Key Takeaways
- Request a comprehensive breakdown of all local port charges upfront.
- Verify demurrage and detention free-time limits.
- Never select a quote based solely on the freight rate line; calculate the total landed cost.
Beware of Low Freight Rates Linked to Exorbitant Local Charges
Some freight forwarders quote suspiciously low ocean freight rates to win orders, only to pad margins with inflated local charges on the destination invoice. Common examples include document fees (B/L Fee), Container Imbalance Charges (CIC), or excessive yard delivery surcharges. Importers should only compare bids on a Total Landed Cost basis.
Understanding Demurrage Surcharges and Detention Free Time
Demurrage (charges for storing containers in port yards past free time) and Detention (charges for keeping containers outside ports past free time) are penalties levied by shipping lines. Negotiating an extension to 14 days free time during cargo booking acts as a critical buffer, protecting you from escalating costs if customs clearances run into unexpected documentation audits.
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Contact Our Experts NowHandling Fuel Surcharges and Quote Validity Clauses
Quotations typically outline floating fuel surcharges, such as the Bunker Adjustment Factor (BAF) for ocean freight or FAF for cross-border trucking. Confirming quote validity periods and establishing a standard review framework based on public fuel price indices are best practices for corporate procurement teams.
Official Reference Agencies and Regulations
- Thai Customs Department: Reference under the Customs Act B.E. 2560 and related cross-border transit regulations.
- International Chamber of Commerce (ICC): Incoterms 2020 rules governing international shipping liabilities and transport terms.
To verify freight quotations accurately, evaluate 3 key components: 1. Main Freight Rate (Ocean/Air/Road freight charges). 2. Origin/Destination Local Surcharges (e.g. THC, CFS, D/O Fee, Customs Entry fees). 3. Potential situational surcharges (such as Demurrage, Detention, or physical customs inspection fees). Always demand an itemized breakdown rather than blindly trusting an unqualified 'All-in' quote.
Frequently Asked Questions
Q: How should I allocate local import fees for mixed cargo?
A: Use value-based allocation if item values vary significantly, but use weight-based allocation if shipping rates are charged primarily by weight and item weights differ widely.
Q: Should import VAT (7% in Thailand) be included in Landed Cost?
A: If your company can reclaim or offset import VAT as input tax, it is typically excluded from product cost but should be tracked as a cash flow component.
