Detained & Demurrage Charges
According to a recent report by Container xChange, delayed container charges, known as detained & demurrage in the US, are among the highest in the world, which is out of line with the drop in D&D charges worldwide.
Detention is a fee paid by a merchant to hold a container outside a port, terminal or depot beyond contractually agreed free time. In this part of the contract, the carrier specifies how long the merchant can own the container before a fee is charged.
Demurrage is the fee for the use of containers by merchants at the port. Traders are given “free time” to put containers in port before charges are incurred. The trader will pay the shipping company if the contracted “free time” is exceeded. This fee is intended to motivate traders to move containers out of the port.
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Port congestion was a major factor preventing the rapid movement of containers from the port. Recently, the ports of New York and New Jersey announced they would impose new fees on shipping lines to encourage them to move empty containers out of their ports and make room for more efficient container handling.
Delays in container pick-up and return lead to increased demurrage and demurrage charges. According to Container xChange, the Ports of New York and New Jersey have the highest rates in the world.
High rates and delays at ports are no surprise to the Federal Maritime Commission (FMC). The Federal Maritime Commission (FMC) is investigating reports of shipping lines charging a container fee even when the shipper or truck driver is unable to return the container due to terminal congestion. FMC Chairman Daniel Maffei said, “We should expand and strengthen this investigation to cover cases where shippers and truck drivers are forced to store or move containers and do not have adequate compensation. request,” he said. “The Commission will ask the carriers that have fallen the most behind in picking up their empties what their plan is to rectify the situation. Whatever their answers may be, I will do everything in my power to ensure that carriers do not receive involuntarily subsidized storage for empty containers that belong to them.”
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Pervinder Johar, CEO of chain optimization firm Blume Global, said traders need to be more agile and cast wider nets when choosing ports of entry for their cargo. “With this technology, we can analyze harbors in real time,” he said. “We can see the overall performance of the port. We have immediate data on ships, docks, anchorages or when docked. Then we know how long a container will wait. There is dwell time, all of which allow traders to make informed decisions. Unfortunately, some carriers are strict about port selection. Being agile gives you the opportunity to avoid paying for D&D. “According to Johar, the data also helps traders track the status of their containers. “Multiple companies can be involved in shipping a container, and we need to be able to track everyone involved,” he said.
(adsbygoogle = window.adsbygoogle || []).push({});Source: CNBC
