Terminal Handling Charges (THC): Meaning and Calculation

Terminal Handling Charges (THC): Meaning and Calculation

Understanding Terminal Handling Charges in Shipping

Terminal handling charges are the mandatory fees collected by a seaport or airport operator for moving cargo through the yard. The charge covers the physical work and yard-side admin that happens between the gate and the ship or plane: lifting boxes on and off trucks, stacking, positioning, weighing, security checks, and handoffs to the vessel. These activities keep the operations safe and sequenced so your shipment meets its window without delays. If you are sending goods inside standard shipping containers, the charge will appear on your quote alongside origin and destination line items. So, what is “terminal handling charges”? To put it shortly, it is the money set aside to pay the yard to touch your freight.

The THC meaning in shipping is easy to remember: it compensates the terminal for every move required to progress freight from gate-in to ship’s rail, then from ship’s rail to gate-out on arrival.

Why Is Terminal Handling Charge (THC) Important?

Now that we know the answer to what does THC stand for in shipping, why should we even care about it? THC influences total landed cost, transit reliability, and document flow. Without a clear line for these yard activities, carriers and ports could not fund the labor and equipment that orchestrate your box alongside thousands of others. The charge also signals service level: high-volume hubs with modern cranes, wide aisles, and fast truck turn times often command slightly higher rates because they reduce congestion penalties and gate delays. For planners, understanding THC clarifies the implications of choosing one gateway over another and prevents surprises during documentation or cargo release.

What are the Different Types of THC?

Origin Terminal Handling Charge (OTHC)

This is the export-side portion collected at the origin gateway. It covers receiving your shipment, stacking, pre-advice verification, weighing if required, and the final lift to the outbound vessel. OTHC can include security screening and early storage if the box arrives before its window. Most exporters see it on the same invoice as trucking and customs brokerage, either billed by their forwarder or directly by the carrier.

Destination Terminal Handling Charges (DTHC) or Import THC

This is the import-side portion paid at the receiving gateway. It covers the discharge from the ship, stack moves, customs inspection pulls where applicable, and the lift to your truck or railcar. DTHC is due whether freight is FCL or LCL, and it is often time sensitive because storage beyond the included free days triggers separate yard demurrage.

Transshipment THC

Some lanes require a mid-journey transfer to a different vessel at a hub. A transshipment fee covers the lift-off from the first ship, temporary stacking, and lift-on to the next ship. While smaller than full origin or destination amounts, it still matters for multi-leg routings and should be included when comparing quotes.

Who Pays Terminal Handling Charges?

Payment depends on your Incoterms agreement. Under many export terms, the seller covers OTHC while the buyer pays DTHC; under others, the buyer takes most gateway fees. When a forwarder arranges a door-to-door solution, they often advance both sides and pass them through on a consolidated invoice. Always confirm the payer of each gateway charge at the quotation stage so THC does not surprise either party.

What is Included in Terminal Handling Charges?

Although each gateway publishes its own tariff, the basket commonly includes:

  • Gate processing, EIR creation, and yard entry control

  • Lift-on and lift-off moves between the truck, the stack, and the ship’s gear

  • Yard transfers and positioning for inspection or loading

  • Weighing, scanning, or security checks required by local rules

  • Use of yard equipment such as RTGs, reach stackers, and spreaders

  • Basic storage during included free time and stack monitoring

  • Documentation tasks specific to the yard’s interface with carriers and customs

Where LCL is involved, the CFS portion is billed separately; THC covers the yard-side touch points rather than warehouse consolidation.

What is the Cost of Terminal Handling in Shipping?

THC is market-based. It varies by gateway, carrier contract, season, and box size. As a snapshot, many exporters see OTHC and DTHC published per unit rather than by weight or value. On average, THC charges for a 20-foot box moving from major Asian gateways to the United States often show around $550 on one side of the move and can be slightly different on the other. A similar lane from Asia into Canada may list roughly $540 for a 20-foot container. A 40-foot often carries a higher figure due to extra handling mass.

Regional examples that shippers regularly report:

  • Southeast Asia to U.S. West Coast: OTHC 480–620 USD per 20-foot, DTHC 500–650 USD per 20-foot

  • Northeast Asia to Canada West Coast: OTHC 500–590 USD per 20-foot, DTHC 520–600 USD per 20-foot

  • Europe to U.S. East Coast: OTHC 400–550 USD per 20-foot, DTHC 450–600 USD per 20-foot

These are directional figures to help with planning. The actual terminal handling cost you pay can be higher or lower depending on your carrier contract, congestion surcharges, and whether your box requires extra touches like out-of-gauge handling or reefer power. For budgeting, think in ranges and validate before booking. That approach also makes THC calculation straightforward in a landed cost worksheet: multiply the published amount by units moved and add any published extras such as hazardous surcharges or overweight lifts.

Because arterials change, a good practice is to ask your forwarder for a current THC table whenever you change port pairs. That single page helps answer THC cost in shipping, keeps quotes aligned, and avoids unexpected adjustments at release.

Discover proven strategies to minimize Terminal Handling Charges and streamline your logistics process.

How to Mitigate THC for Your Next Shipment?

Choosing the Right Port

Gateway selection shapes cost and time. Some ports publish slightly higher charges but reduce truck queues and free-time pressure. If your business depends on quick turns, the higher fee can be cheaper than paying demurrage or missing a delivery window. Evaluate berth productivity, automation levels, and typical congestion patterns before you commit.

Consolidate Shipments

Consolidating multiple small orders into fewer full loads reduces total gateway touches per cubic meter. For LCL, work with a forwarder that offers strong weekly services, so your shipment waits less and your per-unit THC exposure balances out over volume.

Accessibility of the Port

Consider highway and rail access. Poor access increases dwell time, which can trigger storage beyond free time. A gateway with direct intermodal ramps or uncongested arterials often saves money even when the posted charge is a little higher.

Compare THC across Different Ports and Carriers

Publish your origin and destination options and request a simple comparison sheet. Rates vary by carrier and by terminal assignment within the same harbor. Asking for alternatives helps you spot outliers, negotiate better, and choose the best solution for your route mix.

Facilities at the Port

Modern yards have reliable reefer plugs, on-dock rail, and digital appointment systems. These features reduce extra lifts and manual re-handling. The outcome is fewer surprise line items, even if the posted charge is mid-range.

Conclusion

THC's full form in shipping equals Terminal Handling Charges, a line that almost every international move carries, regardless of Incoterms, commodity, or route. It is a predictable input that rewards planning. When you understand the line, you can compare gateways with clarity, design a realistic landed cost, and set expectations with customers. Keep a simple checklist for each booking: confirm payer, confirm numbers for both ends, check free time, and validate whether a transshipment applies. Doing so avoids disputes and keeps your box moving from gate to vessel and back out again with fewer stops.

FAQ

Who Pays for Terminal Handling Charges?

Responsibility follows Incoterms. Many export terms assign OTHC to the seller and DTHC to the buyer. If a forwarder quotes door-to-door, they often advance both sides and pass the amounts through on one invoice. Always confirm the payer before you book.

How are Terminal Handling Charges Calculated?

Most gateways publish a per-unit fee by size and sometimes by equipment type. Your terminal handling charges calculation usually equals the posted amount multiplied by the number of units, plus extras like hazardous, reefer plug-in, or overweight lifts. Add transshipment where a hub transfer occurs.

Why is Terminal Handling Charge Important in Shipping?

It funds the labor and gear that move freight safely between the gate and the ship. Understanding this line helps you compare gateways, avoid demurrage, and plan realistic delivery dates tied to yard windows and free time.

Who Charges Terminal Handling Fees?

The operator of the gateway yard or the carrier acting on its behalf. On invoices, you will see the amounts as separate lines or bundled under a forwarder’s service charge.

What is the Impact of THC on Shipping?

THC influences total landed cost, routing decisions, and transit reliability. The line’s size and structure can make one gateway more attractive than another, and it can affect how you schedule drayage and pick up windows.

What Does THC Stand for in Shipping?

Terminal Handling Charges. You will also see references to THC in shipping terms and THC charges meaning in shipping on rate sheets. Knowing these terms keeps quotes transparent and prevents budgeting errors.