One consequence of the recent rise in e-commerce shipping was a subsequent jump in smaller, more specific, less than container load shipments. Last year, businesses of all sizes contributed to a record $2.85 trillion of imports and $1.76 trillion in goods exports. Increased demand for small, consolidated consignments means more shippers will rely on the services of a container freight station, and be charged with CFS fees.
Container freight stations play an important role in importing and exporting. They prevent the port’s container yards from getting overcrowded, and provide a place for small shipments to be separated for inland transport.
But with their services comes many different types of surcharges. If something goes wrong with a shipment, whether it’s within a shipper’s control or not, companies can end up with a mountain of fees added to their freight bill. For that reason, it’s important for consignees and freight forwarders to understand what prompts CFS charges, and what actions can be taken to mitigate them.
In this article, we’ll explain how CFS fees are calculated, and the types of services that tend to bring about these surcharges. We will also offer some suggestions for how to minimize and avoid CFS fees.
What is a Container Freight Station (CFS) in Shipping?
A container freight station (CFS), is a facility where cargo from different importers and exporters is either consolidated into a shipping container at its origin to be shipped, or de-consolidated at its destination.
In shipping, a CFS handles less than container loads (LCL). LCL is an ocean shipping option for companies who do not transport enough cargo at once to fill an entire ocean container. Instead, the cargo gets consolidated with other shipments into one container.
The CFS station comes into play when shipments need to be handled or organized at either end of the shipping journey. It’s where freight is moved through customs clearance procedures, stuffed, containers are sealed and marked, de-stuffed, stacked, and a containers’ internal load plan is prepared.
At its origin point, an LCL shipment is taken to a CFS station to consolidate with other cargo. Once the container is completely filled, it is taken to a container yard and loaded onto an ocean vessel. Once the container arrives at its destination port, it heads to another container freight station where the contents are sorted and sent to their final destination. Container freight stations are typically owned by a shipping company or by the terminal. Often, they are located close to ports of entry such as airports, railway hubs, or ocean ports.
Container freight station services have a cost involved. The facilities charge fees called, incidentally, container freight station fees, for all loading, unloading, packaging, and temporary storage services.
What are CFS Fees Used For?
Before an LCL shipment leaves its port of origin, it must be consolidated with other cargo into a container. Once it arrives at its destination port, the load is then separated from the cargo of other importers before being loaded on a truck and hauled inland. The CFS charges for loading, unloading, separating, and packaging freight.
CFS fees pay for a number of services within a container freight station, which includes:
- Consolidating unique shipments from different importers into one container at their port of origin.
- Separating shipments from different importers at the port of destination.
- Moving cargo in or out of a container freight station.
- Moving empty containers from a container yard to a container freight station.
- Draying loaded containers from a CFS to a container yard.
- Storing goods.
- Storing containers.
- Maintaining records of each shipment’s origin and destination points, exporter, importer, customs agent, and pertinent cargo details.
- Issuing a proof of delivery to the exporter, known as a dock receipt.
- Sorting and stacking containers, both before and after shipment.
CFS fees depend on a shipment’s dimensions, as well as the volume, weight, and the amount of cargo being processed. Charges can also vary based on the services performed at a CFS and the distance that freight has to travel. Shippers can find CFS charges listed on their freight forwarder invoice.
Different CFS Fees
There are specific operations that will almost always result in a CFS fee. Here are a few of the most common ones:
- Stuffing, de-stuffing and delivery. Stuffing and de-stuffing are industry terms for loading goods into, and unloading goods out of a shipping container. De-stuffing fees include the cost to move loaded containers into the container freight station and preparing them for the customs examination.
- Container scanning is a type of customs examination, which is a means to monitor what passes over the border. X-ray scans are the least invasive examination option, but they’ll still incur a fee. Customs authorities may choose to scan a shipment for a number of reasons, such as checking for radiation or pests, or to see if the goods are as declared.
- Cargo handling for customs examinations. At the opposite end of the spectrum, cargo handling is the most invasive and expensive type of examination. As the name implies, cargo handling entails a physical examination in which cargo is completely unloaded, inspected, and repacked. The fee for moving, unloading, and loading a shipment for a customs examination depends on how intensive the examination is and how heavy or unwieldy a shipment is.
- Cargo storage – If a shipment takes up less than an entire container it will have to be stored and separated at a container freight station. Generally, a CFS will provide one week of free storage time for an importer’s items after a container is unloaded and shipments are separated out. Once that time is up, if a shipment hasn’t been transported yet, cargo storage fees start to kick in.
- Per-day ground rent for laden containers. This is the cost to a shipper for using a container freight station, or another physical space, beyond an allotted number of free days after arrival. Ground rent is intended to discourage importers from treating a CFS as a storage space.
- Cleaning and repairs. Once containers are emptied, they have to be swept out and inspected for damage. If a container is found to be damaged, it will either have to be repaired or its contents will have to be moved into a new container. Either way, a CFS station will charge for it.
Businesses can get hit with CFS fees from all angles. A company’s freight forwarder can advise them on which applicable CFS fees might arise during transport.
How are CFS Fees Calculated? What Factors Determine the CFS Fee?
There is not a standardized fee structure for all CFS stations. Instead, they are calculated based on a long list of factors. Fees will vary depending on the quantity of cargo, the time of year (the weeks leading up to the Chinese New Year and the holiday season tend to have higher demand), specific cargo handling instructions, the type of container being used, and government regulations. CFS fees can also differ based on what country or region a company ships in.
Here are a few factors that can impact CFS charges in freight forwarding:
- Port entry and transportation to and from the CFS – CFS stations are generally located close to a port, but containers still need to be moved to and from the container yard. The CFS is usually responsible for this, and it factors into the overall fee.
- Lift on/ lift off (LoLo) – Some container ships come equipped with cranes to load and unload containers. Other times, containers may have to be lifted on or off of a truck.
- Weight verification – Before any container is loaded onto a vessel, it must be weighed to verify that it meets the vessel’s weight requirement.
- Reworking – This is the industry term for moving cargo out of a damaged container and into another empty container.
- Shifting of cargo within CFS – As cargo enters a CFS, it may need to be rearranged within the facility. This may happen, for example, when shipments need to be reconsolidated before they are loaded onto a truck for inbound transportation.
- Container sweeping – Shipping lines will charge a fee to consignees to sweep and clean a container once it has been imported. This is how a carrier offsets costs and ensures a container is ready for the next shipper to use.
- Container repairs – Roughly one in four containers passing through U.S. ports sustains damage due to weather, mechanical issues, or human error. When this happens, the liability for repairs often falls to the container’s users.
- Provision of labor for cargo segregation, unpacking and repacking packages for customs examination, restacking and other activities
- Chocking, lashing and dunnage to secure cargo – These refer to different methods of securing freight inside a container to ensure that it is sea-worthy. Chocking uses wooden blocks at the base of a container to hold items in place. Lashing utilizes ropes, wires, or chains to secure cargo, and is usually used for large or heavy items. Dunnage uses durable padding inside a container to protect its contents.
- Reefer handling, such as plugging and monitoring of reefers – Refrigerated freight uses more energy and requires additional monitoring, and as such, incurs additional CFS fees.
- Amendments in documents – CFS stations handle a myriad of documents, including the manifest, bill of lading, and customs paperwork. It’s not unusual for changes to arise during import or export (for example, if a shipment is selected for additional customs screening). When that happens, the CFS must ensure all documentation is up to date.
- The size or type of container – Charges vary for 20-foot, 40-foot, and 45-foot containers. And if the cargo has additional requirements such as refrigeration, hazardous material handling, or it is over-dimensional, that will incur a fee as well.
Tips to Reduce Container Storage Fees
Work Directly with a Freight Forwarder
Work With a Freight Forwarder – Forwarders understand the intricacies of working with CFS, and should be able to help shippers reduce costs. These logistics specialists can help companies avoid extra fees they might otherwise incur working alone. They also typically have strong carrier relationships which means they can probably offer discounted shipping rates and stable capacity to handle your shipping volume.
Plan in Advance
Dispatching cargo as early as possible comes with many advantages. It gives the trucking company time to plan for your delivery. Subsequently, the less time cargo spends in storage, the lower the associated costs will be. Adding in time buffers whenever possible also reduces the need for urgent shipments, which tend to be handled differently and incur more fees. Finally, shippers who have a firm understanding of their inventory levels will have a better sense of how much space is needed to store cargo.
Use Real Time Tracking
Shippers who collect real-time data on the location and status of containers can identify delays early and respond to them proactively. Instead of finding out about a bottleneck once a container is already late, real-time tracking can help shippers identify and respond to bottlenecks proactively.
Analyze Your Data
Collecting historical data also helps to identify patterns that might contribute to repeated delays. A company may decide to work with a new carrier, or re-route to a less crowded port, or might simply use the data to optimize free days at the destination port.
Avoid Shipping During Peak Season
When possible, shippers ought to transport cargo in off-peak months. Each year between August and December is called peak shipping season, when kids go back-to-school, consumers buy gifts during the holidays, and companies everywhere need to move as much inventory as possible. During those times, CFS stations attempt to accommodate a flood of cargo, and CFS fees rise as a result.
Ask for More Free Days
When all else fails, it can’t hurt to ask for a little extra free time. Normally, this tactic only works for large shippers who have enough container volume arriving at a given time. But there’s no standard threshold for what is considered a large shipper. It varies from one carrier to the next.
Don’t Get Stuck Paying High CFS Fees
Over the past two years, and until just recently, port congestion and overcrowding have been at a near constant across the United States. Consumer demand for goods has been elevated since mid-2020, and it has overwhelmed many ports and their ability to process cargo efficiently.
Under these circumstances, there has been a much greater risk that shippers will experience heightened CFS fees. As more freight is loaded or unloaded, more goods are processed through customs, and warehouse space becomes a premium. As this article shows, there are ways to reduce CFS charges. Carrier911 will work with you to lower your fees as much as possible.
It is equally important to move freight out of a CFS station as quickly and efficiently as possible. Carrier911 has the capability to expedite freight that needs to move inland ASAP. Our 24/7 visibility tools and team of logistics emergency experts can help you meet your customers expectations, no matter how quickly your freight needs to get on the road. Schedule a demo today to see how Carrier911 can expedite any shipment under any circumstance.