Freight Charges Glossary: Terms, Fees & What They Really Mean
That’s why we created this Freight Charges Glossary — to make sense of it all. Below, we explain the most common freight charges, including how and when they apply. Whether you're managing quotes or auditing invoices, this guide will help you ship smarter.
Base Charges vs Accessorial Charges
Freight charges fall into two categories:
- 🧱 Base Charges: Standard rates tied to the main movement of goods (e.g., port-to-port or door-to-door)
- 🔧 Accessorial Charges: Extra fees for specific services or exceptions
Both matter — and both can vary by carrier, Incoterm, and transport mode.
offer:
Freight Charges Explained: Key Terms
⚓ FOB – Free On Board
Cost includes delivery to the ship at origin port.
📌 Buyer pays for everything beyond that point.
🧾 CAF – Currency Adjustment Factor
Surcharge applied to offset currency fluctuations in international freight.
⛽ BAF – Bunker Adjustment Factor
A surcharge related to fluctuating fuel prices (bunker fuel for vessels).
📄 THC – Terminal Handling Charge
Cost of handling cargo at the port terminal — loading/unloading, gate fees, paperwork.
🚚 DTHC – Destination Terminal Handling Charge
Like THC, but applied at the receiving port.
📍 ORC – Origin Receiving Charge
Local charge for cargo handling, inspection, and documentation at origin.
Charges by Mode of Transport
Mode | Typical Charges |
🌊 Ocean | FOB, CIF, BAF, THC, DTHC, CAF |
✈️ Air | AWB Fee, Fuel Surcharge, Security Fee, CFS |
🚛 Trucking | FSC (Fuel Surcharge), Linehaul, Stop-off Charge |
🧠 Tip: Always confirm which charges are included in your quote and which are billed later.
Incoterms & Their Impact on Freight Charges
Incoterms define who pays for what. Here’s how charges shift depending on the term:
Incoterm | Seller Pays For | Buyer Pays For |
EXW | None (pickup at origin) | All charges |
FOB | Origin delivery + loading | Main freight, destination |
CIF | Freight + insurance | Unloading + final delivery |
DDP | Everything (full delivery) | None |
📉 Choosing the right Incoterm can reduce your charge exposure.
Other Common Accessorial Fees
- Demurrage – Charges for holding containers at port beyond free time
- Detention – Fees for holding carrier equipment beyond the allowed time
- Chassis Usage – Applicable in drayage for trailer frame rental
- Documentation Fee – Admin charges for processing export/import papers
- CFS Fee – Container Freight Station fee for consolidating LCL shipments
- ISF Filing Fee – Required for U.S. importers before ocean freight departure
💸 These extras can add up fast — always read the fine print.
Sample Freight Charge Breakdown
Charge Type | Amount (USD) |
Ocean Freight (FOB) | $1,200 |
BAF | $150 |
THC (Origin) | $100 |
DTHC (Destination) | $125 |
Documentation Fee | $75 |
Total | $1,650 |
📍 Now imagine if your quote only showed “$1,200” — and the rest appeared later on the invoice.
Conclusion: No More Surprises
Freight pricing doesn’t have to be mysterious. When you understand what each charge means, you gain the power to:
- ✅ Negotiate better
- ✅ Avoid hidden fees
- ✅ Build accurate quotes
- ✅ Strengthen client trust
Whether you ship daily or occasionally, this glossary helps you stay in control.
🎯 Call to Action
👉 Need help estimating your next shipment? Try our free Size-selector + Freight Charges Calculator.
📥 Click below to Calculate charges and ship with full clarity.