How to Avoid Demurrage and Detention Charges?

Demurrage and Detention quickly become a shipper’s nightmare and can result in thousands of dollars in per diem charges. Costs that arise because of bad planning, unforeseen circumstances and bad communication play such a big role in the final cost of freight. Demurrage and Detention charges are a matter of the allowed free-days – if these days are exceeded, the container user has to pay a charge calculated per day. In some cases, you may be charged up to $200 – $400 per day per container.

Demurrage and Detention as an importer

Pick up and move your containers out of the port once they are discharged from the vessel.

• In conventional shipping, the free days are often somewhere between 3-5 days. A Demurrage charge is levied should it take you longer than that to get your containers.
• Detention refers to the time outside the port, where the shipper holds on the container beyond the allowed free days. This is done in an attempt to decrease the containers turnaround time and make shipping more efficient.

5 tips to avoid demurrage and detention charges

Demurrage and detention are in most cases out of your hands as a shipper, and hard to control. However, there are ways to minimize the risks, and avoid unnecessary charges: a good freight forwarder will help.

1. Negotiate terms Noone should sign a contract just as it is, but read through it carefully, as the per-diem charges and fees are ultimately determined in the transportation contract. It is always good to negotiate terms of a freight contract, and when it comes to sea freight, it is best to negotiate before the cargo vessel leaves the port, rather than after your container is stuck at the destination terminal.It is important to know which destinations are “at risk” because of long customs clearance times: a good freight forwarder can anticipate this  risk, and negotiate with the carrier more free days for your container.  Carriers may grant freight agents with a large volume of cargo some more time, and that will avoid demurrage and detention charges for your cargo.
2. Manage your schedule efficiently You and your  sea freight agent must make sure to dispatch your cargo as far in advance as possible! This gives more flexibility and a bigger time frame to unforeseen challenges such as bad weather or backlogs at the port. The same is applicable to loading times, where just small time-buffers can make it for you!
3. Always have a plan B A good freight agent will assess alternative truck rates, other truck services or even look for available terminals nearby in case your cargo needs to be rerouted. If everything goes wrong with the initial plan, it is important to have another option to avoid large costs.
4. Be well-prepared for local customs To avoid demurrage and detention risks, one must be in good knowledge of the customs clearance processes and port regulations, and understand that even geography plays a huge role, as different countries have different definitions.
   A good freight agent is highly knowledgeable in customs, and knows to choose the right partner at destination. Freight forwarder’s networks enable independent agents with local expertise to cooperate and deliver your cargo smoothly, all around the globe.
5. Bring your own container If it is a pain to find SOC containers (Shipper Owned Containers) reaching out to your network, you or your freight forwarder can organize everything.Container xChangehas made it easy to use or supply containers for SOC/ one-way use on their neutral online marketplace. Using their online platform, you save up to $200 to $400 or completely avoid Demurrage and Detention as their per-diem fees are below $5 per container.