What is a LINER OUT CHARGE in shipping..??

Liner out charge, liner in charge, free in, free out……………… so many jargons in shipping and so little explanation..!!

As the author of this blog, I owe a lot to some of the readers who ask questions that may sound basic, but are important and thought provoking questions that not only help others to understand various aspects of shipping, but also helps me keeps my wits sharp..

Below is one such question asked by a reader of this blog..

What exactly is the LINER OUT CHARGE.. Shipping Lines are quoting this for cargo to West Africa..??

As described briefly in my previous post (https://www.shippingandfreightresource.com/2009/01/09/answers-to-test-your-shipping-knowledge-week-012009/), in general,


“LINER OUT means the cost of discharging the cargo at the destination port is included in the freight rate”

So although this “Liner Out Charge (LOC)” appears to be a new charge, on the West African trade lane, under the auspices of Asia-West Africa Trade Agreement (AWATA), the cost of discharging the cargo at the destination port has merely been separated from the Basic Freight and shown as an additional charge..

what is liner out charge

AWATA members include China Shipping Container Lines (CSCL), CMA CGM, Delmas, Gold Star Line, Maersk/Safmarne, Mediterranean Shipping Company (MSC), MOL, and Pacific International Lines (PIL)..

This was apparently done so to create a more transparent freight structure..

Depending on the shipping line however, the total freight cost to the client should not be affected as the cost is only split and shown separately..

Other variations are as below :

FIO, FILO, LIFO, FLT

(These terms are more often used in bulk/break bulk shipments, and not much for containerized shipments)

FIO : Free In/Out which when used from a liners perspective means that the client (shipper or consignee) are responsible for the loading (In) and discharging (Out) costs at the Port of Load and Port of Discharge respectively.. The lines responsibility and costs commences/ceases when the cargo passes the ships rail..

FILO : Free In/Liner Out which when used from a liners perspective means that the shipper is responsible for the loading (In) costs at the Port of Load and the Liner (carrier) is responsible for the discharging (Out) costs at the Port of Discharge..

LIFO : Liner In/Free Out which when used from a liners perspective means that the liner is responsible for the loading (In) costs at the Port of Load and the consignee is responsible for the discharging (Out) costs at the Port of Discharge..

FLT : Full Liner Terms which when used from a liners perspective means that the liner is responsible for the loading (In) and discharging (Out) costs at the Port of Load and Port of Discharge and basically the liners responsibility and costs commence/ceases at the shoreside where the cargo is made available..)

Also suggest to read my other articles about Freight Charges..

 

*** End of Article ***

13 thoughts on “What is a LINER OUT CHARGE in shipping..??”

  1. Dear hariesh
    Coming back on this topic about Liner Terms
    Every of your post and any other articles mention that Liner terms precise if loading/unloading included or not.
    i’m afraid this may be understood as THC included or not.

    as per my knowlegde, THC covers all charges related to horizontal handling on terminal, from gate in to under tackle (or under quay crane)
    so THC are not related to loading/unloading cost.

    then how do you consider this on an invoice if you want to split cost of freight with load/disch cost.
    i personnly never seen any invoice dsiplaying load/disch charges, neither on any carrier tariff.

    Thks for any information

    Reply
    • Hi Vincent, this segregation of charges occurs only in non-containerised cargoes and more in the general cargo arena.. In containerised shipments, the terminal handling charge is a single charge which is generally same for discharge or load and in most cases is charged by the terminal to the shipping line who then charge the customer..

      In terms of general cargo or break bulk, the load/disch cost is either included in the FRT if it is an FLT term or not shown on the invoice as in other terms, the shipper or consignee will be handling the cargo and paying for it so the liner does not have to charge it..

      I hope I understood your question..??

  2. Dear Mr.Hariesh,
    Being a buyer How do we assure that the seller has booked the vessel on a FILO of FLT terms or is it mentioned in the BLcopy? What are the precautions to be taken to confirm its either in FILO of FLT terms as required by us.
    Appreciate your kind response

    Reply
  3. Dear Mr Hariesh
    what about the freight rate? in fio &Flt & Lifo & filo , is the freight rate is separated or include them ? for example lifo terms the freight rate is inculde port of loadiong cost in ? and so on ?

    Thank
    Hassan

    Reply
  4. Highly informative and my longstanding ambiguities stand removed. Being a trainer , these concepts are very critical.

    Let me share it with you that most of our Central Bankers were not clear about these concepts.

    Thanks a lot

    Muhammad Anwar ul Haq

    Reply
  5. Very helpful info, but still not clear to me;

    Do you mean that as a shipper if my contract and BL with the freight forwarder is Prepaid / LILO , then the importer won’t be paying for any charges at the port of destination in regards to releasing and receiving the cargo and the only to pay for will be customs and VAT ?? …

    Reply
    • Hello Mohamed, Liner Out covers only the cost of discharging which is included in the freight, so if you are a seller and you know that this is a Liner Out port, then you have to adjust your price to your buyer accordingly.. If there are other charges after discharging then of course your buyer has to pay for those..

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