The log · Service & process guides · 20 May 2026 · By Sherif Awad, Founder, GeoMarineHub
Freight Surcharges Explained: BAF, CAF, THC, LSS & GRI
The base ocean rate is only half the bill. Decode the alphabet soup of surcharges — BAF, CAF, THC, LSS, GRI and more — so your freight quotes hold no surprises.
Freight Surcharges Explained: BAF, CAF, THC, LSS & GRI
The base ocean rate is only half the bill. Decode thealphabet soup of surcharges — BAF, CAF, THC, LSS, GRI andmore — so your freight quotes hold no surprises.
Geomarine Freight Team
You ask for an ocean freight rate, get a low number, and then the quote sprouts a dozen acronyms. Those are surcharges — and they are a legitimate, if confusing, part of nearly every freight bill. Here is what the common ones mean.
Fuel & Currency
—BAF (Bunker Adjustment Factor) — adjusts for the price of marine fuel; rises and falls with oil.
—LSS (Low Sulphur Surcharge) — covers the cost of cleaner, IMO-2020-compliant low-sulphur fuel.
—CAF (Currency Adjustment Factor) — offsets exchange-rate swings, often a percentage of the base.
Terminal & Handling
—THC (Terminal Handling Charge) — the port/terminal's cost to move your container; billed at both origin and destination.
—CFS (Container Freight Station) — consolidation/deconsolidation handling, mainly for LCL.
—Documentation / B/L fee — issuing the bill of lading and paperwork.
Market & Seasonal
—GRI (General Rate Increase) — a carrier-led rate rise, common when demand is high.
—PSS (Peak Season Surcharge) — applied during peak periods (e.g. pre-holiday rush).
—Congestion / war-risk / canal surcharges — situational, route-specific add-ons.
Why So Many?
Carriers keep the base rate competitive and recover volatile or external costs through surcharges that can be adjusted independently. It is not (usually) a trick — but it does mean the headline rate is meaningless on its own. Always compare quotes on the all-in total, not the base freight.
Reading a Quote Like a Pro
Ask for an itemised breakdown, confirm which charges are at origin vs destination, check the validity date (rates expire), and confirm the currency. On a transparent marketplace, forwarders quote each line separately so you can see exactly what you are paying for.
Sources & Further Reading
—Carrier tariff definitions (BAF/CAF/THC/GRI schedules).
—IMO 2020 low-sulphur fuel regulation (background to LSS).
—Freight-index and market commentary on GRIs and peak surcharges.
Related freight guides
—China to Middle East Shipping Guide: Lanes, Transit Times & Tips
—Cargo Packing & Palletisation: Best Practices for Export Shipments
—Letter of Credit (LC) Basics: A Trade-Finance Guide for Importers and Exporters
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