Terminal Handling Charges (THC) have always been a point of confusion for shippers. Ports perform the work—lifting containers, moving equipment, and managing storage—yet the invoice is issued by the shipping line. This raises a common question:
If THC is a terminal fee, why can’t shippers pay the terminal directly?
To answer this, we must understand the nature of THC, how the industry’s contractual structure works, and why this cost remains in the hands of carriers.
1. What Exactly Are Terminal Handling Charges (THC)?
Terminal Handling Charges (THC) cover the basic container operations at the port, including:
Loading and unloading
Internal trucking or shuttling
Basic storage
Forklift handling and lashing
Port labor and equipment usage
In short, THC is the fee for moving your container within the port area, from storage yard to ship (or the other way around).
THC vs. Terminal Operation Package Fee
Many ports publish a terminal operation package that includes broader categories like port dues, security fees, and administrative charges.
Terminal package fee → Port → Shipping line
THC → Shipping line → Shipper
THC is essentially a subset of the terminal’s operation cost, focused solely on container activities.
For example, data from Shanghai Port shows:
20GP terminal operation fee: 506–560 RMB
Carrier THC for the same container: 1060–1400 RMB
The gap is significant, which leads to the next question.
2. Why Do Shipping Lines Charge THC Instead of Ports?
The reason for this “price gap” is complex and rooted in long-standing industry practices.
(1) Contractual Structure: Shippers Contract With Carriers, Not Ports
In ocean shipping, the service contract is between the shipper and the carrier. The port acts as the carrier’s subcontractor.
This brings several advantages:
Shippers have one point of accountability
Claims, delays, and handling issues go to the carrier—not the port
The carrier manages the port relationship internally
Just like booking a hotel on a platform, you pay the platform, not the hotel.
(2) Efficiency: Centralized Billing Reduces Operational Complexity
If ports charged every shipper directly:
Ports would need to invoice thousands of small customers
Shippers would deal with multiple parties for the same shipment
Costs and disputes would rise
Carriers consolidate these charges into one invoice, making the system far more manageable.
(3) Carriers Treat THC as “Collect & Pass-Through + Margin”
The price difference does contain:
Administrative overhead
Customer service cost
Documentation and billing labor
Profit margin or buffer for market fluctuations
Carriers often use THC to offset low freight rates.
For years, freight rates were pushed down through competition, so THC became a flexible pricing tool.
(4) Market Power: Top Carriers Control 84.8% of Global Capacity
With such high concentration, shippers lack the bargaining power to challenge THC levels.
Some carriers also add extra surcharges such as:
Port congestion charges
Equipment management fees
Terminal access surcharges
Often overlapping with THC—but difficult to negotiate.
3. Can Ports Charge THC Directly in the Future?
In theory, yes. In practice, it’s extremely difficult.
A rare example exists:
Dubai’s Jebel Ali Port: THC Direct-Billing Reform
In 2023, the Dubai Maritime Authority (DMA) enforced new regulations:
Carriers and forwarders cannot charge THC
Ports (DP World) bill shippers directly
Transparent rates published through Dubai Trade platform
For example:
20GP: 700 AED
40GP: 1100 AED
Hazardous cargo: +50%
This eliminated hidden markups and standardized pricing.
But implementing this model worldwide faces several obstacles:
(1) Contractual Redesign Needed
The entire shipping contract structure would need to be rewritten:
Bill of Lading terms
Liability distribution
Subcontracting rules
This affects shippers, forwarders, carriers, and ports.
(2) Carriers Will Resist Losing Their “Profit Buffer”
Removing THC revenue would likely cause:
Higher base ocean freight rates
New surcharges
Additional service fees
Ultimately, shippers may still pay the same total amount.
(3) Ports Cannot Handle Direct Billing at Scale
Ports would need to instantly upgrade:
IT systems
Billing processes
Customer service operations
For small-volume shippers, the cost of direct billing may exceed the revenue generated.
(4) Industry Habits Are Deeply Rooted
The carrier-led THC system has been in place for over 20 years.
Reforming this model requires global coordination, which is extremely difficult.
4. The Real Issue Isn’t “Who Charges THC”—It’s Transparency
The global logistics industry is increasingly demanding:
Transparent fee structures
Clear service-to-cost matching
Accurate billing
No duplicate or hidden surcharges
This means the solution is not simply transferring THC to the port, but creating:
THC public tariff filing
Standardized cost breakdown
Surcharge consolidation
Transparent pricing mechanisms
What shippers truly want is fairness—not necessarily a new invoicing entity.
สรุป
Port workers do the physical work, but carriers issue the bill because of:
Contractual relationships
Efficiency in billing
Market power
Historic industry design
Profit strategies
While some ports like Jebel Ali have introduced direct-billing reforms, a global shift remains unlikely.
