Freight 101 Library

Mastering FCL Surcharges and Fee Codes: A Comprehensive Guide

FCL, or Full Container Load, is a crucial component of global shipping. When you book an FCL shipment, you’re reserving an entire container for your goods. This offers more control and security compared to LCL (Less than Container Load) shipping. However, navigating the world of FCL surcharges and fee codes can be tricky. Don’t worry, we’ve got your back! Let’s dive into the complexities of these costs and codes to help you ship like a pro.

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What Are the FCL Fee Codes?

FCL shipping comes with its own set of fee codes. These codes represent various surcharges that can impact your total shipping costs. Understanding these codes is essential for accurate budgeting and avoiding surprise fees. Here’s a breakdown of the most common FCL fee codes:

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GRI (General Rate Increase)

A GRI is applied when carriers adjust their base rates. This usually happens annually or bi-annually to account for market fluctuations and operational costs. GRIs can vary widely between carriers and trade lanes, so it’s important to stay informed about upcoming increases.

LSS (Low Sulphur Surcharge) 

Environmental regulations, like IMO 2020, require ships to use low-sulfur fuel. The LSS fee covers the increased costs associated with using this eco-friendly fuel. As environmental concerns continue to shape the shipping industry, expect to see more surcharges related to sustainability efforts.

LWS (Low Water Surcharge)

When water levels in rivers and canals are low, ships can’t be fully loaded. The LWS surcharge compensates carriers for the reduced cargo capacity during these periods. It is most common on routes that include inland waterways, like the Rhine River in Europe or the Yangtze River in China.

WAR (War Risk Surcharge)

Navigating through war-risk zones increases insurance and security costs for carriers. The WAR surcharge is applied to cover these extra expenses. It can change rapidly based on geopolitical events, so it’s crucial to monitor the situation in your shipping regions.

BAF (Bunker Adjustment Factor)

Fuel prices can be volatile. The BAF helps carriers manage these fluctuations by adjusting the surcharge based on current fuel costs. It can be a significant portion of your total shipping costs, especially during periods of high fuel prices.

CAF (Currency Adjustment Factor)

Global shipping involves multiple currencies. The CAF helps mitigate the risks associated with currency fluctuations. It ensures that carriers receive the agreed-upon price, regardless of changes in exchange rates.

PSS (Peak Season Surcharge)

During high-volume shipping periods, like the holiday season, carriers apply a PSS to manage the increased demand. It helps carriers cover the costs of additional staff, equipment, and logistics required during peak times.

SUEZ (Suez Canal Surcharge)

Using strategic routes like the Suez Canal comes with extra tolls. The SUEZ fee covers these additional costs. It is applied to shipments that transit through the Suez Canal, which is a key route for cargo moving between Europe and Asia.

PANAMA (Panama Canal Surcharge)

Similar to the Suez Canal, the PANAMA surcharge applies to shipments that transit through the Panama Canal. It covers the tolls and additional costs associated with using this important route between the Atlantic and Pacific oceans.

ACC (Alameda Corridor Charge)

The Alameda Corridor is a 20-mile freight rail that transports containers directly from ports to national rail lines. The ACC applies to shipments using this corridor in Southern California. It helps maintain and improve the infrastructure of this vital transportation link.

EQS (Equipment Surcharge)

If your shipment requires special equipment, like flat racks or open tops, an EQS fee may be applied. It covers the additional costs of providing and maintaining this specialized equipment.

CGS (Congestion Surcharge)

When ports are congested, loading and unloading take longer. The CGS helps carriers cover the costs associated with these delays. It can vary widely depending on the level of congestion and the specific port.

How Do FCL Surcharges Affect Shipping Costs?

FCL surcharges can significantly impact your total shipping costs. It’s essential to consider these surcharges when budgeting for your shipments. Surcharges can vary based on factors like:

By understanding how these factors influence your FCL surcharges, you can make more informed shipping decisions. Staying on top of these fees is crucial for maintaining a competitive edge in your industry. Pro tip: Work with your freight forwarder to get detailed breakdowns of your shipping costs, including all applicable surcharges.

Strategies to Mitigate FCL Shipping Surcharges

There are strategies you can use to mitigate the impact of FCL Shipping Surcharges:

  1. Negotiate contracts: Work with your carrier or freight forwarder to negotiate favorable contract terms. You may be able to secure lower surcharges or lock-in rates for a set period. Building strong, long-term relationships with your shipping partners can lead to more flexible contracts.
  2. Time your shipments: If possible, avoid shipping during peak seasons when the PSS is applied. Shifting your shipment by a few weeks can lead to significant savings.
  3. Optimize your cargo: Efficient cargo loading and unloading can help reduce the impact of the CGS. Work with your carrier to optimize your container utilization. This may involve using specialized equipment, like pallet collars, to maximize space.
  4. Use fee codes to your advantage: The correct fee code can make a huge difference in your surcharge costs. Double-check that your shipments are using the most appropriate codes for your cargo and route. If you’re unsure about which codes apply, don’t hesitate to ask your freight forwarder for guidance.
  5. Stay informed: Keep up with industry news and trends to anticipate changes in surcharges. This can help you budget more accurately and make strategic shipping decisions. Subscribe to industry publications, attend webinars, and connect with other shippers to stay in the loop.

How Can Freightos Help with FCL Surcharges and Fee Codes?

Freightos can help you navigate the complexities of FCL fee codes, ensuring you’re using the right codes for your shipments. We provide insights on how to optimize your shipping strategy to minimize the impact of surcharges. With our advanced technology and industry expertise, we can help you stay ahead of the curve and adapt to changes in the market.

With Freightos, you can ship with confidence knowing that you have a trusted partner on your side. We’re here to help you navigate the choppy waters of global shipping and come out on top. Our mission is to make shipping as easy and accessible as booking a flight online.

Let’s set sail together and make your FCL shipping journey smooth sailing! Grab a quote today to see how we optimize your shipping strategy and keep you ahead of the competition. Unlock the full potential of global trade and take your business to new heights, today!

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Jude Abraham

Jude Abraham is Freightos’ Content Marketing Lead, a seasoned high-tech storyteller and marketing strategist who has created award-winning content for global brands. Off the clock, Jude revels in the complex flavors of spicy curries, savors the balanced notes of an Old Fashioned, and spends countless hours indulging his fascination with ancient esoteric books.

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