Crux Systems Insights

5 tips for avoiding demurrage fees

June 22, 2017 by Siri Casper |

Logistics

When you’re moving cargo around the world, fees charged by shipping lines, carriers and ports can all vary. But one thing is certain: they can add up quickly.

One of the more common fees is demurrage for cargo that is left too long in the terminal. Typically, you’ll have three to five days to pick up your container after it has arrived at a terminal and been discharged from the ship.

The shipping lines don’t want you using their containers for free long term storage, and the terminals want to clear cargo out of the yard as quickly as possible. So if your cargo stays past its last free day, you’ll be charged demurrage fees ranging from $75-$200 per day, typically increasing the longer the container is left at the terminal.

Now imagine shipping 10 containers and missing the last free day by just a single day. This could result in an average of $1,000 in fees in less than 24 hours.

Follow these simple tips to reduce the chances of being assessed demurrage fees on your cargo:

1. Plan ahead

Avoiding gambling on the hope that everything will run smoothly. Disruptions due to bad weather, port backups, or human error in calculations may be completely out of your control, but they do happen. Allow for some extra time to handle possible detours. A little buffer room goes a long way in avoiding those daily fees.

2. Have a backup plan

Ports get congested, systems crash, your carrier may have issues; there are many reasons that may cause delay. Having a backup plan for these instances, such as making use of an alternative carrier or route, can help reduce the chances of being tied up in delays and receiving fees and fines as a result.

3. Do your research

With different countries requiring different documentation and having different rules and regulations, it pays to do your research beforehand to ensure all the necessary paperwork, forms, and procedures have been followed. Clear any customs holds before the ship arrives at the terminal.

4. Negotiate

If you ship higher volumes, you may be able to negotiate for better terms. Though the minimum amount varies, negotiating an extended free period allows extra time for planning as well as a buffer for those rare occasions when plans for picking up your containers falls behind schedule.

5. Track your containers with real-time data

Having visibility into your container’s location and status will greatly reduce the chances of a misstep. At a minimum, you should know your container’s estimated time of arrival at a terminal, whether it has any holds, and when it has been offloaded from the ship and is ready for pickup. If you’re working with information that is unreliable, delayed, or incomplete, you can easily miss your last free day.

To see how easy it is to track your import containers with real-time data from Crux Systems, sign up for a free account today.