An Insider’s Guide to Types of Shipping Surcharges

Types of Shipping Surcharges, When it comes to the complex world of freight transportation, few things elicit more frustration and confusion than the cryptic acronyms and strings of surcharges that pad shipping invoices. You negotiate what seems like reasonable base rates only to get billed for a litany of fuel adjustment factors, congestion fees, security charges, and other unexpected accessorials that blow budgets and boil blood.

As a shipper, it’s important to understand the most prevalent types of shipping surcharges levied by carriers and look at why these extra fees come into play. Getting familiar with the surcharging landscape can help demystify the line items padding your freight bills. More importantly, it allows you to anticipate and budget for the add-ons so they don’t catch you off guard.

Let’s take a few minutes to walk through some of the most common surcharges used across different freight modes. We’ll look at what factors trigger the fees and how shippers can account for escalating costs when quoting, pricing orders, and managing transportation expenses. Forewarned is forearmed when it comes to controlling shipping spending and preventing surprise surcharges from capsizing budgets.

What are the main types of Shipping Surcharges?

Let’s take a few minutes to walk through some of the most common surcharges used across different freight modes. We’ll look at what factors trigger the fees and how shippers can account for escalating costs when quoting, pricing orders, and managing transportation expenses. Forewarned is forearmed when it comes to controlling shipping spending and preventing surprise surcharges from capsizing budgets.

Fuel Surcharges

One of the most prevalent surcharges in shipping is the fuel surcharge, sometimes called a “bunker adjustment factor”. With fuel being one of the biggest expenses in transportation, carriers often pass along increases in diesel or oil prices to customers by tacking on a fuel surcharge.

Fuel surcharges are almost always shown as a percentage of the base shipping rate. So if the base rate was $100 and the fuel surcharge was 25%, you’d pay an additional $25 in fuel fees. These percentages can fluctuate widely, going up when fuel spikes and coming back down when prices fall.

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Peak Season Surcharges

Depending on what you ship and when you may encounter peak season surcharges…also sometimes cleverly called “temporary rate adjustments”. These fees account for the increased volume and congestion carriers face during busy retail events like back-to-school, holidays, or even produce season.

Basically, when high demand exceeds shipping capacity, carriers charge extra. And those temporary peak season rates can seriously affect your shipping budget if you don’t plan ahead.

Security Surcharges

With global concerns around terrorism and piracy, carriers sometimes add security surcharges to account for risks associated with transshipments through certain countries. These fees help pay for extra screening procedures, armed guards along some trade lanes, and more robust tracking during the highest-risk legs of a delivery.

Security surcharges usually show up for ocean freight shipments coming from or connecting through parts of Africa and the Middle East. Amounts vary by carrier and change as threat levels and insurance costs fluctuate.

Terminal Handling Charges

Another common add-on fee comes under the label terminal handling charges (THCs). This surcharge covers costs incurred when carriers have containers loaded, unloaded, stored, or otherwise handled at maritime shipping terminals.

THCs relate almost exclusively to international ocean freight. And the charges can vary quite a bit depending on the specifics of each shipping terminal. THCs also sometimes get bundled together with chassis fees and storage fees associated with international shipments.

Overweight Surcharges

When it comes to size and weight limits, ocean freight has some of the most unforgiving policies. Shipments exceeding the size or weight restrictions often get hit with costly overweight surcharges that make heavy or bulky items disproportionately expensive to ship overseas.

Overweight ocean charges get calculated in a couple of different ways. Sometimes carriers assess a percentage upcharge applied to the entire shipping cost. Other times excess weight fees get billed by the metric ton or cubic meter. Rates scale higher the more over limits the load measures.

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Other Miscellaneous Fees

We’ve covered some of the big ones when it comes to surprise surcharges. But there are always a variety of other accessorial charges carriers might tack on as well. A few examples include…

• Late fees for missing cut-off times
• Waiting time fees if drivers get delayed for loading/unloading
• Storage fees are containers sit at ports longer than allotted
• Chassis fees for ocean freight needing special equipment
• Low-density upcharges for bulky/light shipments

The list goes on and on. And these miscellaneous surcharges can really add up if you get hit with enough.

The key is understanding common fees so they don’t catch you off guard. Know your shipments and proactively ask carriers what additional charges may apply given specifics like weight, seasonality, origin/destination, and special handling needs. Forewarned is forearmed when it comes to budgeting and controlling shipping spend.