Published : April 25, 2024, Updated : April 25, 2024

Understanding Wharfage: Meaning, Charges, and Calculation

Understanding Wharfage: Meaning, Charges, and Calculation

Did you know that over 90% of the world’s trade is transported by sea? With maritime trade playing such a pivotal role in global commerce, it’s essential to understand the various fees and charges associated with port operations. One such fee is wharfage, which is levied on goods handled at ports. In this blog post, we’ll delve into the meaning of wharfage, explore the charges involved, and unravel the intricacies of calculating wharfages.

Whether you’re a shipper, importer, or logistics enthusiast, understanding wharfage is crucial for navigating the complexities of international trade and port operations. Let’s dive in!

Understanding Wharfage in Detail

Wharfage charges are the fees you pay to a port authority for using their wharf to dock a ship or load and unload cargo onto or from a vessel. But here’s the catch: it doesn’t cover other services like inspecting, sorting, weighing, or handling cargo. In some countries, it’s also known as Cargo Dues or CD. Essentially, it’s the cost of using a wharf.

According to the Federal Maritime Commission (FMC) regulations, wharfage is a fee slapped on cargo or vessels for passing over, onto, or under wharves, or when berthed at a wharf or moored in a slip nearby.

So, how is wharfage calculated? It’s based on revenue tons, which is whichever is higher between the weight or volume of the cargo.

Picture a wharf as the parking spot for ships in a port. Wharfage charges are just a portion of the fees collected by the port authorities from the ship carriers. These carriers then pass on the charge to shippers, either as part of the base freight rate or as Terminal Handling Charges (THC).

These fees might be footed by exporters at the departure port or by importers at the final destination port, depending on the payment terms. Usually, port authorities set this duty for the entire year, and any ship docking at the port is liable for wharfage charges.

Also Read: What is Cargo Insurance?a

Who Pays Wharfage Charges?

Wharfage charges can be covered by either the exporter or the importer, and this depends on the agreed payment terms. These terms, known as Incoterms (International Commercial Terms), are a standardized set of rules established by the International Chamber of Commerce (ICC) and are globally recognized.

How are Wharfages Calculated?

Wharfage charges are determined when cargo arrives at the port’s wharf. These fees are calculated based on a unit called the revenue ton, which is determined by either the weight (measured in metric tonnes) or the volume (measured in cubic meters) of the cargo, whichever is greater. The calculation method can vary depending on the type of cargo being unloaded from the vessel.

While most port authorities base charges on weight or volume, they may also assess fees per container unit. However, there’s usually a standard fee set by port authorities to maintain competitiveness and avoid deterring customers with excessively high charges and taxes.

D/B Wharfage and Demurrage

A

D/B Wharfage and Port Charges

A

D/B Wharfage and Arrastre?

a

D/B Wharfage and Dockage

a

Wharfage Charges at Wharves, Quays, and Berths

Yes, wharfage charges are applicable regardless of whether the port has a wharf, quay, or berth. A wharf is a constructed platform alongside the water’s edge where ships dock to load and unload cargo. A quay is a paved area near the water’s edge used for similar purposes. A berth is a designated space for mooring and securing vessels during loading and unloading. Wharfage charges cover the use of these facilities for cargo handling activities. Whether ships are tied up at a wharf, quay, or berth, the charges apply uniformly to facilitate the movement of goods in and out of the port.

Conclusion

Understanding wharfage, its charges, and calculation methods is essential for anyone involved in maritime trade. Wharfage, a fee for using port facilities, impacts both exporters and importers, depending on agreed payment terms. Calculated based on cargo weight or volume, it ensures fair compensation for port services. While demurrage penalizes vessel delays, port charges cover various facilities beyond cargo handling. Regardless of whether ports have wharves, quays, or berths, wharfage charges apply uniformly. Navigating these intricacies optimally streamlines trade operations, benefiting global commerce as a whole.

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