Global sea trade has been trading blind for centuries because once the ship left the port of load with the goods, there was very little visibility on the whereabouts of the ship or the condition of the cargo till it arrived at the destination..
Historically, the shipping and freight industry has been slow to adopt new technologies and standards, unlike its airborne cousin which is highly standardized and regulated internationally..
The advent of containerisation and intermodalism, made ascertaining the whereabouts of a container all the more difficult because containers move to remote locations with relative ease using a combination of rail and road options..
With the exponential increase in the movement of container volumes around the world, it would be impossible to meet all the requirements of the customer using manual processes..
There has been a noticeable acceleration in the digitalisation of the industry in the last decade and this digital evolution is set to shape the future of the industry..
As much as the industry needs to embrace the digital evolution and the competitive advantage it can provide, there are several challenges as well.. It is more than just about getting together the required hardware and software and converting a paper based model to a systems based model..
It requires innovation.. Innovation is not a product but rather a culture that needs the right people following the right methodology using the right tools with the right thinking.
One company that presents innovation as being at the heart of its service offering is Ocean Insights – Innovators in Container Tracking..
Here is my review of Ocean Insights’ container freight visibility platform and what the industry can expect from this platform..
The issue of what the Federal Maritime Commission (FMC) may consider in assessing whether a demurrage or detention practice is unjust or unreasonable has seemingly been put to rest with FMC having the final word..
On the 28th of April 2020, the FMC issued its final rule on its interpretation of the Shipping Act prohibition against failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property with respect to demurrage and detention..
International trade continues to experience growing pains related to demurrage and detention charges.
Unfortunately, global transport interpretations result in an assumption that these terms are interchangeable.
Depending on the origin and destination, they have different meanings, especially in the U.S. In fact, the Federal Maritime Commission (FMC) took the exuberant step to eliminate confusion and streamline port management.
While beneficial, the new interpretive rule still leaves room for error, notes FleetOwner, lacking the force of legally bound duties.
To avoid an assumption of decreased demurrage and detention fees and keep ocean freight spend under control, shippers need to understand their real impacts and how these fees amount to significant issues in the global supply chain.
Demurrage and Detention has been a bone of contention between shipping lines and customers for several years..
Shipping lines have been charging demurrage and detention costs on containers that the customers do not pick up or turn in on time, a situation that prevents shipping lines from utilising their equipment effectively..
Customers (importers mainly) on the other hand have been complaining about shipping lines using unfair practices when charging demurrage and detention even if the fault is not on their side..
Maybe there is truth on both sides and in terms of this issue, the Federal Maritime Commission (FMC) is not leaving anything to chance..
The FMC has called for public comment on its Interpretive Rule on Demurrage and Detention under the Shipping Act and in assessing just and reasonable regulations and practices relating to demurrage and detention charges..
As you maybe aware, the Federal Maritime Commission initiated investigation, Fact Finding 28, in March 2018 to look into the question whether demurrage and detention charges in the shipping industry were justified..
Industry stakeholders raised a petition to address the question whether demurrage and detention fees charged to shippers for storing containers and using equipment beyond the carrier’s or terminal’s allowed “free time” were just and reasonable..
This question arose on the back of demurrage and detention charges levied by the port, terminal and shipping lines to the shippers especially in the key USA gateways of Los-Angeles/Long Beach on the West Coast and New York-New Jersey on the East Coast..
Here are the results of the investigation and its findings..
Even though there are distinct differences between demurrage, detention and port charges, many are still oblivious to these differences and there have been several questions on this blog relating to these charges..
Let me explain how demurrage, detention and port charges work..
Shippers are becoming increasingly active stakeholders in the logistics business, forcing carriers and forwarders to adapt. Portrix Logistic Software’s Global Head of Marketing, Christian Sørensenon, talks to Shipping and Freight Resource about the changing shipping landscape and provides tips for shippers and logistics companies to stay ahead of the curve.
This is a question that has arisen on the back of rising demurrage and detention charges incurred due to port and terminal congestion at key USA gateways such as Los-Angeles/Long Beach on the West Coast and New York-New Jersey on the East Coast..
Are demurrage and detention charges paid by the shippers to the ports, terminal and shipping lines justified especially in light of the port congestion..??