Terminal handling charges (THC)

Terminal handling charges (THC) and post terminal charges are important components of the cost of transporting containerized coffee. (THC cover the loading and discharge of containers, not charges for inland transportation etc.) A freight quotation by itself may be attractive, but the cost of bringing a container on board or getting it to the roasting plant after discharge may well be higher than the norm and so offset any perceived advantage. Receivers keep a close watch on terminal charges; these charges are an important part of their evaluation of the competitiveness of individual carriers.

Remember that unless stated otherwise in the contract, under an FOB contract the shipper is liable for THC at origin and the receiver is liable at destination. If a receiver negotiates a lower rate of freight but at the same time the terminal handling costs at origin increase, the outcome is that freight costs are being moved around the supply chain - in this case to the detriment of the exporter. (Under an FCA contract the receiver is liable for both sets of THC so this is not an issue.)

Cost distribution between sellers (S) and buyers (B)