Liner operators quote their freight rates on a liner term basis. A series of highly specialised operations are required in the process of loading cargoes efficiently into a ship, and securing those cargoes in the ship’s hold for safe transportation to the port of destination. Another series of equally highly specialised operations must take place in order to extract the cargo from the ship’s hold and place them safely on the quayside at the port of destination. All these costs are collectively known as terminal handling charges – THC.
Payment of freight
The word “freight” has two alternative meanings: it may be used to refer to the movement of the cargo; by road, rail sea or air, or it may be used to denote the charge raised by the carrier for the service of transportation.
In the context of international carriage by sea, the “tariff currency”, is the United States Dollar. It is common practice in the shipping industry that freight is payable as the consignment/cargo is loaded on board the intended vessel.
Immediately the cargo has been placed on board, the shipping company is entitled to full payment, even though the ship may sink along the quayside at the loading berth. The amount of freight due is paid either at the port of loading in exchange for the issuance of the original bills of lading, or at the port of discharge in exchange for the release of the consignment from the shipping company’s custody. When freight is paid in any currency other than the “tariff currency”, the amount due in that “tariff currency”, will be converted at the rate applicable on the date of shipment or such other date as agreed upon by the carrier.