What is THC? Who pays the terminal handling charge

What THC means

THC — Terminal Handling Charge — is the fee the terminal operator collects for moving a container within the port area.

The work it covers varies by port but generally includes: bringing the container into the yard, moving it within the stacking area, loading it onto or discharging it from the vessel by crane, and other in-yard movements.

This charge is separate from freight. Freight is the payment for the vessel carrying the cargo from one port to another. THC is payment for the work done at the terminal at each end. Both arise on the same shipment and are priced separately.

It arises separately at origin and at destination

A container passes through two terminals, and is therefore handled twice:

• OTHC — handling at the port of loading (Origin THC)
• DTHC — handling at the port of discharge (Destination THC)

The two amounts are independent of each other; each terminal has its own tariff. On a given route, OTHC may be low and DTHC high. When getting a quote, it is necessary to ask specifically which one is included.

Who pays

There is no single answer to this question, because two separate documents speak to it.

The sales contract and the Incoterms term determine which party the cost belongs to. The contract of carriage determines who is actually invoiced in practice.

The two usually align, but not always. The most frequent dispute arises under the C-group rules (CPT, CIP, CFR, CIF). Under these rules the seller pays freight up to the destination; whether the destination terminal charges are included in the freight depends on the contract of carriage. If this is not stated explicitly in the contract, both parties tend to attribute the item to the other party on arrival.

The practical solution is simple: writing a single sentence into the sales contract such as “destination terminal charges belong to the buyer” settles the dispute before it can arise.

Other local charges alongside THC

When comparing quotes, THC alone is not enough. The local-charges group typically also includes:

Item	What it is for
THC	Handling at the terminal
Delivery order fee	Issuing the delivery instruction
Documentation fee	Bill-of-lading issuance and processing
ISPS	Port security
Storage (demurrage at the yard)	Waiting in the yard beyond the free time
Container cleaning	Pre-return cleaning, depending on the line

The total of these items can approach the freight itself on short routes. On long routes it shrinks proportionally but is still not a sum to dismiss.

Why a low freight rate can be misleading

There is a well-known pricing tactic in the industry: quote a low freight rate and make up the difference through local charges. The offer looks cheap on paper, but the total cost turns out high.

The only way to guard against this is to compare quotes door-to-door and inclusive of all items. Three questions to ask:

1. Does this price include OTHC? Does it include DTHC?
2. Will the delivery order, documentation and ISPS fees be invoiced separately?
3. Is there any other item that might arise at destination?

Once these answers are obtained in writing, two quotes become genuinely comparable.

Common mistakes

Comparing freight alone. The most common and most costly mistake. The freight difference between two quotes can be small next to the difference in local charges.

Not budgeting for DTHC. The destination charge is often only learned after the shipment has already departed. Asking for the exact route-specific amount upfront removes the surprise.

Writing the Incoterms term but not the cost allocation. Especially under CIF and CFR, who bears the destination terminal charges must be stated in the contract.

Confusing THC with storage charges. THC is payment for handling and arises once. Storage depends on waiting time and increases day by day. The two are different items.