Demurrage and Detention is a pain for many in the industry – whether you are a carrier or customer.. I have written several articles relating to demurrage and detention which you can read here..
In one my previous articles, I explained the Difference between Demurrage and Detention..
After reading this, a few of my readers have asked me to explain the causes of demurrage and detention..
There are several reasons a container(s) can incur demurrage and/or detention or combined demurrage and detention.. Here are some of the major reasons..
The Federal Maritime Commission (FMC) has been thrust into the limelight recently due to various challenges faced by the trade and complaints laid by customers in terms of demurrage and detention … Read more here..
Digitalisation is the use of digitisation (the transition from an analog format to a digital format) and digital technologies to convert your business to a digital business..
Digitalisation has been the buzzword in the shipping and freight industry in the last decade.. Its influence and coverage in the industry is increasing day by day..
Apart from the increase in efficiency and speed to market, one of the main advantages of digitalisation is cost saving..
There are several areas where cost can be saved using digitalisation.. Central among this cost saving opportunity is Time which is an important commodity and when it comes to shipping and freight, time is really money..
Digitalisation can assist customers a great deal in terms of saving cost on avoidable costs..
To many customers around the world, demurrage and detention costs represent some of the most expensive fees that they will incur in the process of a trade transaction..
Although demurrage and detention are not standard charges that are applicable on every shipment, there are many shipments on which these charges are levied..
They are probably two terms that top the list of controversial charges levied by shipping lines on customers..
The seriousness of demurrage and detention charges is evident when you consider that EVERY shipment has the potential to incur both these charges during loading and unloading..
Demurrage and Detention really are avoidable costs and it is something that can be defeated with data..
Learn exactly how, in a webcast which focuses on ways and means customers can reduce and/or avoid demurrage and detention charges through the effective usage of data..
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..
Demurrage and Detention – two terms that may be at the top of the most controversial charges levied by shipping lines..
While shipping lines may consider demurrage and detention a necessary evil, importers and exporters around the world may beg to differ..
A question that one of the readers raised was
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.
What is the difference between a shipper owned container and a carrier owned container..??
A shipper owned container is a container owned by the shipper of the goods and a carrier owned container is a container owned by a carrier..
But the question may be a bit deeper than just the difference in definition between the two.. Let’s see..
Are demurrage and detention charges justified..??
No this is not my question..!!
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..??
Does demurrage and detention apply to LCL shipments is a question asked by a reader after reading the very popular article about the difference between demurrage and detention..