, sea freight prices also include various miscellaneous fees. Some of these miscellaneous fees are charged by shipowners, some by the terminals at the port of shipment/destination, and others are charged by freight forwarders under names they themselves create. Moreover, many fees have no clear standards and are very flexible. In addition to being charged to the shipper, some fees are also charged to the consignee. This can easily lead to two pitfalls: first, some freight forwarders charge excessive fees under pretexts; second, freight forwarders adjust and transfer some fees between the consignee and the shipper. 

Generally, when a shipper finds a freight forwarder, the shipper is the client, and the freight forwarder will try to lower the fees to please the shipper, thus charging less, but then overcharging the customer (consignee) at the destination port to make up for the shortfall, and vice versa. This is why, for the same batch of goods, if we use CIF terms and find our own freight forwarder, the fees are relatively low; but if we use FOB terms and the customer designates the freight forwarder, the RMB miscellaneous fees are much higher. Knowing these inside facts, we understand that we must not covet temporary benefits and think that the lower the price, the better. Instead, we must determine the composition of the price in advance to prevent some unscrupulous freight forwarders from randomly charging fees or passing them on to customers after shipment, which will affect our relationship and cooperation with customers. First of all, we ourselves must have a certain understanding of the composition of shipping and miscellaneous fees, and learn to distinguish between "industry-standard" charges and arbitrary charges.。 

Common incidental expenses include: 


  1. ORC:OriginReceivingCharge起运港码头附加费; 
  2. DDC:DestinationDeliveryCharge目的港提货费; 
  3. THC:TerminalHandlingCharge码头操作(吊柜)费; 
  4. BAF:BunkerAdjustedFactor燃油附加费,或称FAF(FuelAdjustedFactor); 
  5. CAF:CurrencyAdjustmentFactor货币贬值附加费; 
  6. DOC:Document文件费; 
  7. PSS:PeakSeasonSurcharge:旺季附加费; 
  8. AMS:AmericaManifestSystem(美国舱单系统)。 


 


二、CIC cost


CIC fee is the abbreviation of container imbalance charge, which means "container imbalance surcharge" in Chinese. It is also translated as "equipment management fee" by some people. The main reasons for the formation of this CIC fee are as follows: The seasonal changes in cargo transportation on various liner routes around the world lead to unbalanced cargo flow: Western countries usually have a slack season for cargo transportation at the beginning of the year. The number of containers gradually increases in April and May, and the volume of trade starts to rise. There will be another small peak in trade volume before Christmas. The trade volume between countries or regions at both ends of the route is unbalanced: East Asian countries such as China export much more goods to Europe than they import from Europe to East Asian regions such as China. A similar significant problem exists in the Far East-North America route. The differences in the types and nature of imported and exported goods, as well as the differences in freight and handling fee standards, also cause the imbalance of imported and exported containers.   

     

In fact, the CIC fee is another hegemonic fee following the EBS fee. However, currently, the liner ships for China's exports are all controlled by various shipping company alliances. In order to earn greater profits, these shipping companies continue to add exorbitant fees and miscellaneous charges. Moreover, China's exporters are in a weak position, and under such circumstances, they have no choice but to accept the unreasonable price adjustments by the shipping companies.


三、CFS feesCFS (CONTAINER FREIGHT STATION) is a place for handling LCL (Less than Container Load) cargo. It handles the handover of LCL cargo, and after consolidation and stowage, sends the containers to CY (Container Yard). It also receives imported containers from CY, unpacks them, tallies the goods, stores them, and finally distributes them to respective consignees. Additionally, it can perform tasks such as sealing containers and issuing dock receipts upon the carrier's entrustment.CFS fees are usually calculated based on per cubic meter. Since CFS fees are incurred due to LCL shipments, they occur at both the port of shipment and the port of destination. Under FOB terms, the CFS fee is listed separately and charged to the exporter or factory (because FOB is freight collect, so the fees at the port of shipment are not included in the freight). Under CIF terms, the CFS fee at the port of shipment is already included in the sea freight quoted by the freight forwarder, so no separate CFS fee is charged at the port of shipment. However, the importer still needs to pay the CFS fee at their end (the port of destination).       
四、EBS fee

Emerent Bunker Surchanges,

Its Chinese meaning is Emergency Bunker Surcharge. This fee is generally due to the continuous rise in international crude oil prices, which exceeds the affordability of shipowners. Therefore, when the market is relatively sluggish and shipowners cannot increase sea freight, they add this fee to reduce cost losses.
How much is EBS usually charged? EBS is only a temporary surcharge, which generally does not last for a long time, and the charge of EBS varies according to different periods and different destinations.
Do I need to pay EBS for FOB? The answer is no. EBS is a surcharge on sea freight and does not belong to FOB local fees, so customers do not need to pay EBS when doing FOB. However, at present, some shipping companies, because they cannot collect this fee from customers, pass on EBS to FOB customers. If customers encounter shipping companies or freight forwarders requiring to collect EBS, they can try to negotiate with customers and ask them to bear this fee.


五、LOCAL CHARGE (Local Fees)

   

Local Charge includes the following points (the specific fee is for reference only and has no practical significance):

Booking fee: Generally, RMB290/20', RMB420/40'GP/HQ.

Customs declaration fee: RMB100 -120/serving (if there are N goods for one shipment, then the total customs declaration fee is 100N. In addition, if there are more than 5 goods names, there will be an additional fee for each additional 5 goods. We pay the customs broker this RMB30/+5 goods names).

THC: RMB370/20', RMB560/40'GP/40'HQ(paid to the port terminal).

Document fee: (Shipping company charges RMB115/BILL).

Operating fee: RMB150-200(generally available for delivery on arrival, but not available for pre-payment).

AMS: USD25/RMB210 (US-Canada line).

Card towing fee (depends on where it is),: There are other periods of luggage storage. For general Phase 4 suitcases (such as Yong **/An **), RMB100/CONTAINER will be added, and RMB200/CONTAINER will be added to the Phase 4 and Phase 5 terminals.

LOCAL CHARGE literally translates as "local fee". Generally refers to other expenses incurred in the "other country" in addition to international air (sea) freight. These include: customs declaration fees, inspection and quarantine fees, documentation fees, security inspection fees, storage fees, door-to-door pick-up (delivery) fees and other fees. However, customs taxes and fees of the "other country" are generally not included.

In the commonly used terms FOB and CIF, for my country's import and export enterprises, Local Charge is generally not generated.

Export CIF, Local Charge is borne by the consignee of the other country.

Import FOB and Local Charge are borne by the shipper of the other country.

Local CHARGE will occur only when goods are transported door-to-door, port-to-door, and door-to-port goods.

For example: import EXW and the factory picks up the goods. Local CHARGE from the time the manufacturer in the other country picks up the goods until the goods are shipped is borne by our country's importers.

Export DDU or DDP, fee paid to the designated destination. Local CHARGE that occurs from the time the goods arrive at the port of the other country until they are delivered to the place designated by the consignee must be borne by our country's exporters

               

六、Cost Bearing Among Several Trade Methods 

 1.  Ex Works (EXW = Ex Works):   Place of delivery: Factory or warehouse in the exporting country;Transportation: Responsible by the buyer;Insurance: Responsible by the buyer;Export procedures: Responsible by the buyer;Import procedures: Responsible by the buyer.

 2. Free on Board (FOB = Free on Board):  Place of delivery: Port of shipment;Transportation: Responsible by the buyer;Insurance: Responsible by the buyer;Export procedures: Responsible by the seller;Import procedures: Responsible by the buyer. 

3. Cost, Insurance and Freight (CIF = Cost + Insurance + Freight):  Place of delivery: Port of shipment;Transportation: Responsible by the seller;Insurance: Responsible by the seller;Export procedures: Responsible by the seller;Import procedures: Responsible by the seller.

 4. Cost and Freight (CFR = Cost + Freight):  Place of delivery: Port of shipment;Transportation: Responsible by the seller;Insurance: Responsible by the buyer;Export procedures: Responsible by the seller;Import procedures: Responsible by the buyer.

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