Fees and surcharges are held as the hidden pain of the maritime industry. As logistics operators plan for the future, they need to know how much they will be charged for transportation and what share of their total cost it will be. Thus, having an industry with a number of additional fees can be dangerous for any form of planning. 

But just how prominent are these fees, really? And, most crucially, how much should operators worry about them in the first place?

In this essay, we attempt to understand just how much surcharges and fees impact the maritime industry. That is, to uncover what share of the total price to transport a container is made up from additional charges. Our analysis suggests that surcharges are only a small fraction of prices that vary by container—good news for operators that can now treat news of increased surcharges with cold facts. In fact, we found that, depending on the size of the container, fees account anywhere between 2.86 and 3.33% of the total shipping cost—a number we will soon elaborate on.

To start we should note that, given the vastness of the ocean industry—and the lack of an aggregate dataset on shipping costs—we focused on a single route for this analysis: the transpacific line from Shanghai, China, to Lázaro Cárdenas, Mexico. This, in turn, is an expansion of our past analysis on the cost of Asia to Mexico shipping.

For this analysis, we considered 24 lanes from eleven ocean carriers: HMM, EMC, PIL, Yang Ming (YML), CMA CGM, ZIM, COSCO, MSC, OOCL, Maersk, and Wan Hai (WHL)—although, we should note that MSC, despite having a Shanghai to Lázaro Cárdenas route, did not report surcharge rates. For each of them, we considered seven fees which we outline below:

• Automated Manifest System Fee (AMS): A fee charged per shipment by customs authorities. This fee is meant to cover the cost of managing manifest data for a specific shipment at port. 

• Verified Gross Mass Fee (VGM): A fee intended to cover the expenses of verifying the gross mass of a shipment before it is loaded into a vessel. This is a fee paid by container being handled.

• Manifest Fee: A fee intended to cover the costs of submitting manifest data to customs authorities.

• Peak Season Surcharge (PSS): This fee is meant to cover additional costs during peak shipping seasons—such as Chinese New Year or the weeks leading to the holiday season. This fee is charged by container and will differ based on container size.

• International Ship and Port Facility Security Code Charge (ISPS): A fee charged by container meant to cover additional security at port—including security assessments and the development of security plans in case of an emergency. The value of this fee will change based on container size.

• Value Protect Plus: More than a fee, this is a form of insurance offered by Maersk in case of any accidents on board such as a fire or potential cargo theft. This fee is charged by container.

• Low Sulphur Surcharge (LSS): This is a fee per container being carried in a vessel using low sulphur fuels. It is meant to offset and discourage sulfur emissions. Much like the PSS or ISPS, this fee varies by the size of the container.

Not all charges listed were required by the eleven companies considered. In fact, we found that only three charges were shared across companies: VGM, Manifest Fee, and PSS—again, considering we found no surcharge or fee data for MSC. Value Protect Plus was a Maersk specific fee (which, we should add, serves more like an optional insurance). Similarly, LSS fees were only experienced by Wan Hai. In the table below, we share which carriers are charging which fees for the route considered.

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Now that we’ve covered the scope of this analysis we can share our insights. First, and foremost, we were able to find the average cost for all seven fees listed above across all 24 routes considered. As the figure below shows. Fees and surcharges range from 35 USD per container to 2 USD per container. LSS and AMS were the most expensive with a cost per container of 35 and 33.6 USD respectively. The cheapest, in contrast, were the VGM at 2 USD per container and the Manifest Fee at 6.9 USD.

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As we mentioned while defining each fee, some of them will differ based on the size of a container. More specifically, it is three fees that exhibit this pattern: LSS, ISPS, and PSS. For LSS and PSS fees, we found a standard pattern: 20 ft containers are cheaper than their 40ft equivalents. For a 20ft container, LSS fees are 20 USD while PSS are around 6.89 USD. Meanwhile, for a 40ft container, these fees grow to 40 USD and 13.79 USD respectively—or rather, about double the price for a container double in volume.

Yet our analysis also showed that ISPS failed to follow that pattern. In the figure below, we focused on ISPS fees per container size. As the figure shows, despite the fact that 20ft containers hold less cargo than 40ft containers, they actually have higher ISPS fees. While a 40ft container has an ISPS fee of 13 USD, a 20ft one has a fee of 13.89 USD—yet another reason why, when shipping large quantities, it might be cheaper to consider 40ft containers which carry double the cargo but only cost about 10% more.

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Since all surcharges are eventually added per container, we wanted to find the average cost of all additional fees per container. We did this for all 24 routes considered in this analysis, adding the seven fees by container type. As the figure below shows, the total cost can range between 42.9 USD for a 40ft non-operating refrigerated container and 56 USD for a 40ft container. We found 20ft containers were cheaper than 40ft containers but by a very small proportion. While 40ft containers hold twice the volume of a 20ft container, they only accrue 7.6% more fees—a key finding for operators.

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We also gathered the total shipping cost for all journeys considered in this study. This allowed us to graph the share of the cost of a trip represented by surcharges and fees. Our results are displayed in the figure below which shows that fees can account for up to 3.33% of shipping costs. Interestingly, we found that 40ft containers had the lowest share of their total cost come from fees—even lower than their 20ft counterparts.

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Finally, we broke down the above analysis by carrier in the figure below. As the series of br graphs show, there is considerable variation in the proportion of shipping costs that comes from fees and surcharges. Carriers like Cosco are at the lower end of the scale, with surcharges equating 0.55-1.16% of total cost. Meanwhile, for HMM, surcharges account for anywhere between 3.18 and 4.31% of total costs.

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While limited in scope, this initial analysis does suggest interesting patterns that logistics operators should take into consideration. Above all, it helps disprove the idea that surcharges are in large part responsible for fluctuations in prices as they often account for a small proportion in shipping prices—though this could well change in case of unforeseen disruptions like droughts in the Panama Canal or Houthi attacks on the Red Sea. 

In Desteia, we believe companies should leverage information like the above to better understand their own supply chains and costs. If you are interested in how data could help transform our operations, make sure to schedule a call with one of our experts.