Importers need to make sure they are taking absolutely all the associated costs into account when calculating the buying and selling figures for their goods. This is especially true when bringing in a new product for the first time.
When calculating landed costs, there is a lot more to be considered than the main items of invoice price, freight, insurance and duty. For those using containerised sea cargo, some of the less obvious but significant charges are those incurred at shipping terminals.
Stevedore-imposed Terminal Access Charges (TAC) are a standard part of commercial shipping practices impacting the cost of your product. Unlike the actual freight rates, these are charges that freight forwarders, transport operators, importers and exporters cannot negotiate.
Types of fees
Broadly speaking, we can divide these terminal charges into two areas. Landside Services cover the loading and unloading of containers on and off trucks and rail wagons at container parks, which differs from Quayside Services, covering the loading and unloading of a vessel.
Some of the many names allocated to these have been around for a while, such as Port Service Charge (PSC), Terminal Handling Charge (THC) and Timeslot Fees, while others have been introduced more recently, including Vehicle Booking Charges (VBS), Port Security Charge, Maritime Security Levy and Pondus Fees.
Charges Increasing from 01 January 2025
The largest national stevedores, Patrick and DP World, have announced TAC increases for Brisbane, Port Botany and Fremantle commencing 01 January 2025, after complying with government requirements to give 60 days’ notice. These are generally in the rage of 5 to 10%, but some individual services will be over 20% higher.
Industry and authorities monitor terminal fees
Spokespersons for our industry have made representations to the Australian government about the burden placed on importers by TACs. We are mindful that stevedores are subject to inflationary costs and the need for infrastructure investment, while operating in a competitive environment, but advocates continue to call for transparency on how TACs are calculated.
The ACCC issues an annual report – the next one is due very soon – and they have been critical of the rising terminal costs that are passed down to importers – and ultimately on to the consumer – noting that this contributes to inflation in Australia through higher prices for imported goods.
Last year, the government’s Productivity Commission issued a report in which they observed, “Transport operators have no choice about which terminal they use when picking up or dropping off a container, so must pay whatever price a terminal operator sets. Recent rapid increases in terminal access charges (TACs) have flowed through to cargo owners (and consumers).”
Be aware of all fees to include in landed costings
Some of these costs can be difficult to identify and complex to calculate, but it is important that you are aware of them when you are placing orders overseas and determining your selling price and profit margin. Accurate measurement of landed costs reassures you that you are recouping all your expenses on each inventory Item.
That’s where Colless Young comes in. We can provide you with a full landed cost report which will include all the associated charges levied at the wharf or shipping terminal. Many clients like to see these lumped together under the heading of Port Service Charges. Should you prefer to see this broken down further with all components itemised separately, we are happy to provide the report reflecting this.
For more information about estimating charges prior to ordering, as well as final costings reports at the time of delivery, talk to us here at Colless Young.
Contact Andrew, email enq@collessyoung.com.au Tel: +61 7 3890 0800.
