The base ocean freight rate you're quoted is rarely the number you actually pay. Carriers layer on a series of surcharges that can add 20-40% or more to the final invoice — and most new shippers don't find out what they mean until the bill arrives.
BAF: Bunker Adjustment Factor
BAF (sometimes called FAF or fuel surcharge) passes fluctuations in fuel/bunker oil costs on to the shipper. It's adjusted periodically — sometimes monthly — based on prevailing fuel prices, so a quote from three months ago may not reflect today's BAF.
CAF: Currency Adjustment Factor
Ocean carriers often price in a mix of currencies for fuel, port fees, and crew costs. CAF compensates for exchange rate fluctuations between those currencies and the US dollar, and can shift the effective rate even when the base freight cost hasn't changed.
THC: Terminal Handling Charge
THC covers the cost of moving a container between the vessel and the terminal gate — loading, unloading, and yard handling. It's charged at both origin and destination, so you'll typically see it listed twice on a full invoice (OTHC and DTHC).
Other Common Line Items
- PSS (Peak Season Surcharge): added during high-demand periods, typically Q3-Q4
- GRI (General Rate Increase): a carrier-wide rate hike, often announced with 2-4 weeks' notice
- ISPS: a small security-related fee tied to port security compliance
- Documentation fee: covers the carrier's cost of issuing the bill of lading
The base rate wins the quote comparison. The all-in rate wins the actual budget. Always ask for the fully loaded number before comparing carriers.
When comparing ocean freight quotes, always ask for the all-in rate rather than the base rate alone — two carriers with similar base rates can end up meaningfully different once surcharges are applied.