Terminal Handling Charges: A terminal is a designated area for container storage within the port. Upon arrival of the containers at the port either by road carrier/rail carrier or ocean mode of transport, standard containers require mechanized equipment, such as movable gantry cranes or reach stackers, for lifting and relocation. The port imposes a fee for handling these containers, commonly referred to as Terminal Handling Charges.
Who will be responsible for the terminal handling charges?
The responsibility for terminal handling charges, whether borne by the exporter or importer, is determined by the Incoterms 2020 conditions. These charges must be paid at both the origin and destination ports.
Various Types of Material Handling Equipment Essential for Ports, CFS, and ICD in Container Management:
Material handling equipment refers to mechanized systems designed for lifting containers at ports, container freight stations, or inland container depots.
MHE used at Sea Ports:
- Fixed Position Gantry Crane.
- Movable Gantry Crane.
MHE used at CFS/ICD:
- Reach Stacker.
Demurrage: Demurrage refers to an additional fee charged for the space occupied by goods, including containers, within a port when they remain beyond the allotted free time.
- Demurrage charges have to be paid to the port.
- Demurrage charges have to be paid to mainline shipping companies.
Note: Free time can vary between ports or CFS/ICD (for example free time 7 days) and mainline shipping companies (for example free time 10 days).
Responsibility for demurrage charges is determined by the Incoterm 2020 conditions agreed upon between the seller and the buyer.
Detention: Once the delivery order is released and the container is enroute to the importer's warehouse, the mainline shipping company requires that the empty container be returned within a specified timeframe—for example 72 hours, although this can vary by company. If the importer fails to return the empty container within the designated period, the shipping company will impose a fee known as detention charges.
Frequently Asked Questions
1. Terminal handling charges will be same across all sea ports or do they vary?
Answer: It varies from port to port.
2. What is a common cause of demurrage?
Answer: One of the primary causes is delays in customs procedures.
3. What is a common cause of detention?
Answer: Delays in unloading or intentional failure to return the container within the allotted free time are significant contributors.
4. When does the free time period commence for demurrage?
Answer: The free time period begins once the cargo within the container arrives at the port, terminal, Container Freight Station (CFS), or Inland Container Depot (ICD).