Ocean Freight Costs Explained: What You're Actually Paying For

You asked for a freight quote, received a document full of acronyms and line items, and now you're wondering what half of it means. You're not alone. Ocean freight pricing is notoriously complex — the base rate is just the starting point.

The Base Ocean Freight Rate

The base rate is what the shipping line charges to move your container from the origin port to the destination port. It's quoted per container (for FCL) or per cubic metre or tonne (for LCL), and it fluctuates based on route demand, vessel capacity, season, and fuel prices.

Common Ocean Freight Surcharges

BAF/FAF (Bunker Adjustment Factor) — Covers the carrier's fuel costs. Applied per container or per freight ton and is one of the most variable charges on your invoice.

PSS (Peak Season Surcharge) — Applied during high-demand periods (typically July through October) when vessel space is scarce.

GRI (General Rate Increase) — Blanket rate increases applied across trade lanes, often announced with 30 days' notice.

ECA Surcharge — Ships passing through Emission Control Areas (such as the North American coastline) must use low-sulphur fuel; this surcharge covers that additional cost.

Origin Charges

These are fees charged at the port of loading: Terminal Handling Charges (THC) for receiving and loading your container, documentation fees for preparing the Bill of Lading, export customs clearance fees, and — for LCL shipments — container stuffing fees at the Container Freight Station.

Destination Charges

At the port of discharge, you'll encounter destination THC, customs clearance fees (your broker's charge for filing with the CBSA), port disbursement fees, and drayage — the trucking move from the port to your warehouse or facility.

Detention and Demurrage — The Fees That Catch People Off Guard

Demurrage is charged when you don't pick up your container from the terminal within the free time period (typically 3–5 days after vessel arrival). Detention is charged when you keep the container beyond the free time allowed for unpacking. Both can add hundreds of dollars per container per day. The best way to avoid both: have your customs clearance ready before the vessel arrives and arrange pickup as soon as the container is released.

What a Good Freight Forwarder Does for Your Costs

A knowledgeable freight forwarder doesn't just book space on a ship — they actively work to minimize your total landed cost. That means selecting the right carrier and routing, consolidating LCL shipments, flagging upcoming GRIs, coordinating customs clearance to avoid demurrage, and providing all-in quotes so there are no surprises at invoice.

If you'd like a transparent, all-in quote for your next ocean freight shipment from or to Canada, reach out to Freighter Logistics.