Recently a customer asked what the shipment’s destination charges included and why they always seem to be different between Australian freight forwarding companies.
Read the definition of destination charges in the freight forwarding industry and learn why there are differences of costs.
UPDATE: find an updated version of this blog post on the following page: What are Destination Charges in the Freight Forwarding and Shipping Industry?
What are destination charges? Please give me a definition.
In the freight forwarding industry destination charges, or sometimes also referred to as local charges, are fees that occur at the destination port of your cargo. Therefore in the logistics industry they are not directly considered as freight charges. The fees cover movement, unpacking, inspection and further administrative tasks that your cargo has to undergo at the port of destination.
Destination charges differ from port to port. Sometimes changing the shipping line and / or terminal can save significant costs, since they are actually invoicing the destination or local charges. For that reason destination charges are always a part of a supply chain analysis and optimisation that we do for our customers.
Would you like to know more about our supply chain analysis or receive a supply chain analysis of your supply chain? Contact us and one of our team members will assist you with optimising your supply chain and detecting unnecessary costs.
Why are destination charges different between companies?
Destination charges vary between shipping lines and again, vary depending on the origin of the goods, i.e. the trade lane (Europe vs. North America vs. Asia). Not only are the destination port charges different depending on these two factors, but some freight forwarders also use these charges as a form of revenue, and as such slightly increase destination port charges. This is common practice and is to cover costs and any shipping line increases; however some freight forwarders may charge a lot higher.
It is important to compare these amounts when looking at different freight forwarding companies. Destination charges can be grouped or ungrouped. I.e. on a quote the charges may be one lump sum, or broken down.
At the end of the day, it is important to look at your entire quote. A low ocean freight charge may mean higher destination port charges, and vice versa. NB. Port charges are always available online for each individual shipping line via their website.
Do you have questions about the destination charges of the destination port and shipping line you are using? Or are you worried about your overall supply chain costs? Would like to know more about how to optimise your supply chain? Contact us.
BCR is an Australia-based freight forwarding and 3PL company. As a freight forwarder with offices in Sydney, Melbourne, Brisbane and Fremantle/Perth we are located at Australia’s largest ports and industrial areas. As one of Australia’s oldest freight forwarding and 3PL company we have many years of experience and are happy to assist you and your company with our services.