Carrier Security Fee & Terminal Security Charge

The 9/11 attacks in the USA, changed many things for many people. The shipping and freight world was also affected in the aftermath of these attacks.

After the 9/11 attacks, the International Maritime Organisation decided to develop, recommend and implement a set of security measures applicable to ships and port facilities around the world.

These measures, called International Ship and Port Facility Security Code (ISPS) are implemented through International Convention for the Safety of Life at Sea (SOLAS), 1974 chapter XI-2 to enhance maritime security.

The purpose of the ISPS Code is to :

•        provide a standardized, consistent global framework across the maritime world
•        this enables various countries (that have subscribed to the code) to evaluate, detect and assess the security risks to the ships calling at their ports and allows them to take appropriate measures to determine the security levels they must follow and the corresponding security/preventive measures to be taken
•        to institute respective roles and responsibilities of all parties (governments and government agencies subscribed to the code, port administration and the shipping and port agencies) concerned, at a global and domestic level, to ensuring maritime security
•        to exchange/share relevant security-related information
•        and to assure shipowners that adequate and proportionate maritime security measures are in place for their ships

As part of following the ISPS Code, each of the entities above, are required to place appropriate security officers/personnel on each ship, in each port facility, and in each shipping company to prepare and to put into effect the security plans that will be implemented.

For the safety and protection of all concerned, the ISPS code must be implemented in its fullest form, and this means the employment of qualified and trained personnel capable of implementing the security measures set by the port and the ship.

The security arrangements have to be done both from the Ships side and from the Ports side.

All of these arrangements will involve additional costs for the shipping line and the port. In order to cover these costs, the shipping lines/ship operators implement the ISPS Charges.

The ISPS charges charged by the carrier is known as Carrier Security Fee to cover the carrier’s cost towards the maintenance of the ISPS code.

Similar to the ship, the container terminal also levies the carrier a cost to follow the requirements of the ISPS code at the calling port/terminal. This cost is known as the Terminal Security Charge.

The ISPS charges generally form part of the freight quote and are required to be paid along with the freight.

The quantum of the ISPS charges are set by the line depending on the port of call as some of these costs are variable.