What this line on the invoice is.
On an ocean shipment invoice, "freight" is usually only one of the lines. On top of it sit terminal handling (THC), fuel (BAF), currency (CAF), season (PSS), security (ISPS) and, by now, emissions (ETS). Most of these have no international regulatory definition — they are commercial items based on a tariff the carrier publishes unilaterally. And they do not all come from the same party.
Which item comes from whom
This is the answer to "why do so many invoices arrive". On one shipment at least three separate parties charge, and each has its own tariff.
Surcharge glossary
These abbreviations are used in English throughout the trade. What they have in common: none has an international regulatory definition; each depends on the carrier's tariff and can be changed unilaterally.
| Abbreviation | Full name | What it covers |
|---|---|---|
| THC | Terminal Handling Charge | Handling of the container at the terminal: loading and discharge, yard moves, crane. Arises separately as OTHC at origin and DTHC at destination. |
| BAF | Bunker Adjustment Factor | Pass-through of changes in fuel prices. |
| CAF | Currency Adjustment Factor | Pass-through of exchange-rate movements. |
| PSS | Peak Season Surcharge | An extra charge tied to demand in the peak season. |
| GRI | General Rate Increase | A general rate increase effective from a given date. |
| LSS | Low Sulphur Surcharge | The cost of the obligation to burn low-sulphur fuel. |
| ISPS | International Ship and Port Facility Security | The cost of ship and port facility security measures. |
| ERS | Emergency Rate/Risk Surcharge | Extra cost arising from a route change or an emergency. |
| CIC | Container Imbalance Charge | The cost of empty container imbalance. |
| ETS | Emissions Trading System | Pass-through of the cost of EU emission allowances — see below. |
This page gives no amount for any surcharge. Amounts vary by carrier, lane, direction and effective date; we do not publish tariffs we cannot verify. Confirm your own figures from your contract of carriage and the tariff published by the carrier.
What changed in 2026: ETS at 100%
The EU Emissions Trading System has covered shipping since 2024, and carriers pass the cost of allowances through as a separate per-container item. The obligation was phased in:
- 2024
- Allowances surrendered for 40% of verified emissions
- 2025
- 70%
- From 2026
- 100% — and the scope is no longer limited to CO₂: methane and nitrous oxide are included
The practical consequence: EU-lane price lists built on a 2025 budget do not hold in 2026. The rate went from 70% to 100%, and on LNG-fuelled ships methane entered the scope as well. In many quotations the ETS item is also given as "estimated" and the final amount invoiced later — when you take a quote, ask whether this item is estimated or final.
Is "all-in" really all in
No — and this is the most frequently misread part of a quotation. "All-in" is not a standard definition; every carrier and every forwarder means its own scope by it.
Ask these four questions in writing when taking a quote:
- Is destination THC included? Under the C rules (CFR, CIF, CPT, CIP) this is the item most often disputed.
- Are delivery order and documentation fees included? They usually arise on the agent's side and do not appear in the freight quote.
- Is the ETS item estimated or final?
- Are surcharges fixed or subject to tariff? If the contract says "surcharges are subject to the carrier's tariff in force", you do not have a fixed price.
Which item belongs to whom under each delivery term is set out line by line in the cost allocation table.
Why a quote breaks: GRI and PSS timing
The classic scenario: a quote is given, the buyer accepts, the booking is made — but in the week of loading a GRI or a PSS takes effect on the 1st or the 15th of the month. A booking that is accepted but not yet loaded falls under the new tariff.
The result: the forwarder is squeezed between the price it fixed for its customer and the price it gets from the carrier. An exporter with a three-month fixed freight agreement also meets a PSS that takes effect mid-month.
Read a quote's validity against the loading date, not the booking date. Every GRI/PSS effective date in between is your risk. When taking a quote, ask in writing "until which date and on which conditions is this price valid".
If you see "surcharges are subject to the carrier's tariff in force" in the contract, you do not have a fixed price. In long-term agreements, have it written item by item which lines are fixed and which are left open.
When disputing an invoice, pick the right counterpart first. Writing to the terminal about a carrier item, or to the carrier about a terminal item, wastes time — and meanwhile the clocks keep running.
When it goes wrong
Destination THC is assumed to belong to nobody
On a CFR or CIF sale the seller pays the freight and the bill of lading says "freight prepaid". The buyer sees this and refuses to pay THC at destination; the container waits at the terminal and demurrage starts.
Do this: write into the contract whether destination terminal charges are included in the freight. This is the known gap in the C rules.
A quote thought to be fixed is not fixed
A three-month agreement is made but surcharges are left to tariff. A PSS kicks in mid-month and the price changes. Because the contract text allows it, the ground for objection is weak.
A 2026 budget built on a 2025 price list
On EU lanes the ETS rate went from 70% to 100% and methane and nitrous oxide were added to the scope. A budget prepared on the old list does not hold.
The invoice arrives as a single line and no breakdown is asked for
When the total is invoiced as one item, the amount of each surcharge is invisible; if there is a line that could be disputed, it is not noticed.
Do this: ask for item name, quantity and unit price to be shown separately on every invoice.
Frequently asked
Who pays THC?
It depends on the delivery term and the contract. Origin THC generally arises on the export side and destination THC on the import side — but under the C rules whether destination THC is included in the freight depends on the contract of carriage, and that is where the dispute most often starts.
For the line-by-line split see the Incoterms cost allocation table.
Can I dispute surcharges?
Surcharges rest on a tariff the carrier publishes unilaterally, so "this charge should not exist" rarely gets anywhere. What can be disputed is the calculation itself: was the item in your contract, was the correct tariff applied, does the effective date cover your shipment.
That is why getting in writing at quotation stage which surcharges will apply is far more effective than disputing afterwards.
Why do freight rates move so much?
Base freight moves with supply and demand; fuel, currency and season surcharges sit on top. Route disruptions and capacity changes can produce large swings in a short time.
We give no current level or forecast on this page. For market data see UNCTAD's annual maritime transport review and the carriers' own tariff announcements; if you ask us, we price your own lane today.
Does the ETS item appear on every shipment?
It appears on voyages within the scope of the EU Emissions Trading System — voyages to EU ports, from EU ports and between EU ports. On lanes outside the scope the item does not arise.
How the amount is calculated and passed on to the shipper varies by carrier; ask whether the quote shows it as "estimated" or as final.
Sources
- European Commission — Inclusion of maritime transport in the EU ETS (FAQ) Phase-in of the obligation: 40% in 2024, 70% in 2025, 100% from 2026; methane and nitrous oxide within scope from 2026 · climate.ec.europa.eu · accessed 1 Sep 2026
- UNCTAD — Review of Maritime Transport 2025 Institutional data on the freight market and surcharge structure · unctad.org · accessed 1 Sep 2026
- FIATA — Practical guides Surcharge and contract practice for freight forwarders · fiata.org · accessed 1 Sep 2026
- EU — Consortia block exemption regulation for liner shipping (2020/436) The exemption expired on 25 April 2024 and was not renewed; liner cooperation is now subject to the general competition rules · eur-lex.europa.eu · accessed 1 Sep 2026
This page is for information only. None of the surcharges has an international regulatory definition; they are commercial items tied to the carrier's tariff and changeable unilaterally. Naming and scope vary from carrier to carrier. No tariff figure appears on this page — confirm your own figures from your contract of carriage and the tariff published by the carrier.
Change log
- Page published as the English counterpart of the Turkish page of 1 Sep 2026. EU ETS phase-in rates and the inclusion of methane and nitrous oxide from 2026 verified on the European Commission's FAQ page.