What is the meaning of Wharfage Charges?
Wharfage charges are fees collected by the port authorities to use their wharf to moor a vessel or to load and unload cargo to or from a vessel. However, it does not include services like inspecting, sorting, weighing, loading and unloading, stevedoring charges, etc. It is also called Cargo Dues or CD in many countries. In simple terms, it is the fee charged for using a wharf.
For a more textbook definition, according to the FMC regulations, "Wharfage means a charge assessed against the cargo or vessel on all cargo passing or conveyed over, onto, or under wharves or between vessels and, when berthed at the wharf or moored in slip adjacent to the wharf."
Wharfage is calculated based on the revenue tons that are to be loaded or unloaded at a given port. A revenue tonne is the greater measure between mass or volume.
A wharf is the area in a port where a vessel is moored for loading and unloading. Wharfage charges are basically a subset of port duties collected by the port authorities from the vessel carriers.
The vessel carriers in turn charge shippers the same under the base freight rate or under the fee section called Terminal Handling Charges or THC. These fees could be payable by the exporters at the port of origin and/or the importers at the final port destination, depending on the payment terms. The port authorities usually fix this duty for the year, and any vessel passing through the port is subject to the wharfage charge.
Who pays Wharfage Charges?
Wharfage charges are payable by either the exporter or the importer, depending on the payment terms. These payment terms are called Incoterms, which is short for International Commercial Terms. They are a globally accepted set of terms published by the International Chamber of Commerce (ICC).
Who pays for THC (which includes Wharfage)?
As indicated in the table above, the buyer or importer pays Wharfage at the origin port only for EXW and FCA Incoterms. For all other Incoterms, the seller or exporter pays Wharfage at the origin port. At the destination port, the buyer or importer pays Wharfage for EXW, FCA, FAS, FOB, CRF and CIF Incoterms. For all other Incoterms, the seller or exporter pays Wharfage.
Also Read: Vessel-Operating Common Carriers (VOCCs)| Meaning, Advantage & Difference with NVOCC
How are Wharfages calculated?
Wharfage charges are calculated upon the arrival of the cargo at the port of the wharf. The fees are incurred in relation to a revenue ton which is a unit derived by the weight (calculated in metric tonnes) or volume (calculated in cubic meters) of the cargo, and depending on which one is greater, the charges are set.
It usually depends on the type of cargo in the vessel arriving at the said port. Although most port authorities charge either based on metric tonnes or volume, they can also set the charge based on per unit of container. It wavers with respect to the type of the cargo; however, there is usually a standard port charge that port authorities typically do not exceed in order to avoid losing customers due to the high fees and port taxes.
What is the difference between Wharfage and Demurrage?
Wharfage is always charged for cargo. Demurrage charges are levied when a vessel / container is left at the port for more than a designated period of laytime. It ensures that the vessel does not stay in the dock for a long time. It is more like a penalty for exceeding the agreed time to load and unload on a port.
Wharfage is calculated upon the weight /volume of the goods, unlike demurrage, which is calculated per container and time taken and varies from port to port.
Demurrage charges differ depending on the dock, whereas wharfage charges are somewhat along the same prices around the globe.
Demurrage is usually the cost paid by the importer for delayed pick up of the goods from the port. However, the exporter can sometimes incur demurrage when their cargo remains in the harbor and fails to be loaded onto the vessel on time. Demurrage is basically a penalty for the overtime lodging of ships.
What is the difference between Wharfage and Port charges?
Port charges include anchoring and sanitation facilities, anchorage and river dues, dock fees, customs duties etc. However, wharfage is solely the tax levied on the shipped goods and is mainly related to the loading and unloading of the cargo. A port charge is a fixed charge against the vessel at the port. Storage charges, early arrival charges and terminal handling charges are all included in these port charges.
What is the difference between Wharfage and Arrastre?
Wharfage is the fee the port charges for the privilege of the cargo movement through that particular port.
Arrastre charge is levied for handling, receiving, and custody of the cargo in that particular port.
The former relates to charges for space and the latter relates to charges for labor and management.
What is the difference between Wharfage and Dockage?
To understand the difference between Wharfage and Dockage, one must first understand the difference between a wharf and a dock. A dock is a body of water where a vessel is docked. A wharf is a man-made construction on or near the dock where land activities can take place. While Wharfage is the fee for using the wharf, Dockage is the fee for using the dock. In most cases, Wharfage charges include Dockage charges as well.
Is Wharfage charged at quays and berths too?
A wharf is a raised and leveled man-made structure that is built beside the edge of the water body to load and unload goods. It is an extended platform where ships can be tied, and cargo can be extracted.
A quay is an artificial part of the land near the sea where cargo can be loaded, unloaded, and stored. It is a concrete land near the water body.
A berth is a place assigned for mooring and tying up boats and vessels to the land reserved for shipping. It is a structure typically made of stone near the coast where boats load and unload their cargo.
Whether the port has a wharf, quay, or berth, Wharfage charges will apply.
