Terminal Handling Charges (THC) in Sea Freight: What They Are and Who Actually Pays

Every importer who has looked closely at a sea freight quote from China has run into Terminal Handling Charges, usually abbreviated THC, sitting as a separate line item from the base ocean freight rate. It is one of the most commonly misunderstood charges in the entire shipping process, partly because it is charged twice — once at the origin port in China and again at the destination port in Bangladesh — and partly because the base freight rate quoted by a carrier often does not include it, which makes an initial quote look cheaper than what actually gets invoiced once the shipment moves.

What THC Actually Pays For

Terminal Handling Charges cover the physical work of moving a container between the ship and the port gate: lifting it off or onto the vessel with a gantry crane, moving it within the container yard, and the port or terminal operator’s administrative handling of that movement. This is separate from ocean freight, which covers the vessel’s fuel, crew, and voyage cost, and separate from trucking, which covers moving the container between the port and an inland warehouse. THC exists because ports and container terminals in most countries, including Bangladesh’s Chattogram port, are operated by a terminal operator that is a distinct commercial entity from the shipping line, and that terminal operator charges for its crane and yard services independently of whatever the shipping line charges for the ocean voyage itself.

Origin THC vs Destination THC

Because a container passes through two ports on a typical China-to-Bangladesh voyage, THC is charged twice under two different names, and importers who only budget for one occurrence are routinely surprised by the second. Origin THC (sometimes called OTHC) is charged at the Chinese port — commonly Shenzhen, Ningbo, or Guangzhou — when the container is loaded onto the vessel, and destination THC (DTHC) is charged at Chattogram when the container is unloaded. The two charges are set independently, by different terminal operators, in different currencies, and are not necessarily the same amount. A freight quote that only shows one THC figure, without specifying whether it is origin, destination, or both, is a quote that needs a follow-up question before it can be compared fairly against a competing quote.

Why THC Is Quoted Separately From Ocean Freight

Shipping lines quote ocean freight and THC separately partly for commercial flexibility — ocean freight rates fluctuate frequently with vessel capacity and fuel costs, while THC is set by the terminal operator on a more stable schedule and does not need to be renegotiated as often. It is also partly a historical industry convention that has simply persisted: freight forwarders and shipping lines both quote this way because it lets them separate charges that are within their control (ocean freight, which they can discount for volume customers) from charges that are essentially a fixed pass-through cost set by a third party (the terminal operator) that they have no ability to negotiate down. Understanding this distinction helps explain why a forwarder can offer you a better ocean freight rate through negotiation, but generally cannot do much about the THC figure regardless of your shipment volume.

Who Is Contractually Responsible for Paying It

Under FOB terms, the Chinese seller is typically responsible for origin THC as part of getting the goods loaded onto the vessel, while the Bangladeshi buyer is responsible for destination THC as part of receiving the goods. Under CIF or CFR terms, the seller’s freight arrangement usually absorbs origin THC into the freight cost quoted to the buyer, but destination THC remains the buyer’s responsibility in almost every common Incoterm arrangement, because it is a cost incurred at the buyer’s own port after the seller’s delivery obligation has technically ended. This is a detail worth clarifying explicitly in the purchase agreement or freight quote, since “who pays THC” is a frequent source of disputed invoices between buyers and forwarders when the Incoterm was not discussed clearly at booking. For the broader picture of how these terms allocate cost and risk, see our guide on Incoterms explained for Bangladeshi importers.

How Much THC Typically Adds to a Shipment

THC is charged per container, not per shipment value or weight, which means its impact on overall cost varies significantly depending on how much cargo is packed into that container. For an LCL (less than container load) shipment, THC is prorated across the shipment’s share of the container’s volume, so a small LCL shipment pays a proportionally small piece of a larger THC figure. For a full container, the entire THC falls on that one shipment. Because THC is set by the terminal operator and adjusted periodically rather than negotiated per shipment, exact current rates vary and are best confirmed directly with your forwarder at the time of booking rather than assumed from a previous shipment’s invoice, since these figures do change over time.

A Common Point of Confusion: THC vs Port Handling Charges

Importers sometimes conflate destination THC, charged by the terminal operator for moving the container, with separate port handling and clearing charges that a C&F agent bills for managing the customs clearance process itself — document processing, examination coordination, and delivery order collection. These are genuinely different costs from different parties for different work, even though they both appear on the overall landed cost of a shipment and both relate to “the port.” A clearing agent’s invoice that bundles multiple line items under a single “port charges” heading without breaking out THC separately makes it hard to verify what you are actually being charged for, which is worth asking your C&F agent to itemize clearly. For more on this side of clearance, see our page on what a C&F agent does and why you need one.

What to Ask For When Comparing Freight Quotes

• Whether the quoted rate includes origin THC, destination THC, both, or neither — get this in writing, not verbally.
• Whether THC is quoted per container (FCL) or prorated (LCL), and how that applies to your specific shipment size.
• Whether the Incoterm agreed with your supplier places origin THC on their side or yours.
• Whether your C&F agent’s invoice separates destination THC from their own clearance service fee, so you can verify each line.

Currency and Invoicing: Another Source of Mismatch

Origin THC in China is typically invoiced in Chinese yuan or US dollars by the terminal or the export-side forwarder, while destination THC at Chattogram is invoiced in Bangladeshi taka by the local agent handling arrival. When these two figures are converted and added together for a landed cost calculation, exchange rate movement between the time the origin quote was given and the time the shipment actually arrives can shift the final number slightly, which is normal and expected rather than a sign of an error. What is worth double-checking is that the two charges are not accidentally being double-counted or double-converted somewhere in a spreadsheet that combines a forwarder’s origin quote with a separate C&F agent’s destination invoice, since these come from two different parties working in two different currencies and are easy to reconcile incorrectly if entered into a landed cost sheet without care.

THC rates and how they apply to your shipment depend on the terminal, container type, and current schedule, so ask us for a landed cost estimate built around your specific route and volume rather than a generic figure. DE International handles the full sea freight process from China to Bangladesh, including transparent breakdowns of THC and other port charges so there are no surprises on the final invoice. See our related guide on how sea freight rates are calculated, reach us through our contact page, or browse our shop.