A Freight Documentation Fee is a typical charge in the world of shipping.
It used to be just a handling charge before steamship lines increased their documentation fee, leading it to become a real cost per-shipment on top of ocean freight rates per container. When dealing with a freight forwarder, this fee is associated with processing paperwork, copying documents, and preparing an air ocean Bill of Lading. It helps freight forwarders cover the cost of processing and handling shipments. Since origin and destination service requirements are different, you will be charged a freight documentation fee in the origin with the freight as origin documentation, and at destination as destination documentation.
Due to the fact that the shipping industry has become a very competitive market among ocean carriers, forwarders, and importers and exporters, freight forwarders needed to cover their labor, building, and stationary costs to provide required customer service to customers.
When customers complain about a freight documentation fee, as they want to receive an all-in-one number for ocean freight, I always try to explain the necessity of the fee.
Currently, a freight documentation fee covers the cost that freight forwarders must pay to carriers – between $50 – $100 per Bill of Lading. This charge increases depending on each steamship line, and how you would like to handle the booking stage and Bill of Lading stage with ocean carriers. For example, if you make a manual booking transaction through emails or calls instead of using an online platform, such as the carrier’s website or 3rd-party EDI connections, you will pay higher documentation fees up to $100 per B/L.
Besides booking, during the stage of submitting Bill of Lading instructions to carriers, they even force customers to do everything through automated platforms to cut their labor costs. In my opinion, it is very reasonable for carriers to force forwarders and direct carrier customers to use online platforms to cut carriers’ labor costs, as they invest in technology to improve their website capability to provide more online services.
Customers should compare freight costs as apples-to-apples per container, since documentation fees are per Bill of Lading, while Ocean Freight charges are per container. If you ship five containers, you pay ocean freight charges per container, while only paying a one-time freight documentation fee per Bill of Lading.
Comparing one freight forwarder’s documentation fee with another forwarder’s documentation fee is unfair to freight forwarders, as each one may have different cost calculations in their companies.
You should always choose a freight forwarder based on level of service quality. If you are looking at a $50 – $100 ocean freight rate difference, or freight documentation fee difference between forwarders and carriers, remember that if any issue emerges as a result of bad customer service, your $100 cost savings may cost you 10-20 times more on your final invoice.
If a freight forwarder doesn’t charge you a documentation fee, then please question that forwarder’s customer service and reliability in their service, as their competitors who are charging documentation fees may be hiring higher-quality staff, or well-educated people for their organization to provide you more quality customer service. On the other hand, you value lower costs, and in the big picture, a small charge of a freight documentation fee between $50 – $100 won’t affect overall costs too much.