Are you wondering why your container was charged detention or demurrage due to delayed delivery or return? And what’s the solution to reduce or mitigate these container demurrage and detention charges? No worries, your organization can take plenty of intelligent measures to reduce demurrage and detention fees or even avoid them altogether.
Let’s explore intelligent ways to reduce demurrage and detention fees in logistics through this blog post.
Demurrage fees are charged to each container daily beyond the discharge date until the cargo is taken out of the port.
Freight detention charges in logistics, meanwhile, are charged daily per container from when the shipment is taken out of the port until the containers are returned to the shipping line’s pre-defined depot.
Because of terminal congestion, these freight detention fees have been increasing and becoming a high cost if measures are not considered to reduce freight detention and demurrage charges.
Here is a quick comparison table highlighting the differences between demurrage and detention fees.
Proper planning for your equipment, labor, transport, and paperwork can reduce your demurrage and detention fees or even prevent them altogether. Here are 7 tips for keeping your demurrage and detention fees to a minimum:
Demurrage, detention fees, and your number of free days are all clearly stated in your transport contract. This agreement serves as a clear reference for understanding the charges and timeframes associated with your shipments.
Plan on shipping and returning your containers as soon as possible. It will help you achieve more flexibility and a longer timeline in case unavoidable challenges arise, such as severe weather or backlogs at the terminal. The same goes for loading times: little time buffers can make a big difference.
It’s also vital to track your container throughout the entire transit and be prepared for its arrival. Align with a digital forwarder that uses the latest technologies to make this possible. This is necessary for keeping demurrage and detention fees to a minimum.
A good forwarder reviews for alternative freight rates and services and even search for available terminals nearby if your freight is redirected. If anything goes wrong with your original transport plan, having other options in mind is essential to avoid excessive fees.
To prevent demurrage and detention fees, you must be aware of customs clearance procedures and policies at the terminal. It is also critical to remember that even geographic location can play a significant role as different countries put different customs rules.
Do your research to determine whether you are shipping to a destination where long clearance times pose a risk.
An experienced forwarder possesses knowledge of local practices and understands how to negotiate with shipping lines to ensure you get more free days for your container. They know customs policies and how to select the right partners at the destination port.
They work with a global network of independent agents with local expertise to deliver your freight quickly. Shipping lines may also give forwarders more time, lowering the risk of demurrage and detention fees.
When you are still deciding exactly when your cargo will arrive, bypassing demurrage and detention fees becomes all the more challenging. Unfortunately, announced ETAs often need to be more accurate, and anomalies that could lead to significant delays are also often difficult to foresee.
This makes it vital to invest in supply chain visibility solutions. In addition to delivering a wealth of other benefits, creating a fully transparent supply chain can go a long way toward reducing your demurrage and detention fees by guaranteeing that you can always track the location and status of your freight.
By employing appropriate technology, you can enhance your supply chain in several ways, such as maintaining document organization and obtaining real-time container tracking for supply chain visibility. This helps in optimizing your supply chain and reducing demurrage and detention fees.
Shippers can minimize these fees by using exception management and proactive alerting to lower their transportation costs and maintain a competitive advantage. To discover more about how you can reduce detention costs with innovative tech solutions, contact the team Fretron today.
We are Fretron, India’s 1st cloud-based, collaborative Transport Management System, which connects Shippers, Logistic Service Providers, and Fleet Owners to enable a simpler, efficient & responsive logistics network.
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