Airline Terminal Fee

Airline Terminal Fee: The Ultimate FAQ Guide

If you’re shipping from China or any country using air freight, you will definitely hear the term Airline Terminal Fee.

If you’re wondering what it is all about or, you’d like to learn more about it, then this guide has an answer for you.

Keep reading.

What is Airline Terminal Fee (ATF)?

Airline terminal fee is an amount charged by the airline authorities for airfreight handling.

It is charged both at the departure and destination airport depending on the airline policies.

Airports authorities do charge this fee for the use and maintenance of airport infrastructures and services.

They include bonded warehouses, labor (stevedoring), lifting equipment, wharf, containers, etc.

Loading cargo in airline

Loading cargo in airline

When is Airline Terminal Fee Applied?

Airline terminal fee is applicable to all airlines both passenger and cargo flights.

The fee is charged depending on the facilities used such as cargo handling areas, bonded warehouse, labor, etc.

Why do Airlines Charge Airline Terminal Fee?

Each airline is charged by the airport authorities for the terminal space they occupy and this increases cost of doing business.

In order to keep the business afloat, the airlines transfer part of the terminal fee to their airfreight customers.

Is Airline Terminal Fee the same as Terminal Handling Charges?

Yes.

Airline terminal fee and terminal handling charges are the same thing as they are both charged for use of airport infrastructure.

Origin terminal handling charge (OTHC) is applicable at the local airport of departure.

Conversely, the destination terminal handling charge (DTHC) is applied at the destination airport.

What does Airline Terminal Fees Include?

Airline terminal fees cover cargo services such as weighing, storing, inspection of goods, provision of documents for clearance, etc.

This also includes; unloading of goods from arrival container and loading to the transfer vessel.

What is an Origin Airline Terminal Fee?

Origin airline terminal fees is payable at the airport of departure of the cargo.

This caters for weighing, goods inspection, provision of shipping documents and loading into the flight.

This cost is paid as per the incoterm rules applied in the contract.

How does Airline Terminal Fee work?

Airline terminal fee is regulated by national authorities of the respective country irrespective of type of airport ownership.

The charging system is charges based on the service and facilities to be used by the aircraft at the airport.

This common standardization eliminates discrimination of certain airlines in certain airports in terms of charges.

Therefore, a cargo aircraft will pay for cargo related terminal fees whilst passenger aircraft pays for passenger terminal fees.

Who pays Airline Terminal Fees?

The seller or the buyer can each pay for the airline terminal fees for the same shipment but at different airports.

This payment is guided by the incoterms applicable for the airfreight being shipped.

For instance, Ex-Works shipment are paid for by the buyer for both load and destination airport.

Incoterms such as Carriage Paid To (CPT) has the seller pay for ATF at the departure airport and seller at the destination airport.

It is important to understand the terms of the contract to avoid double or unexpected airline terminal fees.

How do you Calculate Airline Terminal Fees?

The airline terminal fees calculation is dependent on a number of variables. These include:

  • Type of airplane
  • Airplane weight
  • Arrival and departure time
  • Origin and destination airports
  • Transfer/transit costs
  • Weight of cargo
  • Noise level
  • Security charges
  • Landing and takeoff charges
  • Emission charges
  • Parking charges

Do you need to Pay Airline Terminal Fee at the Airport?

China Airlines Cargo

China Airline Cargo

The payment of the airline terminal fees depends on the policy of the airport.

Some airports include it in the freight forwarding invoice fee.

If it’s not included in the freight forwarding invoice then you will pay directly to both origin and the destination airports.

These payments can be done using credit cards, online or by cheque to offer flexibility for the customers.

How do you Pay for Airline Terminal Fees?

Airline terminal fees can be included in the freight forwarding invoice for your shipment or be paid directly to the airport authority.

Freight forwarders do not add their margins on this cost thus you can check the respective airport website and pay.

Is Airline Terminal Fee Refundable?

Yes.

When you pay for the airline terminal fee and you do not ship by airfreight, you are eligible for a refund.

This is only done upon providing a proof of airfreight payment.

Do you need to Pay Airline Terminal Fee even after Paying Import Duties and Taxes?

Yes.

Duties and taxes are charged on goods being imported and exported as per their respective harmonized tariff schedule per country.

On the other hand, airline terminal fee is charged for cargo handling at the airport.

How do you now if Airline Terminal Fees are included in your Freight Charge?

Airline terminal fees may be included in the cumulative air freight cost or charged separately depending on the delivery type.

Door-to-door shipping aggregates all the costs involved and provide in one invoice whereas other delivery methods separate them.

It is important to understand the airfreight quotations provided to you before embarking on cargo shipment.

Where the costs are not clearly indicated, the freight forwarders can explain to you to avoid incurring unanticipated costs.

Are there Exemptions for Airline Terminal Fee?

No.

Airline terminal fee is a mandatory charge on all airlines both signatories and non-signatories provided they are using the airport infrastructure.

This cost goes into the maintenance of the infrastructure in question such as runways, storage, equipment and payment of labor.

The airlines in turn, pass this cost to their customers in airfreight costs for cargo flights at a certain rate.

What Conditions Apply for Airline Terminal Fees?

Airline terminal fees should be guided by the following conditions:

  • The airline terminal fee charging system should be simple for general application at various international airports.
  • Airline terminal fees should be non-discriminatory to both national and foreign users who provide similar cargo services.
  • The fees should not be imposed in a way that discourage users from using the airport facilities and services.
  • Any increase of charges should be introduced gradually to avoid discouraging users and communicated in advance.

Some cases may not allow the gradual introduction and that is understandable.

  • Airport authorities should be flexible to accommodate the different airport facilities users.
  • The charges should be consolidated in one invoice to the airlines where the services are managed by different entities.

The revenues can thereafter be distributed to individual entities after collection from airline.

Are Airline Terminal Fees applicable in Express Shipping?

Yes.

This is paid to the freight forwarding company as part of the express services fee.

Who Collects Airline Terminal Fees?

Airline Terminal fees is collected by the authorized terminal officials at respective airports.

When the carrier finishes customs clearance procedure for export of goods they can collect the fee before issuing bill of lading.

Upon the destination airport, the carrier can collect the ATF from the buyer as they issue the delivery order.

In some instances, the freight forwarder may collect the fee on your behalf when they include it in their freight invoices.

This is common with door-to-door delivery services.

What is the Relationship between Air Terminal Fees and Incoterms?

incoterms 2020

Incoterms 2020

Incoterms are globally recognized rules that clearly stipulate the roles of buyer and seller in the shipping of goods.

They outline who is supposed to pay for insurance, documentation, shipping costs, manage shipment and logistics.

Understanding the incoterms in your airfreight shipping contract will determine who pays for the airline terminal fees and at what point.

Common Incoterms include: EX-Works (EXW), Carriage Insurance Paid (CIP), Carriage To Paid (CTP), Delivery Duty Paid (DDP), Free On Board (FOB).

EXW requires the buyer to pay for the ATF for the departure and destination airport.

The other incoterms require seller to pay at departure and seller at destination airport respectively.

What other Fees are Associated with International Shipping Cost?

International shipping comes with a lot of costs besides the airline terminal fees.

Such costs include:

Freight Associated Charge

This is the cost of shipping cargo by airfreight.

This is arrived at by calculating the volume and weight of the goods

Carrier Related Fees

Are the small surcharges added to cover for the fluctuating fuel prices and spaces shortage due peak season.

They include: BAF, CAF, PSS and lesser-known carrier-related fees.

  • Bunker Adjustment Factor (BAF) covers for fuel cost and is charged by the airline to cushion them against fluctuating fuel prices
  • Currency Adjustment Factor (CAF) this takes care of the exchange rates risks of one currency to another. It is usually a percentage of the air freight cost.
  • Peak Season Surcharge (PSS) covers the increase is shipping demand to cater for operational costs which also go up.

Zone Specific Fees

Different airports charge different rates depending on their ranking.

For instance; London Heathrow has higher charges than New York airport.

Delay Fees

This is applicable beyond the allowed free time.

They are incurred due to customs holds, congestion at the airports and warehouses, etc.

They are in form of demurrages, detention, warehouse fees, etc.

Taxes and Duties

Taxes and duties are normally charged on the goods being shipped depending on their value and HS category.

Taxes such as value added tax are charged at a percentage of the total customs value declared.

Duties are a fixed percentage on goods value for different classes.

Customs Fees

This fee is charged for the verification of documents of goods shipped before they can be cleared for entry.

It is normally a small fee compared to other costs and may go up when goods are taken for inspection.

Destination Charges

These are applicable at the destination airport hence are also referred to as local fees.

They may include; security fees, cargo data entry fee, handover fee, etc.

Documentation Fees

This caters for paperwork needed for your cargo to be shipped from one airport top the next.

Bill of lading is one such document which must be paid for before it is issued.

Cargo Insurance

This is need to cover for unforeseen risks involved in shipping of merchandise and handling.

While the airline legally covers for shipping insurance, it is never enough, thus you are required to insure your cargo separately.

Additional Fees

This caters for unexpected costs that may arise as well as optional services such as packing and many others.

Can you Prepay Airline Terminal Fees?

Yes.

The charges for airline terminal fees can be accessed on their website by shippers and buyers at their convenience.

Once they have their cargo data, they can use the calculator to determine the ATF and pay in advance.

Some countries have a prepaid policy at the departure airport thus forcing prepayment for the destination airport as well.

What is the Impact of Airline Terminal Fee on Airfreight Costs?

Introduction of airline terminal fee besides the normal airfreight costs increases the overall shipping costs of goods by airline.

Secondly, airfreight cost is generally high thus adding extra costs such as airline terminal fee has made it rarely used shipping option.

What is Airline Terminal Fee Calculator?

The airline terminal fee calculator is the process of generating the cost chargeable for an airline to use an airport.

In order to calculate the airline terminal fees certain factors must be considered such as:

  • Type of aircraft
  • Time of operations; landing and take-off (day or night)
  • Freight size and weight
  • Full load capacity
  • Parking time length
  • Terminal facilities to use (cargo or passenger),
  • Duties & taxes
  • Noise category, etc.
  • Currency

All these data must be considered in order to arrive at an ATF.

Is Airline Terminal Fee the same for all Airports?

No.

The airline terminal fee is not the same for all airports.

The charges vary from one airport to another even when they are located within the same country.

Different airports charge differently based on various cost variables such as warehousing, electricity, security, and value of goods being exported.

The airports then transfer the expenses to the customers so as to recover for the costs of handling goods.

Terminal fee can be charged based terms of delivery signed by the seller and buyer.

The fee is either payable at the origin or destination of goods.

Can you deduct Airline Terminal Fee on Shipping Cost?

Paying for air terminal fee

Paying for air terminal fee

That will depend on the nature of the invoice provided by the airline.

For some invoices, the airline terminal fee is included in the overall shipping cost making it hard to separate the cost.

However, some airlines, do charge the terminal fee on its own thus one can deduct it from shipping cost.

I hope this guide has covered everything you need to know about airline terminal fee.

However, in case you have any question about air terminal fee or air freight from China, BanSar team is here to help – contact us now.

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