In the international ocean shipping industry, delays happen. This results in a multitude of extra charges – including demurrage and detention.
- Demurrage is commonly referred to as port storage – loaded containers staying in the port – before vessel arrival or after vessel discharge beyond the time allowed or agreed upon’. In other words, port officials can enforce demurrage charges on cargo that stays at a terminal too long. When exactly you should expect to be charged demurrage fees is less than straightforward. The confusion occurs because the rules vary from port to port and from terminal to terminal, and they can change at any time. Generally speaking, demurrage is assessed by a port authority.
- Detention commonly refers to equipment [container] usage and refers to penalties charged on containers by ocean carriers while the container is outside a port. In other words, return the empty containers promptly.
Tips to Avoid Penalties
Careful advanced planning is imperative to minimize the risk of incurring demurrage and detention charges. Here are some tips:
- Plan, plan, plan. “If you fail to prepare, you are preparing to fail.”
- Communicate cargo and shipment delivery instructions with all parties including carrier, vendors, and third-party providers ahead of time for seamless loading and unloading, and to dodge any delays.
- Have a plan B in case of port congestion and a list of alternative routes.
- Negotiate astutely for extended free times but be aware of the misunderstanding of the word “freetime”. Nothing in business is ‘free’. There is a cost associated with additional freetime that may be added into your ocean freight rate.
- Be informed, and understand all required documents.
The United States Shippers Association
The USSA has always been active in providing its members with:
- Strategic advice,
- Greater negotiating volume,
- Broader negotiation skills,
- Export trading Certificate protection, and so much more.
Please contact us to find out how to become a member of the association, or for further information.
