Understanding the fees involved in shipping logistics is vital for exporters and importers to ensure transparency and fair transactions. While most fees are legitimate and necessary, hidden charges and erroneous fees are burdened with unexpected costs that reduce profits. In this blog, we explore the fees typically associated with shipping, shed light on hidden fees that may arise after cargo shipment or port arrival, and provide strategies to avoid these hidden fees.
Notable Costs Related to shipping logistics:
1) Ocean Freight Charges: This is the base charge for transporting goods via the ocean, determined by factors like distance, cargo volume, and shipping routes. Full container loads (FCL) usually have a fixed charge while Less than Container Load (LCL) are charged on the basis of volume and weight.
2) Port Charges: Fees levied by ports for services which can be broken down further into:
a. Terminal Handling Charges (THC): Fees incurred for the handling of containers at the port, unloading and loading of material, access to terminal labour and equipment
b. Documentation Fees: Charges associated with preparing and processing necessary documents, such as the bill of lading, certificate of origin, delivery order etc.
c. Palletisation of goods- Palletisation of goods is done to secure goods from any damage. Usually, palletisation comes at an extra cost levied by the carrier
3) Insurance: Cargo insurance is one of the most important costs for an importer or exporter providing cover against multiple risks that the shipment might face in its journey.
4) Customs Duties and Taxes: Charges imposed by customs authorities for the import and export of goods, Customs duty can be broken down further into:
a. Basic Custom Duty
b. Additional Custom Duty
c. Other duties (Anti-dumping duty, education cess etc.)
5) Customs Clearance Fee: This is known as custom brokerage which is paid to the customs broker (CHA) for arranging and filing of all paperwork necessary for customs clearance of your cargo. Contact experts at Trigon today and avail competitive pricing for your customs clearance needs.
6) Delivery Charges: Fees for transporting goods from the port to the importer’s/exporter’s designated location, dependent on distance and mode of transportation.
7) Other Charges: There are some other charges that the importer/exporter might incur depending on their needs and the nature of the shipment. These can be:
a. Demurrage and detention charges: Usually occur when cargo remains at the port beyond its free storage period date
b. Customs inspection fees: These usually occur if customs authorities deem it necessary to inspect your shipment. This could be for reasons such as checking of declaration of goods or checking for any harmful objects in your shipment
c. Bill of lading amendment: Occurs when B/L needs to be amended to make any changes to the original B/L
d. Switch Bill of Lading- Occurs when a second set of B/L is issued to replace the original B/L
e. Chassis Usage Fees: Cost occurs when utilizing chassis for transporting containers from the port
While these costs cover a large part of the shipping logistics bill, there might still be additional and hidden costs particular to your shipping requirements. Avoiding such extra fees can be easily done by accessing authentic sources of information or hiring experts who can help you navigate around these hidden costs.
Avoiding Hidden or Fake Fees:
1) Transparent Communication: Establish clear communication with freight forwarders, and seek written confirmation of all fees and services upfront
2) Contract Review: Pay close attention to the contract’s terms and conditions to make sure they accurately reflect the fees and services that were agreed upon.
3) Research and Comparison: Conduct thorough research, comparing rates and fees across freight forwarders to identify significant discrepancies
4) Seek Recommendations: Consult with trusted industry professionals to gain insights and recommendations regarding reputable freight forwarders adhering to ethical and industry best pricing practices
Our experts at Trigon provide upfront and transparent information pertaining to all your shipping needs. To date, we have helped hundreds of clients save lakhs in hidden shipping fees. Contact us today for a consultation on the number +91-7838599524
