2023 - Navigating Ocean Container Fees: Demurrage and Detention
Demurrage & Detention of ocean containers are costs that can have a significant impact on a company's bottom line. Fortunately, with the right strategies, these punishing costs can be avoided or minimized.
There are a few ways to avoid or minimize detention and demurrage costs on ocean containers:
· Plan ahead: Make sure you have a clear understanding of the shipping schedule and the timeline for loading and unloading the container. Discuss delivery and cargo scheduling prior to loading and delivery with all parties, including shippers, carriers, and third-party service providers, to create a smooth cargo loading process and avoid delays.
· Critical: Do your research and be sure that you’ll be able to comply with the number of free days outlined in the contract or your negotiated pricing. Speak to shippers, freight forwarders and customs brokers to understand how long it normally takes to process a container. Free days can be a life saver but must be negotiated prior to booking the container(s).
· It's crucial that your service provider has a tracking system that enables real-time information regarding the delivery of your cargo. Be sure to check that your shipping line or freight forwarder offers such visibility and reporting.
· Consider working with a service provider with real-time predictive data and analytical tools that can help you better monitor and avert issues, rather than reacting to them after they occur.
· Arrange efficient and expeditious freight and shipment transport procedures with all the executing parties, including the service provider(s) and customs brokers, to have a smooth loading and unloading process and to avoid missed deadlines.
· At Shippers First Logistics we always hold conversations with clients on alternative shipping options: These could include, transload operations, SOC or Shipper Owned Containers and One-Way Lease containers are just some alternatives to free you from detention charges.
In Canada, recently the return of empty containers has been one of the costliest components of landed costs for importers. Ocean lines argue that it is "beyond their control" that their nominated rail carriers don’t have the capacity to receive the “empty containers” forcing importers, freight forwarders and drayage carriers to provide storage services on behalf of the ocean lines at the expense of the importer.
Even after these services are rendered on behalf of the ocean lines and until they can accept their empties back, they automate detention fees expecting importers to pay them or put them through a dispute resolution process. However, all additional costs associated with drayage, storage, lift on and lift off, diversion to distant empty depots are for the account of the importer and not the ocean line.
So, what does 2023 hold for importers across the nation?
Does the slow down in volumes re-balance equipment inventories and offer pre-pandemic fluidity?
Is there recourse for importers to recover additional costs for the inefficiencies of the ocean lines and rail lines? Further discussions are definitely warranted.
In a recent experience, Hyundai Merchant Marine quickly reviewed our dispute and immediately resolved the dispute to everyone’s satisfaction.
Will the remaining class of ocean carriers be as empathetic?
Not sure but HMM certainly secured our next bookings.
Happy New Years!
Shippers First Logistics is focused on client facing solutions that offer maximum flexibility while enhancing their day-to-day operations. As a hybrid multi-national company, we seek to remove bureaucracy through technology applications and innovations.
Shippers First Logistics Corporation is the world’s first Official non-DP World, Cargoes Flow Visibility Platform Representative with a focus on North America.
For a demo of the platform please connect with Barry.Murphy@ShippersFirst.com