Demurrage and detention charges are commonly used terms in the logistics business. Demurrage chargeis raised when the full container is not moved out of the port/terminal for unpacking within theallowed free days. Whereas detention charge is raised when the empty container has not been returned to the nominated depot within the agreed free time. The free days define the number of days the container can be used for free. If the free time is surpassed, the user has to pay the assigned demurrage and detention charge. These charges are usually calculated on a per day basis. Demurrage and detention are in most cases out of your hands, however, you can mitigate the risk of these unpleasant additional charges with coherent planning and preparation.
Here in this section, we have listed down tips to avoid demurrage and detention charges. Whether you are a domestic project freight forwarder or an international freight forwarder in India, ensure you follow these tips diligently. These tips will not only help you eliminate unwanted costs but will also help you have a hassle-free shipping experience.
- For the best delivery performance, it’s recommended that you simplify your internal shipping processes. Streamlining your process may require a lot of work upfront, however, it could save you a lot of money in the end.
- Identify your cargo, the port, and the routes your cargo will travel. For example, if you know that your cargo will take a long time to load or unload, be sure to communicate that with your driver so they can plan in advance for any time delays.
- Whether you are an ocean freight forwarder or an air freight forwarder make use of technology to improve the process flow. It will not only eliminate cumbersome manual processes but will also help you achieve consistency, effectiveness, timely delivery, and profit.
- Delays in shipping are common and as a result, businesses incur a multitude of extra charges which they have not outfitted for. Make sure the cargo is ready on time. Dispatch your cargo well in advance. Allow yourself some buffer time. Plan loading/unloading time with an eye on possible delays.
- Keep all your documents in order for custom clearance. Ensure that all documents like your invoice, bill of lading, and certificate of origin have consistent information. Inconsistent details will not only create problems at the customs stage but will also delay the shipment process.
- Try to negotiate the demurrage and detention charges instead of accepting a quote as it is. Negotiate with port officials or carriers. You can, for instance, request more free days for your cargo and thereby save on demurrage and detention. Often, port officials grant more time to shippers with a large volume of cargo.
- Be a smart project cargo forwarder and keep a Plan B ready. If you have a backup plan in place, you can offset the cost of demurrage and detention. For example: If you know that you will be handling a congested port, find alternatives if possible – just in case the scheduling becomes tight. This will give you a bit of leeway should you need it.
- Be sure you maintain the communication protocol throughout the process. Make sure all your partners, custom officials, and terminal officials are on the same page. It will help prevent any unnecessary delay.