Three forwarders quote the same container on the same route in the same week, and the numbers differ by a factor of three. Usually nobody is lying. They are quoting different scopes, and the cheapest headline number reliably belongs to the quote with the most missing lines. This article is for companies shipping FCL or large LCL consignments from China and explains what sits inside a freight bill, so two quotes can actually be compared.
The structure of a freight bill
- Ocean freight (base rate). What the carrier charges to move the box, port to port. Often the smallest component on short-sea or low-rate markets, and the only number in a bad quote.
- Origin charges. Export documentation, customs declaration in China, origin terminal handling, sometimes drayage from the factory.
- Surcharges. The alphabet soup below.
- Destination charges. Destination terminal handling, delivery order, import documentation, storage.
- Inland and customs. Haulage, brokerage, duty and VAT — outside the freight quote entirely, and covered in landed cost of a China import.
The surcharges, in plain terms
- THC — Terminal Handling Charge. Cargo handling at the terminal, charged at both ends: OTHC at origin, DTHC at destination. A quote that omits DTHC will look wonderfully cheap until arrival.
- BAF — Bunker Adjustment Factor. The fuel surcharge, recalculated monthly or quarterly. Commonly a substantial share of the base rate rather than a rounding item.
- LSS — Low Sulphur Surcharge. Introduced with the IMO sulphur cap; most carriers have folded it into BAF, some still bill it separately. Watch for it appearing twice.
- CAF — Currency Adjustment Factor. Covers exchange-rate movement between the carrier's costs and the billing currency.
- PSS — Peak Season Surcharge. Applied during high-demand periods, and it does exactly what the name says: it is a demand charge, not a cost pass-through.
- GRI — General Rate Increase. A carrier raising rates across an entire trade lane on a set date. On US-bound trades, carriers must announce it in advance; elsewhere the notice period is shorter or informal.
- ISPS — port and vessel security surcharge. Small, fixed, unavoidable.
- ENS / AMS / ICS2 — advance security filings. Administrative charges for the mandatory pre-arrival data filings, not fuel or handling.
- Documentation / B/L fee. Issuing the bill of lading — see the bill of lading explained.
- Equipment and imbalance surcharges. Charged where empty containers are scarce at origin.
Why the same route gives such different numbers
- Different scopes. Port-to-port versus door-to-door is the single biggest reason. Compare Incoterm to Incoterm, not price to price — see Incoterms 2020 for imports from China.
- Excluded destination charges. DTHC, delivery order and documentation at the destination end are the classic omissions from a headline quote.
- A rate valid on a date you cannot use. Rates expire; a quote valid until the 15th is not a quote for a cargo ready on the 20th, especially across a GRI date.
- Space that does not exist. A cheap rate with no confirmed allocation gets rolled in peak season, and a rolled booking costs more than the difference ever saved.
- Free time. A quote with three free days and a quote with ten are not the same product, as demurrage and detention explains at some cost.
- Different container types or weight limits, which matters most for dense cargo — see container loading calculations.
How to compare quotes properly
Ask every forwarder for the same thing, in writing:
- An all-in rate with each line itemised: ocean freight, BAF, LSS, OTHC, DTHC, ISPS, ENS, documentation
- The Incoterm and the exact scope — where the price starts and stops
- Validity dates, and whether a GRI or PSS is announced inside your shipping window
- Free days, demurrage and detention, stated in calendar days
- Whether space is allocated or indicative
- What is explicitly excluded — the most informative question on the list
Then compare totals at the same scope. A rate that is 20% cheaper on ocean freight and excludes destination handling is usually not cheaper at all.
What is negotiable and what is not
- Negotiable: the base ocean rate, free time, documentation fees, and often the forwarder's own margin lines. Volume and a forward pipeline are the levers.
- Semi-negotiable: PSS and GRI timing — you cannot remove them, but you can often book before they apply, which is why timing beats haggling.
- Not negotiable: ISPS, security filings, terminal handling at published tariff, and duty.
The largest saving available to most importers is not a discount. It is booking before a GRI or peak-season window rather than into it — the market signals for which are in freight rate indices, and the seasonal shape of it is in China's holidays and shutdowns.
Where the route itself changes the arithmetic
Rates are not only a function of demand. Routing changes transit and cost together — the Asia–Europe picture has been reshaped by Red Sea routing and Suez transits, and for some cargo the comparison is not sea versus sea but sea versus rail or air: see rail versus sea freight from China and sea versus air.
A freight quote is not a price. It is a price attached to a scope, a validity window and an allocation. Change any of the three and the number changes — which is why the cheapest quote and the cheapest shipment are so rarely the same one.
Getting a comparable number
We quote all-in with every line itemised, name what is excluded, hold free time as part of the negotiation rather than an afterthought, and book against real allocation rather than an indicative rate. Seven years and 3,500+ deliveries — real projects are in our case studies.
See sea freight, cargo consolidation or full logistics from China.
