THC often appears as a short line in a freight quotation, yet it becomes a common dispute point when the seller says ocean freight has been prepaid, the buyer assumes CIF covers every destination cost, and the carrier still invoices terminal handling at destination. Unless the parties separate origin THC, destination THC, the invoiced party, and the party economically responsible under the sale contract, they may compare quotations on different scopes, pay the same charge twice, or omit local charges from the landed-cost budget. This guide explains how THC arises, how it is calculated, what it normally covers, how Incoterms® affects cost allocation, and which documents must be checked before payment.

Operational reference for importers, exporters, procurement, logistics, accounting and operations teams | Updated: 16 July 2026

QUICK FACTS

What is THC?

Terminal Handling Charge is a charge for handling a container at the origin or destination port/terminal.

Who invoices it?

The carrier or forwarder commonly invoices the customer; the terminal may invoice the carrier or, in some locations, users directly.

Who bears it?

Do not decide from the Incoterm name alone. Check the named place/port, carriage contract, prepaid/collect instruction and quotation scope.

Charging unit

For FCL, THC is commonly charged per container/equipment type, with different levels for reefer, DG, OOG or special equipment.

Core conclusion: the party receiving the THC invoice is not necessarily the party that ultimately bears the economic cost. The charge may be reimbursed, embedded in the product price, or reallocated under the sales contract.

Illustration for What Is THC? Who Pays Terminal Handling Charges? — Illustration of the logistics topic, document or operation discussed in the article.

SCOPE OF APPLICATION

This article focuses on THC in containerised ocean freight, primarily FCL shipments and transactions involving local charges at the port of loading and/or port of discharge. It is relevant to shippers, consignees, importers, exporters, buyers, sellers, forwarders and logistics-cost control teams.

It covers origin and destination THC, commonly coded as OHC/THO and DHC/THD.
It should not be applied automatically to LCL cargo, where CFS/handling charges may apply in addition to or instead of FCL-style THC.
It does not provide a fixed rate. THC varies by carrier, terminal, trade lane, equipment, commodity, effective date and service contract.
Breakbulk, bulk, Ro-Ro, project cargo, DG, OOG and reefer shipments require separate tariffs.

KEY TERMINOLOGY

Term	Meaning	Operational role
THC	Terminal Handling Charge.	A local charge for terminal handling at origin, destination or both.
OHC / THO	Origin Handling Charge / Terminal Handling Origin.	THC at the port or terminal of loading.
DHC / THD	Destination Handling Charge / Terminal Handling Destination.	THC at the port or terminal of discharge.
Prepaid	A charge paid at origin or by the nominated prepaid party.	An invoicing instruction under the carriage contract; it does not automatically mean “seller’s cost”.
Collect	A charge collected at destination or from the nominated destination payer.	It does not automatically mean “buyer’s cost” if the sales contract provides reimbursement.
Local Charges	Charges at origin/destination that are separate from or additional to ocean freight.	May include THC, D/O, documentation, seal, CIC, CFS and other items.

NATURE AND OPERATING MECHANISM

1. THC arises from terminal handling activities

In the container transport chain, the terminal receives, moves, stacks and transfers containers between the yard and the vessel. Carriers commonly consolidate relevant costs into a Terminal Handling Service/Charge and invoice customers under a published tariff or service contract.

Maersk’s official local-information pages describe OHC as the cost of handling a container at the origin port/terminal and DHC as handling at the destination port/terminal. The exact service scope, however, is not identical across all terminals and carriers. THC should therefore not be assumed to include every lift, storage or delivery-related activity at a port.

2. Separate three responsibility layers

Service provider

The terminal, port, carrier or related operator performs or arranges the handling service.

Invoice recipient

The shipper, consignee, booking party, forwarder or agent is invoiced under the pay term.

Economic cost bearer

The seller or buyer bears the cost under Incoterms®, the sales contract, quotation and reimbursement arrangement.

These layers may differ. A consignee may pay DHC to secure delivery while the sales contract requires the seller to bear costs to the named destination; the consignee may then recover the amount or it may already be reflected in the goods price.

3. Origin and destination THC are separate charges

OHC/THO relates to origin and DHC/THD to destination. A quotation stating only “THC included” is insufficient when both ends may generate charges. Request the specific end, equipment, currency, tax, validity and pay term.

4. When the charge arises and is invoiced

OHC is commonly confirmed or invoiced during booking, container gate-in or origin processing. DHC commonly appears on the destination debit note/invoice around arrival and before delivery order or cargo release. The exact billing event depends on the carrier, credit terms and local procedure; lock the pay term before ETD and recheck it before ETA.

5. Cost-control formula

Budgeting principle: THC borne by a party = responsible OHC + responsible DHC + applicable special-equipment/cargo premiums + taxes − any portion expressly included in ocean freight or the goods price.

There is no universal monetary formula. For example, where a quotation lists OHC per container and DHC as “collect at destination”, procurement should include DHC in landed cost even when the seller has prepaid ocean freight.

WHO PAYS THC UNDER INCOTERMS®?

Incoterms® 2020 allocates tasks, costs and risks between seller and buyer, while carrier invoicing also depends on the carriage contract and prepaid/collect instructions. The matrix below is an operational review tool, not a substitute for the contracts.

Rule group	Origin THC – usual cost tendency	Destination THC – usual cost tendency	What must be verified
EXW	Usually buyer’s cost from pickup; exceptions may arise where the seller assists with booking/export.	Usually buyer’s cost.	Named place, carriage-contracting party, export clearance and seller’s disbursements.
FCA	Depends on the FCA delivery point. The seller bears costs until delivery to the carrier at the named place; for FCA terminal, determine whether OHC is required to complete delivery.	Usually buyer’s cost.	FCA seller’s premises versus FCA terminal; terminal-in/terminal-out scope.
FAS / FOB	Under FAS, the seller bears costs until the goods are placed alongside the vessel; loading on board and costs after delivery fall to the buyer. Under FOB, the seller bears costs until the goods are on board, so OHC usually falls to the seller. For containers delivered at a terminal, review FCA rather than applying FAS/FOB mechanically.	Usually buyer’s cost.	Actual delivery point, booking party and carrier’s container-receipt terms.
CFR / CIF / CPT / CIP	Usually seller’s cost because the seller arranges and pays carriage to the named destination.	Depends on the carriage contract: seller bears it if destination handling/unloading is included in the seller’s freight contract; otherwise the buyer is commonly invoiced at destination.	Whether “freight prepaid” includes DHC, tariff exclusions and carrier invoice.
DAP / DDP	Seller bears carriage costs to the named destination.	Costs required to reach the named destination generally fall to the seller; unloading at the delivery place falls to the buyer unless the carriage contract makes the seller responsible.	Whether the named destination is a terminal or warehouse; whether DHC is a cost to reach delivery or a post-delivery unloading cost.
DPU	Seller’s cost.	Seller bears carriage and unloading at the named place within DPU scope.	Distinguish unloading from other terminal/port charges arising after delivery.

Do not say “CIF means the seller pays everything”: under C rules, the seller contracts and pays carriage to destination, but some destination handling/unloading items may be excluded from that freight contract and collected from the consignee. Check the quotation and contract of carriage.

WHAT DOES THC NORMALLY INCLUDE OR EXCLUDE?

Item	Relationship to THC	Control point
Container handling at origin/destination terminal	Usually the core scope.	Read the carrier’s charge-code description and tariff.
Transfer between vessel and yard	Commonly related to THC, but detailed components differ.	Do not infer every terminal activity from the charge name.
Storage	Usually excluded.	Charged by days, free time and port tariff.
Demurrage / detention	Not THC.	Charges for container use or holding beyond free time.
D/O fee	Not THC.	Charge for delivery-order/documentation services.
CFS charge for LCL	Not identical to THC.	Relates to LCL warehouse handling, stuffing/stripping and cargo processing.
Lift-on/lift-off, customs inspection, scanning, shifting	May be separately charged.	Treat as included only when expressly stated.
Reefer, DG, OOG and special-equipment premiums	May be added or subject to separate THC tariffs.	Verify equipment, commodity and special handling.

CHARGING UNIT AND RATE VARIABLES

For FCL, THC is commonly quoted per container/equipment unit, differentiated by 20’, 40’, 40HC, 45’, dry, reefer and special equipment. Related services may be charged per shipment, bill or another basis.

Variable	Effect on charge	RFQ data required
Port/terminal and trade lane	Each location may have a different tariff and collection mechanism.	POL, POD and terminal where known.
Carrier/service contract	Published tariff and negotiated rates may differ.	Carrier, service and contract/quotation reference.
Container type and size	20’, 40’, HC, reefer, open top and flat rack may differ.	Equipment type and quantity.
Commodity	DG, OOG and reefer may require special handling.	Commodity, indicative HS, MSDS, temperature and oversize data.
Effective date	Carriers can revise tariffs.	ETD/ETA and quotation validity.
Pay term and currency	Affects invoicing location, exchange rate and taxes.	Prepaid/collect, payer, currency and tax treatment.

A current illustration of time sensitivity: on 31 March 2026, Maersk announced revised OHC from Vietnam to the world and DHC from the world, excluding China, to Vietnam, effective 1 May 2026 until further notice. An old tariff should therefore not be used to finalise a new shipment’s landed cost.

DOCUMENTS AND DATA TO VERIFY

Document/data	Issuer/preparer	What to verify	Risk if omitted
Sales Contract / Purchase Order	Buyer and seller	Incoterms® 2020, named place/port, local-charge and reimbursement clauses.	Dispute over OHC/DHC.
Freight quotation	Carrier/forwarder	Included/excluded, OHC, DHC, currency, tax, validity and equipment.	Comparing different scopes.
Booking confirmation	Carrier/forwarder	Booking party, payer, POL/POD, equipment and charge terms.	Wrong invoice party or location.
Shipping Instructions	Shipper/forwarder	Freight prepaid/collect and specific THD/DHC instructions.	Carrier applies default invoicing rules.
Bill of Lading	Carrier/NVOCC	Freight term, shipper/consignee and places of receipt/delivery.	Mismatch with sales contract.
Debit Note / Freight Invoice	Carrier/forwarder	Charge code, port end, container number, tax and exchange rate.	Duplicate payment or weak dispute evidence.
Carrier/terminal tariff	Carrier/terminal	Effective date, equipment, commodity surcharge and local exceptions.	Use of expired tariff.

PROCESS TO IDENTIFY THE CORRECT THC PAYER

Identify the charge code and port end

Separate OHC/THO from DHC/THD; reject an undefined “THC” line where both ends may apply.

Read the sales contract

Confirm the Incoterms® version, named place/port and any specific terminal-charge clause.

Read the carriage contract and pay term

Confirm the booking party, freight prepaid/collect, DHC prepaid/collect and carrier invoice party.

Match the quotation scope

Check whether ocean freight includes OHC/DHC; never treat “all-in” as unlimited.

Lock data before ETD/ETA

Confirm charge code, amount, currency, tax, payer, validity and adjustment conditions in writing.

Post to landed cost and reconcile

Allocate THC to shipment/SKUs under internal accounting policy and retain quotation, invoice and payment evidence.

COMMON RISKS AND ERRORS

Error	Cause	Impact	Control
Assuming ocean freight includes THC	Quotation shows only basic freight.	Origin/destination budget gap.	Request an included/excluded breakdown.
Assuming CIF includes DHC	Confusing carriage obligation with carrier invoicing scope.	Collect invoice and commercial dispute.	Confirm DHC prepaid/collect under the carriage contract.
Duplicate THC payment	The same charge is recorded under different names by seller, forwarder and consignee.	Inflated landed cost.	Match charge code, container and invoice reference.
Confusing THC with CFS, D/O or storage	All local items are grouped as “port charges”.	Wrong cost source and allocation.	Separate each charge code and calculation basis.
Using an old tariff	No effective-date check.	Late price adjustment.	Lock validity against ETD/ETA.
Incoterm without named place	Contract says only “FOB” or “CIF”.	Unclear cost boundary.	State rule + named place/port + “Incoterms® 2020”.

AUTHORITATIVE SOURCES

THC is a commercial/service charge within the transport chain, not a universal customs tax. Incoterms® allocates costs between buyer and seller; carrier/terminal tariffs determine the charge code, amount, effective date and invoicing term.

Source	Use in this guide	Application note
ICC – Incoterms® 2020	Official source on allocation of tasks, costs and risks.	Use the rules only when incorporated into the contract and state the named place/port.
ICC Academy – C and D rules	Explanation of transport and destination-unloading costs.	Relevant to CFR/CIF/CPT/CIP/DAP/DDP/DPU.
Maersk – OHC/DHC descriptions	Official carrier description of terminal handling at origin/destination.	Actual tariff and scope remain country/trade/contract specific.
Maersk – Vietnam OHC/DHC notice, 31 March 2026	Evidence that tariffs carry effective dates and are revised.	Do not apply an old notice to a different shipment date.
Hapag-Lloyd – payment-term example for selected European markets	An official example showing that freight prepaid does not automatically make THD/DHC prepaid and that Shipping Instructions should specify prepaid/collect.	The notice has a defined market scope and should not be generalised to every carrier or trade lane.
Hapag-Lloyd – Local Charges & Service Fees	Country-level local tariff reference.	Check the latest version at booking.

Sources checked on 16 July 2026. Reconfirm the shipment-specific tariff, service contract and quotation before use.

FAQ

1. Is THC included in ocean freight?

It may or may not be. Many quotations separate THC from basic freight, while some conditional all-in rates include it. Check the included/excluded list.

2. Do both shipper and consignee pay THC?

A shipment may have OHC at origin and DHC at destination, so each party may pay one end. Final economic responsibility still follows the sales contract.

3. Is THC the same as every port lift charge?

No. THC is a carrier/forwarder charge for terminal services; lift-on/lift-off or special terminal moves may be separate.

4. Does LCL cargo have THC?

There may be terminal-related charges, but LCL commonly carries CFS/handling based on W/M, CBM or shipment. Use the LCL quotation.

5. Does “freight prepaid” mean DHC is also prepaid?

Not necessarily. Under the payment conventions of some carriers or markets, freight prepaid may still be paired with DHC/THD collect unless Shipping Instructions state otherwise. Confirm DHC/THD for the specific carrier and trade lane.

6. What if the carrier’s THC differs from the quotation?

Check the charge code, effective date, equipment, commodity, contract number and payer; support the dispute with the quotation, booking, shipping instructions and invoice.

APPLICATION NOTE: The THC payer depends on the incorporated Incoterms® rule, named delivery point, carriage contract, prepaid/collect instructions, carrier/terminal tariff and any special agreement. Do not infer the answer from an Incoterm name or the phrase “all-in” alone.

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