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Ocean Freight FAQ Frequently Asked Questions

FCL or Full Container Load is a standard set by the ISO (International Organisation for Standardisation) which refers to one 20 or 40ft container filled with cargo. A shipper uses up the space of the entire container.

LCL or Less than Container Load refers to a shipment that doesn’t fill one 20 or 40ft standard container. In the case of LCL, several shippers load their cargo into a single container. While LCL is the cheaper option for small shipments, it costs more money per unit of freight as compared to FCL.

IHC stands for Inland Haulage Charges and refers to the transportation charge incurred due to transportation of containers from inland container freight station to the port of loading and vice versa. When the port of loading is away from the cargo freight station, the shipper has to make arrangements for moving the cargo from the freight station to the port either by road or rail. In this case, custom formalities are completed at the freight station.

If the goods are moved by rail, then Inland Haulage Charges refer to the charge of transporting goods from such location to the concerned seaport. IHC is collected by the shipping line when it generates the bill of lading for export shipments. In case of import orders, it’s released at the time of issuing a delivery order.

An ocean carrier that moves cargo under its own House Bill of Lading or an equivalent document and does not operate the vessels by which ocean transportation is provided is called a Non-Vessel Operating Common Carrier (NVOCC).

Port free days refers to the number of days for which a port allows the importer to keep the containers in the port area for free. Once the limit of port free days is exceeded, the port storage charges published in the port tariff are applied.

On the other hand, line-free days is the number of days the shipping line gives to the customer to pick up a full container, take it to their facility for unpacking and return the empty container to the concerned shipping line. After the line free days, the shipping line imposes a charge for every extra day taken by the customer to return the container.

Majority of businesses across the globe rely on the ocean for moving their goods internationally. Ocean shipment is known to be a cheaper option as compared to air shipment. Here is a list of some of the factors that determine or influence the ocean freight rates:

The ability of the shipper to negotiate rates with the freight forwarder/carrier
Bunker fluctuations
Service charges levied by the stakeholders involved
Fluctuations in currency
Costs involved in handling and clearing goods at the port of loading and port of destination.
Whether a shipment requires a dedicated Full Container Loading (FCL) or it’s small enough to be consolidated with other cargo that is Less than Container Load (LCL)

As the name implies port charges refer to the charges levied by port authorities on the containers it handles. Some of the port charges involved in container shipments

Shipping goods is quite a complex process and an integral part of this process is dealing with a wide range of taxes involved. Taxes are mandatory financial obligations levied by governing authorities on goods and services, income, etc..

The duty or tax-free amount is known as ‘de minimis value.’ It is a country-specific value and taxes are exempted below this value. The de minimis value usually differs for duties and taxes.