THC is one of the common surcharges in international trade, all import and export goods are subject to this surcharge. It can help us to more accurately project the shipping cost of a shipment. So what is THC fee? And how is the collection of THC fees in Vietnam? Let's find out with giaphapdonggoi.net!
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1. What is the THC fee?
The full name of THC is Terminal Handling Charge, which means the loading and unloading surcharge at the port, which is a surcharge collected on each container to offset the cost of cargo handling activities at the port. For example, charges for loading and unloading containers of goods from the ship, fees for transporting containers from the pier to the yard, port labor fees, yard costs, port management fees, etc.
Before 1990, shipping lines used to charge gross freight for transportation, handling and other related costs. And then, THC fee was separated from sea freight to:
Increases transparency of those fees, so cargo owners can see how much they need to pay to the shipping line and how much to charge for cargo handling at the port of loading and unloading.
Helped to protect shipping lines from currency fluctuations, as this cost at the port is paid by the port operator in local currency, while ocean freight is charged in US dollars.
In fact, many exporters have complained about shipping lines that by charging THC fees, they have transferred the shipping line's commercial risks to them. And there is a big difference between the amount collected from the customer and the amount that the shipping line has to pay to the port, which is suspected to be not transparent because no shipping line has officially announced that they have to pay for the port. How much does the specific port cost for a container.
2. How is the collection of THC fees in Vietnam?
In Vietnam, international shipping lines have started to apply THC fee when separating THC from sea freight since mid-2007 and with different application time for shipping lines.
The first is the Far Eastern Shipping Lines Association (FEFC), although not through negotiations with Vietnam, they have unilaterally applied THC collection since May 1, 2007.
Next, the Red Sea Freight Association (IRFA) has also announced the application of THC fee separation in Vietnam from July 1, 2007 with the fee of 65 USD/TEU and 98 USD/FEU. And this fee has been increased to 85 USD/TEU and 115 USD/FEU from August 1, 2008.
Next is the Intra-Asian Shipowners' Association (IADA), they have also negotiated with the Container Handling Charge (THC) Negotiating Council (THC) in Vietnam on the separation of THC fees from sea freight with the time from the 1st. June 2007. THC charges apply initially at 50/USD 20 feet container and 75 USD/40 foot container and will be implemented at 60 USD/ 20 feet container and 90 USD/ 40 foot container from 1 January 2008. And the following is a table of the constituent costs of THC in Vietnam given by IADA.
The Vietnam Container Loading and Unloading Charge (THC) Negotiating Council also encountered strong reactions to the application of THC toll collection in Vietnam, including representatives of the Vietnam Chamber of Commerce and Industry and 7 associations with exported goods. container imported from Vietnam (Textile Association, Footwear Association, Fisheries Association, Cashew Association, Coffee-Cocoa Association, Electronic Association, Tea Association).
Goods owners in Vietnam argue that THC charges have increased costs for exporters. According to the ship owners, when separating the THC fee from the freight rate, in fact, the shipping company has reduced the freight rate, so it will not affect the goods owner.
Although opinions are different, most shipping lines in Vietnam charge THC fees separate from sea freight for imported and exported goods.
As for domestic shipping containers, the gross freight is still applied, although there is a proposal to separate the surcharges from the sea freight like for import and export goods.
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3. Classification of THC fee
Today, THC fees are divided into 2 types of fees including:
Terminal Handling Charge (THC): handling charge at the port for each container. This cost is calculated according to the number of containers of the shipping vessel. For the purpose of paying for the loading and unloading of goods at the port. At that time, the ship owner will have to pay the loading and unloading fee to the port to make up for this fee. The ship owner recovers from the customer the THC surcharge.
Handling fee: This fee is used to pay and maintain the worldwide dealer network. In order to maintain the connection network between transport units in the world into a common information network, helping the exchange and receipt of goods take place quickly and conveniently. The carrier must pay such as telephone charges, documents, papers, ... and other costs. To cover these costs, shipping companies are required to collect a handling fee from the customer's fee.
So through the above article, surely everyone has found answers to questions about what THC fee is in import and export? Good luck!
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