Explainer
Ocean Freight Charges and Surcharges, Explained
Decode an ocean freight quote — base ocean freight, BAF, CAF, THC, documentation and the other line items that make up the real landed cost of a container.
An ocean freight quote is rarely a single number. Open one up and you find a stack of abbreviations — BAF, THC, ENS, ISPS — each adding to the total. Understanding them helps you compare quotes fairly and avoid surprises at destination. Here is what the common line items mean.
The base ocean freight
This is the core cost of moving your container from the origin port to the destination port. It is set by the shipping line and swings with supply and demand on the trade lane. On busy routes during peak season it can change week to week. Everything else on the quote sits on top of this.
Fuel and currency adjustments
- BAF (Bunker Adjustment Factor) — a surcharge that tracks the cost of marine fuel. When oil prices move, BAF moves with them.
- CAF (Currency Adjustment Factor) — covers exchange-rate fluctuation when the freight is billed in a currency different from the line’s costs.
These exist so carriers can quote a stable base rate and adjust separately for volatile inputs.
Terminal and handling charges
- THC (Terminal Handling Charge) — the cost of moving your container around the port terminal: unloading from the truck, stacking, loading onto the vessel. Charged at both origin and destination.
- ISPS / Security — a port security fee under international maritime security rules.
- Documentation / B/L fee — for issuing the bill of lading and processing paperwork.
Customs and regulatory filings
- ENS (Entry Summary Declaration) — an advance cargo declaration required for shipments to Europe.
- AMS / ISF — equivalent advance filings for the United States. Missing or late filings here can mean fines, so they matter.
Charges that appear at destination
This is where importers get caught out. Depending on your Incoterm, some charges land on you at the destination:
- Destination THC — terminal handling at the arrival port.
- Demurrage and detention — penalties if you are slow to collect your container or return the empty. These can escalate quickly.
- Customs clearance and duties — handled by your broker, plus the actual import duty and tax.
- Delivery order and last-mile — releasing and trucking the container to your door.
How to compare quotes properly
Two quotes can look very different and cost the same — or look identical and differ by hundreds of dollars once destination charges are added. When comparing:
- Ask whether the quote is all-in or port-to-port only.
- Confirm which charges fall at destination under your Incoterm.
- Check what is excluded — duties and taxes usually are.
The bottom line
The base ocean freight is only part of the story. A trustworthy forwarder breaks the quote down clearly, tells you which charges hit at each end, and flags the ones — like demurrage — that are within your control. If a quote looks suspiciously low, the difference is almost always waiting at destination.