Ocean Freight Quote: Which Line Items Should You Check?

An ocean freight quote is more than the base rate on its first line. It usually lists terminal handling, fuel and currency adjustments separately, so confirm what is included and who pays each item before you compare numbers or accept the booking.

Key takeaways

• Base ocean freight is the carrier’s charge for moving the container; add separately listed items such as THC, BAF and PSS to compare the total cost.
• Origin and destination THC are allocated by the Incoterm and the sales contract; also check the quote’s validity and the date on which surcharges apply.
• Even an “all-in” quote can exclude destination charges, so get the inclusions and exclusions in writing.

How is an ocean freight quote put together?

An ocean freight quote is the base ocean freight (O/F) plus surcharges and local charges. The base rate covers carrying the container from the port of loading to the port of discharge, and fuel, currency, peak-season and terminal charges are added on top.

FCL is priced per container and LCL on a weight-or-measure (W/M) basis, whichever is greater; see FCL vs LCL. Common surcharges on the base rate are:

• BAF (Bunker Adjustment Factor): recovers changes in bunker fuel prices
• CAF (Currency Adjustment Factor): offsets currency movements
• PSS (Peak Season Surcharge): applied when demand peaks

Terminal handling charges (THC) appear separately for the origin (OTHC) and destination (DTHC). For how BAF is set and revised, see BAF Meaning: When Does the Bunker Surcharge Apply?.

Who pays each line item?

Who pays each item is set by the Incoterm and the sales contract. The party paying the ocean freight does not necessarily pay every local charge, so check each line separately.

Item	Meaning	Typical payer
Base freight	Carrier’s ocean carriage of the container	Seller or buyer, depending on the Incoterm
BAF	Fuel-price recovery	Usually the freight payer
Origin THC	Terminal handling at loading	Seller under FOB and similar terms, buyer under EXW
Destination THC	Terminal handling at discharge	Usually the buyer under CFR or CIF
Documentation fee	Bill of lading issuance and similar	Per carrier or forwarder policy

The table shows common practice; if the contract of carriage includes unloading costs at destination, the seller may pay them even under CFR or CIF. The full cost split is in the Incoterms 2020 summary, and THC allocation is covered in What Is THC?.

How do you compare two quotes?

Compare quotes on the total of every line, not on the base rate. The figures below are hypothetical.

Suppose quote A shows base freight of USD 1,200, origin THC of USD 150, destination THC of USD 250 and BAF of USD 180. The total is 1,200 + 150 + 250 + 180 = USD 1,780. If quote B shows USD 1,500 with surcharges bundled, it looks USD 280 cheaper, but check first whether B leaves out destination THC so you are comparing like with like.

No Korean-won conversion is shown because no verified exchange rate is used. To carry the freight into a full import cost with duty and VAT, see Landed Cost in Korea: How Do You Calculate It?.

What are the common mistakes with freight quotes?

The most common mistake is comparing only the base freight and ignoring surcharges. Others are assuming an “all-in” rate covers destination THC when it does not, and not checking how long the quote is valid.

BAF or PSS can be adjusted after the quote if fuel prices or capacity change, so ask for the surcharge reference date. The freight prepaid or collect marking on the B/L must also match the Incoterm; see Freight Collect vs Prepaid.

What should a freight quote request include? (SILENSEA checklist)

Quotes built on different assumptions cannot be compared. Fix the following points in the request so that answers from several forwarders fit into one table.

Item	What to state in the request	What goes wrong if it is missing
Route	Port of loading, port of discharge, inland door if needed	Inland haulage is billed separately later
Cargo	Commodity, packages, gross weight, CBM, dangerous goods or not	The LCL basis (W/M) shifts
Equipment	20ft / 40ft / 40HC and number of boxes	Quotes without equipment surcharges get mixed in
Incoterms	Rule and place, e.g. FOB Busan	Nobody agrees which THC belongs in the quote
Scope	Base freight, BAF, THC at both ends, documentation, seal	“All-in” means different things to different forwarders
Validity	Surcharge reference date and quote validity	Surcharges change right before sailing
Schedule	Target ETD, document and cargo cut-offs	Cheap freight on a sailing that does not fit

Putting two quotes side by side (made-up example)

The figures below are assumptions for illustration, not market rates. Mark missing lines as “not included” rather than zero, get the amount from the forwarder, and only then compare totals.

Line	Forwarder A	Forwarder B
Base freight	1,200	1,500 (surcharges included)
BAF	180	included
Origin THC	150	150
Destination THC	250	not included, ask
Documentation	50	50
Total (USD)	1,830	1,700 + destination THC

If B’s destination THC is above 130 dollars, A is cheaper. Filling the “not included” cells first is where a fair comparison starts.

FAQ

Which line is usually the largest on an ocean freight quote?

Base ocean freight is usually the largest single line. On some routes and in some seasons, though, BAF and THC together can exceed it, so add every item before comparing.

Does an all-in quote mean there are no further charges?

No. An all-in quote may still exclude destination THC or documentation fees. Ask the forwarder to list every inclusion and exclusion in writing.

Who pays THC?

It depends on the Incoterm and the sales contract. Under FOB the seller commonly pays origin THC and the buyer pays destination THC. Confirm the actual split on the quote and the contract.

How long is a freight quote valid?

It varies by carrier and forwarder, and the validity period is usually stated on the quote. If it is short, the rate can change after you book, so get the validity and surcharge reference date in writing.

Sources

• ICC, Incoterms® 2020
• Related: Incoterms 2020 summary, BAF Meaning, What Is THC?, FCL vs LCL