You agreed a rate. The invoice arrives carrying nine additional lines, several of them acronyms, adding a third to the total. Most of those lines are legitimate. Knowing which is which is what lets you challenge the ones that are not, and budget properly for the ones that are.
The short answer
Surcharges exist so carriers can reprice volatile costs without reopening every contract. Fuel, currency, and demand peaks move faster than tariffs do. The lines worth scrutinising are the ones that are not published anywhere, the ones billed at both ends, and anything charged at a superseded rate.
Ocean surcharges
- BAF, Bunker Adjustment Factor. Recovers vessel fuel cost. Republished monthly or quarterly by lane, and commonly in the range of 100 to 800 US dollars per container, though it moves with oil. Sometimes appears as FAF.
- LSS, Low Sulphur Surcharge. Covers compliant low-sulphur fuel under the IMO sulphur cap. Increasingly folded into BAF; if you see both, ask whether they overlap.
- CAF, Currency Adjustment Factor. Compensates for exchange movement between the tariff currency and the carrier's costs. Typically a percentage of the base rate.
- PSS, Peak Season Surcharge. Applied when demand tightens, classically ahead of Lunar New Year and in the Q3 to Q4 peak. Can be several hundred to well over a thousand dollars per container.
- GRI, General Rate Increase. Not really a surcharge but a repricing of the base rate for a lane, usually announced with notice. On spot business it is effectively a rate change on a date.
- THC, Terminal Handling Charge. Charged at origin and destination for moving the container across the terminal. Set by the terminal, largely non-negotiable, and legitimately billed at both ends. Being charged twice at the same end is not legitimate.
- CIC, Container Imbalance Charge. Recovers the cost of repositioning empty containers on lanes where trade flows are lopsided.
- ISPS, security charge. Port facility security costs, usually a modest fixed amount.
- Documentation or bill of lading fee. Per bill, commonly 50 to 150 dollars.
- Canal surcharges. Suez and Panama transit costs passed through, and they move with canal pricing and draught restrictions.
- War risk or emergency surcharges. Applied on affected routings. See how to read and challenge them.
- Emissions surcharges. EU ETS and FuelEU costs on voyages touching the EU. See what the emissions line means.
Air surcharges
- FSC, fuel surcharge. Per kilo, published by the airline, and often a substantial share of the all-in rate.
- SSC, security surcharge. Per kilo, covering mandatory screening of air cargo.
- Airway bill fee, per consignment.
- Dangerous goods surcharge, plus handling fees for temperature-controlled, oversized or valuable cargo.
- Airport terminal handling at both ends.
The charges that are not surcharges at all
Two of the largest lines people call surcharges are penalties, and they are avoidable in a way that BAF is not.
Demurrage accrues when a full container sits in the terminal beyond its free time. Detention accrues when you hold the container outside the terminal beyond free time. Both are charged per container per day, both escalate, and both are usually caused by documentation or clearance running late rather than by anything the carrier did. In the US, the FMC's billing rules constrain how these can be invoiced and give grounds to refuse some charges outright; see the rules that let you refuse to pay.
Which are negotiable
- Genuinely negotiable: the base rate, forwarder documentation and handling fees, and free time at destination, which is often the most valuable thing you can ask for and the one shippers forget to.
- Rarely negotiable: THC, ISPS and port dues, because the terminal and port set them.
- Not negotiable but predictable: BAF, LSS and FSC, which are published. You cannot argue the number, but you can verify it.
How to challenge a line
- Ask what it is for, in writing. A legitimate charge has a name, a basis and usually a published tariff.
- Check the carrier's published schedule. Lines publish surcharge tariffs on their own websites, by lane and effective date.
- Check the effective date. Charging last quarter's higher BAF on this quarter's sailing is a common and recoverable error.
- Look for duplication. THC billed twice at one end, or a low-sulphur charge inside BAF and again on its own line.
- Compare against the quote. Any line that was not disclosed and not marked as floating is a conversation.
- Raise it before paying. Leverage disappears on settlement.
The structural fix is to insist on all-in quoting with every line itemised at the point of booking, so that a surcharge is a number you already expected rather than a discovery. How freight rates are built covers what a complete quote should contain.
