What is ISPS code and why ISPS is charged – Part 2

In Part 1 of this 2 Part series, we dealt with the topic of what ISPS means and the various parts of the International Ship and Port Facility Security Code (ISPS Code) and security levels..

Here, we will discuss why ISPS is charged and who gets charged for it..

For the safety and protection of all concerned, the ISPS code must be implemented in its fullest form and security arrangements must be made both by the ship and the port..

This means the employment of qualified and trained personnel capable of implementing the security measures set by the port and the ship..

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What ship operators must have in place for ISPS Compliance

• Company Security Officer ( CSO ) – is a person appointed to assess ship security and to implement the SSP (Ship Security Plan) as per the ISPS code.. The CSO monitors the situation, deals with it, and modifies the SSP as required..
• Ship Security Officer ( SSO ) – is a person from the ship who is in charge of security on board the vessel.. The SSO nominates duties to the other crew to be carried out on board the ship..

• Ship Security Plan ( SSP ) – is the plan that outlines the duties of the various crew members supervised by the SSO, who have to be followed during the various security levels..

Apart from the above personnel, there can also be various security systems and equipment on board the ship, including metal detectors, a Ship Security Alert System (SSAS) that can covertly notify a shore-based authority about any security threat, CCTV surveillance, and access control systems..

How port facilities organise security under the ISPS Code

• Each port appoints a Port Facility Security Officer ( PFSO ) with the primary responsibility of implementing the Port Facility Security Plan (PFSP) and also to assess the security at the port facility and fix the security levels for the port and the berth..

• Port Facility Security Plan ( PFSP ) – is the plan of action that has to be followed by the port at the various security levels as per the guidelines set by the port and the ISPS code..

• Similar to the ship side, the port facility also needs to have security systems and equipment like metal detectors, handheld scanners, CCTV, access control systems, and perimeter monitoring to detect and deter any security threats within the port facility..

Why are ISPS charges levied to the customer..??

As you can see from above, there is a lot of manpower, planning, equipment, etc. that goes into the implementation of the ISPS code and ensuring the safety and security of the ship’s crew, port staff, and also of the cargo..

To cover these costs, the shipping lines/ship operators implement the ISPS Charges..

Therefore, you might find that the lines charge what they call the Carrier Security Fee, which, as the name implies, is to cover the carrier’s cost towards the maintenance of the ISPS code, and also Terminal Security Charge, which, as the name implies, is to cover the cost of following the requirements of the ISPS code at the relevant port terminal..

The ISPS charges generally form part of the freight quote and are required to be paid along with the freight, depending on who pays what charges in a sea freight shipment..

The quantum of the ISPS charges is set by the line depending on the port of call as some of these costs are variable, and it is therefore it is important to understand the items in a freight quotation..

It is also worth noting that as of July 2025, the IMO’s Sub-Committee on Implementation of IMO Instruments (III 11) finalized guidance confirming that ISPS Code verifications can only be carried out remotely under exceptional circumstances..

This underlines the fact that ISPS compliance remains a hands-on, in-person process, which further justifies the costs associated with its implementation..

Article FAQ

What is the difference between the Carrier Security Fee and the Terminal Security Charge..??

The Carrier Security Fee covers the shipping line’s cost for maintaining ISPS compliance on the vessel, including the Ship Security Officer, Ship Security Plan, onboard equipment, and audits.. The Terminal Security Charge covers the port facility’s cost for implementing its security plan, access control, surveillance systems, and the Port Facility Security Officer..

Why do ISPS charges vary from port to port..??

ISPS charges are not standardised globally.. Each port facility has different security requirements, labour costs, infrastructure needs, and threat levels.. Shipping lines factor in the cost of compliance at each specific port when setting the charge, which is why you will see different ISPS amounts on different trade lanes..

How is the ISPS charge typically collected from cargo owners..??

The ISPS charge is usually bundled into the freight quotation and paid together with the ocean freight.. The party responsible for paying the freight, whether the shipper or consignee, depending on the Incoterms rule used, typically covers the ISPS charge as well..

[Critical Note] What happens if a ship or port is not ISPS compliant..??

A non-compliant ship can be denied entry to port, detained by port state control, or refused an International Ship Security Certificate (ISSC).. For port facilities, non-compliance can mean restrictions on the types of vessels allowed to call and increased port state control scrutiny.. In both cases, the commercial and operational consequences are severe..