The impact of terminal handling charges on overall shipping charges : an empirical study

Michael K. FUNG*, Leonard K. CHENG, Larry D. QIU

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)peer-review

25 Citations (Scopus)


Before the introduction of terminal handling charges (THCs), traditional freight rates included both ocean freight charges and terminal charges at ports. Since the introduction of THCs in 1991, the freight rate has become a “port-to-port” charge that covers only the sea leg, while the on-shore costs of using the container terminals are charged separately as THCs. Although both THCs and freight rates are collectively set by conferences, in this study we argue that the former are easier to enforce because they are invariant to other attributes such as haulage distance, inland transport services and types of commodity being shipped. This argument is consistent with the empirical findings from this study that suggest the separation of ocean freight rates from terminal charges has increased the overall shipping charges. In addition, we find that THCs affect the Hong Kong container handling industry by lowering its throughput.
Original languageEnglish
Pages (from-to)703-716
Number of pages14
JournalTransportation research PART a-policy and practice
Issue number8
Early online date6 May 2003
Publication statusPublished - Oct 2003
Externally publishedYes


  • Port
  • Shipping
  • Terminal handling charges
  • Transportation


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