There are various types of collect, prepaid, and third-party charges for different activities that occur during a shipment. Popular examples include terminal handling fees at the origin and destination, customs surcharges, broker fees, routing charges, and more.
However, one of the most popular charges many people don’t know about is the Destination Delivery Charge. A Destination Delivery Charge (DDC) is an accessorial charge levied by carriers and is used to cover crane lifts, container drayage, and terminal/gate fees when moving full-container load (FCL) shipments.
The additional fee is only applicable to FCL containers and is passed on to shippers or consignees. The destination delivery charge is not standardized across carriers and is typically based on the size and/or of the container (cubic meters or metric tons).
In this article, we’ll explore the concept and details of destination delivery charges so you will be able to understand what they cover, who pays them, and how they’re billed.
What Do DDC Charges Cover?
DDC charges vary from carrier to carrier. There’s no universal charge set by any local or international authorities for Destination Delivery Charges since they arise from the varying terminal gate, drayage, and crane fees.
Carriers charge these fees based on a variety of factors that include the type of cargo, number of containers, port/terminal location and conditions, economic conditions, and more. Let’s take a look at some of these costs in more detail.
Terminal Gate Fees
The destination terminal gate fee is a charge for offloading containers from an ocean vessel to a container yard. The terminal fee also covers the visual inspection and handling of shipping containers, if these charges aren’t already included in the overall shipping fees.
Drayage refers to the transport of a shipping container from the seaport to the final delivery location of the consignee. It’s generally used for short-distance deliveries or as part of longer-distance transit.
The drayage costs are calculated based on a variety of items that include the cost of hiring a trucking company, loading and offloading equipment, labor, storage, and more.
Port cranes are among the most important types of equipment used in the shipping industry. They’re used to load, unload, and move cargo (specifically shipping containers) to and from a vessel.
As a result, fees that arise from using these port cranes are a major contributor to the overall Destination Delivery Charge. Modern seaports are equipped with container cranes (also called quay cranes) that are designed to load and unload containers to and from large ocean vessels.
Port cranes are expensive and require highly skilled and experienced personnel to operate. They’re also costly to maintain and replace. As a result, most terminals charge carriers fees for using port services that include crane usage, container shunting, and more.
How Are DDC Charges Billed?
As mentioned above, Destination Delivery Charges vary according to the carriers, ports of discharge, and other factors. Therefore, there are no standardized ways that carriers charge the shippers or the consignees.
However, to simplify the process, most carriers invoice the destination delivery charges according to:
- Container size
- Cubic meters
- Metric tons
These charges are usually added to an ocean freight invoice as a separate line item. As a result, they can’t usually be waived unless in special circumstances where they’re not listed specifically as a line item.
However, some carriers include DDC charges in their standard ocean freight rates or list them separately in the form of terminal handling charges (THC) or terminal receiving charges (TRC).
Who Pays for DDC Charges?
Destination Delivery Charges arise due to the costs of drayage, usage of terminal equipment such as cranes, and terminal gate fees at the port of discharge. Since carriers move cargo on the shipper’s or consignee’s behalf, the DDC charges are passed on to the respective freight owner.
Depending on the incoterms, either the exporter (shipper) or the importer (consignee) will need to pay the DDC charges.
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About the Author
Gerrit is a certified international supply chain management professional with 16 years of industry experience, having worked for one of the largest global freight forwarders.
As the co-founder of freightcourse, he’s committed to his passion for serving as a source of education and information on various supply chain topics.