This guide explores all the vital aspects you need to know about container freight station fee.
So, before you seek for services in a CFS facility, read this guide.
Let’s dive right in.
- What is CFS Fee?
- What are CFS Fees Used For?
- Which Activities Attract CFS Fees?
- How is CFS Fee Calculated?
- Which factors Determine the CFS Fee?
- How Does CFS Fee Affect International Shipping?
- Who Pays CFS Fee?
- Can you Negotiate CFS Fees?
- Can you Delay Paying CFS Fees?
- How can CFS Fees Impact You?
- Do CFS Operators Charge CFS Fees on Empty Containers?
- Is CFS Fee for LCL Shipments and FCL Shipments the Same?
- Do You Pay CFS Fees During the ‘Free Period’?
- What are the Payment Options for CFS Fee?
- Why do you Need to pay Attention to CFS Fees?
- Why do CFS Facilities Charge Higher CFS Fees for Reefer and Hazardous cargo?
- What Additional Charges do CFS Facilities Charged on Top of the CF Fee?
- Is CFS Fee the same for all Types of Containers?
- Can Cargo be Released from CFS Before Payment of the CFS Fee?
- Can you Pay CFS Fees online?
- What is a CTF Fee?
- Is CTF Fee Charged as Part of the CFS Fee?
What is CFS Fee?
A Container Freight Station fee refers to an amount of money charged for loading, unloading as well as packaging services at a warehouse.
This charge mostly applies to LCL shipments.
Once your LCL shipment arrives at the port, it is transported to a container freight station where unloading takes place.
Each cargo from different importers is separated from the rest and loaded into a truck.
Thereafter, the truck transports the goods to the warehouse.
The fee charged for this service will vary depending on the number of goods or the weight of goods. The more goods you have the higher the CFS fee.
However, sometimes the fee remains similar for specific categories of goods.
What are CFS Fees Used For?
CFS fees are applied to cater to the services offered in a container freight station. Such services are not limited to;
- Consolidation of goods in the port of origin – This involves combining different shipments from different importers to one container.
- Deconsolidation of goods in the port of destination –Disintegrating shipments from different importers.
- Smooth transportation of your container.
- Storage of the goods.
Which Activities Attract CFS Fees?
CFS fees are one important aspect that any importer should be keen on following up on as it might result in additional costs.
Generally, the CFS fee is charged to cater to the preparation activities conducted in the freight station for your goods before or after being shipped to the destination port.
Some of the activities that will attract CFS fee are not limited to;
- Shipping container loading and unloading
- Storage of goods
- Daily Floor space rent for containers
- Container inspection. It includes scanning the container to confirm that the cargo is the declared one.
- Handling of your goods when passing through customs.
- Movement of your goods from the container freight station.
- In case a container is damaged your cargo will need to be shifted to another container. This will in turn attract CFS fees.
- Any amendment on documents will attract a CFS fee.
- Before the containers are loaded on a vessel, they are weighed to confirm that they meet the required weight. This attracts a CFS fee.
- Sweeping the container.
- Sometimes, vessels are used to load and unload containers, and when such vessels are used CFS fee applies.
- Repairing the container.
Process of shipping
How is CFS Fee Calculated?
The CFS charges are determined by several factors one of the main being the quantity of the cargo.
CFS fee varies from one country or region to the other and therefore you shouldn’t expect a standard amount to be charged.
Normally, CFS charges will be calculated based on the type of container used in transportation.
For instance, containers that are more than 40ft, the fees will be 200% of the 20ft container fees.
For the same size of the container, the ground charges will be 300% of the 20ft container fees.
Freight rate charge
Which factors Determine the CFS Fee?
The fees charged for Container freight stations will vary depending on several factors such as;
- Quantity of goods being shipped. The more the cargo the higher the CFS fee.
- Seasons – Shipping during high seasons will shoot up CFS fees as the services are in higher demand.
November and December are considered high seasons.
This is the period in which most businesses restock in preparation for the holiday seasons.
You should also take note of Chinese holidays which normally happen around January and February.
The weeks before this occasion are considered high seasons and therefore you are bound to pay a higher CFS fee owing to higher demands.
- Government regulations – CFS fees vary from one country to the other owing to different government regulations enacted.
- The type of shipping container used in the transportation process. Some products such as perishables will require special containers and this, in turn, raises the CFS fee.
- Type of goods being shipped – Some goods are perishable and will require special handling.
As such, the use of containers with refrigerators also applies and all this will shoot the CFS fee higher.
How Does CFS Fee Affect International Shipping?
When shipping using LCL, you need to be very knowledgeable when it comes to understanding CFS charges.
Failure to this might result in you incurring extra charges.
CFS fee caters to the services offered once your goods are loaded into the ship.
Sometimes, the customs authorities might choose to collaborate with the customs officials in the destination country.
The main reason being to charge the same fee for both countries.
However, it is rare for this to happen.
As a business owner or importer, it’s important to take into account what CFS entails before commencing your shipping procedure.
That said, CFS can have some effects on your international shipping in the following ways;
- Causing delays – Failure to discuss the costs before shipping begins might result in delays.
It’s always advisable to ensure that all requirements and agreements are met before commencing your shipping process.
- More costs incurred – This happens more so when dealing with logistics.
Working with a qualified logistics company will save you the agony of incurring extra costs.
- Failing to reach an agreement on desirable prices for both the exporter/importer and the customs officials leads to poor relationships.
Working with the appropriate logistics company will not only ease the negotiation but also allow you to continue with your daily business activities.
Logistics Company will carry out all the processes on your behalf.
Who Pays CFS Fee?
The importer or exporter is responsible for settling fee payments for the container freight station.
Can you Negotiate CFS Fees?
Yes, you can negotiate the CFS fees.
However, you need to do this on time to avoid any delays.
Negotiating process can be quite challenging and therefore most importers chose to work with freight forwarders.
Freight forwarders come in very handy more so if you are not well oriented with matters regarding customs clearance.
In addition to that, it relieves the stress associated with it and you are left to continue with your daily routines without any worries.
Can you Delay Paying CFS Fees?
Yes, payment of CFS fees can be delayed owing to several reasons.
Nevertheless, you need to keep in mind that this might attract additional charges otherwise referred to as demurrage.
Normally, the officials have a specified period to allow importers to complete all the necessary customs clearance processes.
Once this time lapses, the importer will be required to pay demurrage to the concerned officials.
How can CFS Fees Impact You?
CFS fees can hugely cause an impact not only on you but also on your business.
Think of it this way, a misunderstanding emerges regarding the CFS fees.
In the middle of all these, delays follow and as a result, additional costs are incurred.
As if that’s not enough, such a situation will negatively impact your business in a manner that you won’t be able to make decisions or run your business effectively.
Not forgetting that this might also diminish your relationships with customs officials.
To avoid all this, you can choose to work with a freight forwarder or ensure that you are very knowledgeable on the customs operations before commencing your shipping process.
What is the Difference Between CFS Fee and VGM Fee?
Verified Gross Mass(VGM) fee not only refers to the weight of the goods and bracing but also the weight of the empty containers.
This includes all the equipment used to position the cargo in place.
On the other hand, the Container Freight Station fee is an amount of money charged on service provision at the warehouse as goods undergo clearance, consolidation, and deconsolidation.
Verified gross mass
Do CFS Operators Charge CFS Fees on Empty Containers?
Yes, they do. CFS fee is imposed on empty containers too to cater for services such as the ground charges.
Is CFS Fee for LCL Shipments and FCL Shipments the Same?
LCL vs FCL
FCL shipment doesn’t need a CFS fee. Container freight station only serves LCL shipments and therefore the CFS fee for FCL won’t be applicable.
Generally, it’s always more expensive to ship via LCL as compared to FCL owing to the consolidation and deconsolidation tasks.
Do You Pay CFS Fees During the ‘Free Period’?
Yes, once you pay for CFS fee it covers the “free period”. After the expiry of the free period, you will be expected to pay demurrage.
This charge is meant to cater to the storage and re-marshaling.
What are the Payment Options for CFS Fee?
CFS fees can be paid through the various payment options used in freight payment. Some of these payment options are not limited to;
- Letters of credit – Letters of credit are considered one of the safest payment methods you could use during your shipping processes.
The importer’s and exporter’s banks are the ones taking care of payments and therefore both parties are well secured.
- Bill of exchange– A bill of exchange is used when doing cash against goods type of import.
The importer’s bank is responsible for making payments to the exporter.
- Cash in advance – As simple as this payment method might be, it poses risks to both the seller and buyer.
Therefore, using cash in advance would be ideal when dealing with a person that you know well.
- Cash against documents –In this payment option, the importer’s bank has all the control. Meaning, it can release shipment once the payment from the importer is received.
Why do you Need to pay Attention to CFS Fees?
Whether you are exporting or importing goods via LCL shipping, you need to be knowledgeable on what the CFS fee entails.
CFS fee is not a standard amount and thus you can either end up paying the required amount or more than you should.
Before paying the CFS fee, ensure that you understand what the fee covers and the repercussions that follow if you fail or delay paying it.
Delaying the payment will result in delays in your cargo.
This might in turn lead to additional charges once the “free time” expires.
Ensure that both parties involved have a clear understanding of the agreement to avoid any misunderstandings later.
Such are the causes of bad relationships of importers and exporters with the customs officials.
Rarely, the customs officials in the country of origin might choose to collaborate with custom officials in the destination country.
Upon doing this, they agree to charge an all-inclusive fee covering both countries.
Being informed on such practices is important in ensuring that you have adequate knowledge for the smooth running and decision-making of your business operations.
Why do CFS Facilities Charge Higher CFS Fees for Reefer and Hazardous cargo?
Reefer and hazardous cargo require special treatment as opposed to normal types of goods.
Such cargo will need refrigeration containers and dangerous goods containers respectively to prevent them from going bad.
In addition to that, proper handling of hazardous materials is important as they might cause harm.
Owing to this, the amount of CFS charged is normally higher on reefer and hazardous cargo.
What Additional Charges do CFS Facilities Charged on Top of the CF Fee?
Apart from the CFS fee, CFS facilities impose the following additional charges that you should be aware of;
- Container repairs charges
- Port entry
- Amendments/ adjustments in documents
- Lashing, chocking, and dunnage to secure the cargo
- Transportation into and out of the CFS port.
- Moving cargo from damaged containers to better containers(reworking).
- Sweeping of the container
- Labour for consolidating and deconsolidating the goods.
- Reefer handling
- Shifting cargo with CFS
- Authentication of the weight of the packed container before being loaded into the ship.
Is CFS Fee the same for all Types of Containers?
No, it’s not.
CFS fee varies from one container to the other depending on the size of the container.
The following are the size of different containers; 10-foot, 20-foot, 45-foot, and 40-foot.
The commonly used ones are 20 and 40-foot containers.
Keep in mind that the fee charge will also vary from one country to the other and thus you need to confirm with your local authorities.
Can Cargo be Released from CFS Before Payment of the CFS Fee?
No, it cannot.
You need to clear your CFS fee before your cargo is released from the container freight station.
Failure to do so will not only result in delays but also a poor relationship with customs officials which might affect your future shipment.
Can you Pay CFS Fees online?
Yes. CFS fees can be paid online depending on the agreement you have with the customs officials.
What is a CTF Fee?
CTF fee otherwise referred to as Clean Truck Fee was initially started in Angeles and long beach ports to curb pollution of air.
It regulated the entrance of trucks that caused pollution in the port and allow the entrance of “clean trucks” which reduced pollution in L.A port.
To achieve this, new trucks had to be bought, and therefore to recover the money spent on the new trucks a clean truck fee was introduced.
Is CTF Fee Charged as Part of the CFS Fee?
No, it is not.
CTF fee is charged separately from the CFS fee.
CTF fee is normally charged after all cargo has been claimed.
How Can you Reduce CFS Fees?
There are several ways you can implement to reduce the costs associated with CFS fees.
Some f these ways are not limited to;
- Working with a freight forwarder –Instead of going through all the tiresome procedures which might not only end up being costly but also exhausting.
Working with a freight forwarder is an ideal option.
Freight forwarders already have the know-how on CFS procedures not forgetting that they are well connected.
As such, they can easily take care of your shipping as you continue with your daily routines without worries.
- Be well informed about CFS fees before indulging in them.
Lack of knowledge on how CFS fees work might result in you incurring more costs than usual.
- Don’t classify your shipment as urgent. Urgent shipment tends to attract more charges as opposed to the others.
Plan early to avoid rush hours which might highly shoot your costs up.
- Ship your cargo during low seasons. Before you begin your shipping, do proper research and analyze the best time to ship your cargo.
During the year, there are low and high seasons.
Low seasons have decreased activities in the container freight station and therefore the fees are normally lower than usual.
This would be the appropriate time for you to ship your cargo.
- Shipping hazardous and perishable items increase the CFS fees.
This is because such cargo will need special containers such as refrigeration containers as well as careful handling.
If you are looking forward to starting a business you need to consider such factors and gauge if it will be reasonable for you in the long run.
I am not implying that dealing with such goods is a bad idea but you need to make wise decisions before starting to avoid quitting later after things get hard.
However, dealing with such cargo might also turn to be a lucrative business.
In short, you should consider everything in this guide when choosing a container freight station.
They will help you determine the container freight station fee.
For any questions or inquiries, contact BanSar team now.