FCL Cost Breakdown

Break-down of the most common charges associated with the steamship lines (SS line) and how it affects the costs for shipping.

Increase in the price of oil:
  • BAF (bunker adjustment for fuel): general increase in the price of fuel used by the SS Lines. The recent situation throughout the world such as labor unrest at the ports in Nigeria, civil strife in Venezuela, and the recent gulf war conflict, has each contributed to the rising cost of fuel and an increase in this BAF rate.
  • EBAF (emergency bunker adjustment for fuel): this is associated with the SS Lines increase in the price of fuel during a world crisis when there are real shortages of fuel e.g. the recent Gulf War.

Increase in the cost of shipping:
  • O/F (ocean freight): these costs associated with the SS Lines and you can expect prices to change on a yearly basis
  • GRI (general rate increase): this surcharge allows the SS Lines to change the ocean freight rates on a monthly basis if the situation warrants it. GRI increases happen about once a year but during a major crisis like a war can happen on a quarterly basis.

Equipment charges:
  • CUC (container usage charge): this is a relatively new charge that came into affect several years ago and has remained stable.
  • C/R (chassis rental): once again relatively new and has remained stable over the last few years.
  • CS/CS (container seal charges): all containers come with a seal (lock) and although this fee has remained stable we have seen a small increase in charges on inbound shipments coming from Europe to the US.
  • EIB (equipment imbalance): these charges are very real and can be assessed on an individual shipment at anytime by the SS Line. This situation, although rare, happens when there are to any containers in one place and not enough in another area of the world. This shortage of containers can produce an immediate surcharge by the SS Line. For example, several years ago there was a surplus of containers at Bremerhaven, Germany, and a shortage of containers at the Chicago terminal producing an EIB surcharge on an individual shipping out of Milwaukee, WI.

Work Stoppages:
  • PCS (port congestion surcharge): this is an immediate charge imposed by the SS Lines when there are strikes or work slow-downs by labor at the ports. The example was last years slow-down at all West Coast ports which resulted in massive delays in getting freight in and out of the ports resulting in these surcharges being imposed until the situation was settled.

War:
  • WRS (war risk surcharge): this is a surcharge imposed by the SS Lines when there is a war in an area of the world. It should be pointed out that when there is a major conflict all ports around the world can be affected. The recent Gulf War produced an immediate surcharge on all export shipments going out of the US to any port in the world, not just the Middle East/Persian Gulf area.
  • SSC (security surcharge): this is a direct result of terrorism and the effects it has had on all ports in combating this situation. All ports around the world particularly in the US have had to implement new security measures to insure the safety of everyone and the continual free flow of freight which is vital to everyone.

Currency Fluctuations:
  • CAF (currency adjustment factor): this is a surcharge imposed by the SS Lines dealing with wild fluctuations in the currency markets. For example, there will be an increase in the CAF of 3% this summer for all import shipments coming from Europe to the US.

Trucking:
  • FSC (fuel surcharge): this charge is related to the drayage, pre-carriage and on- carriage trucking aspect of shipping. When there are increases in the price of oil, it will have an immediate affect on the costs of trucking.
  • RGF (road guarantee fund): in certain areas of the world like Africa there are charges by certain governments to the SS Lines for use of their roads and usually it is based on a very small percentage of the value of the freight.
  • D/C (Demurrage charges): the standard hourly rate for a live-load after the 2 free hours runs from $60.00/hr. to $80.00 However in different parts of the country like NYC an LA, local teamster unions have their own separate contracts with the SS Lines and their hourly demurrage charges are higher. In Detroit, truckers allow only 1 hour free waiting time after arrival at a site, and $100.00/hr. if needed thereafter. If delivering to a non-commercial area (a residential area) they charge an accessorial fee of $ 250 flat extra.
  • O/C "On-carriage" intermodal trucking services are subject to accessorial charges. Rate are subject to change, based on various factors including rising fuel surcharges, EIB equipment imbalance surcharges and route changes. On-carriage trucking is normally set up approx 7 - 14 days in advance of the actual movement of the cargo by the trucker and rates must be reconfirmed at that time.

Port Charges:
  • CSC (container service charge): this is a European port charge that has remained constant over the years and we expect no new changes in this rate.
  • DDC (destination delivery charge): this is a common port charge for South America and Africa and these charges have remained pretty much the same despite the instability in these areas.
  • US THC (terminal handling charge): this is common US port charge for all inbound and outbound freight. Rates have remained stable and look to remain that way for the near future.

Documents:
  • SED (shipper's export declaration): this is relatively new document charge that has to be filed for all shipments valued over $2500.00
  • US C/C (customs clearance): this is an optional service that the shipper can self-clear at the US port or have Sefco arrange to do this. It should be pointed out that not all US ports are the same in terms of the amount of paperwork that has to be filed to clear US Customs. Therefore charges for these services can vary from port to port.
  • EUC (European Customs): this is an accessorial charge by the SS Line for all inbound freight coming from Mediterranean countries like Italy to the US.
  • IAC (Inter-Americas Customs): this is an accessorial charge by the selected customs broker at origin for US inbound freight coming from within the Americas. Customs formalities vary depending on country of export.

These are just a few examples of costs that go into a shipping rate from the SS line to you, shippers. This is why we constantly have to check and recheck the shipping rates for you. We will continue to add other examples of costs by the SS lines to this page. Please check back from time to time. Any questions or comments, contact our sales department at Sefco Export.

Sefco Export Management Company, Inc.
Main Phone: 888-268-0565
Main Fax: 718-732-2863
Email: info@sefco-export.com

Joseph Quinn
President


Further Reading
   [FCL preamble]
   [FCL fact sheet]


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