The proven way to Avoid Demurrage and Detention Charges

The proven way to Avoid Demurrage and Detention Charges

Detention and demurrage (DD) charges are a shipper’s worst nightmare. These charges can add up to thousands of unforeseen dollars spent and have a massive impact on a shipper’s financial bottom line. The number of DD claims submitted to shipping lines by the exporters and importers has increased drastically in the year 2021- 2022.

Luckily, there are ways to prevent these unanticipated expenses.

This is easier to do than you may think…

Arrival notice is just courtesy of the carrier, not an obligation

It does not matter how outrageous it sounds, the shipping line has no obligation to send arrival notice to the cargo receiver.  Shipper must be active, follow up cargo arrival day and rush to gate out containers within the free time.

Use the online tools available to you via your shipping line’s website

Almost all shipping lines offer a free trace and track service on their website and importer can check where the container is. Do not trust blindly the customs agent or freight forwarder at the destination to inform you about the cargo arrival day.

Using the online tracking system you will note that there is an ETA date for vessels en-route to each port. Monitoring where your container is on a regular basis will help plan accordingly, ensure import documents are in order, there are no documentation delays when the container arrives at its destined port.

Let’s write in stone:  it is the shipper’s obligation to check cargo arrival date and reach out to the carrier if any documents are missing e.g. freight invoice.

Create a checklist

This is a simple tool to use for every shipment you are expecting to receive and should be complete prior to cargo arrival at its destination. For the most part, the list will remain the same. However shipping hazardous,  dangerous, reefer, OOG cargo additional documents may be required depending on the destination country.

Below is a key list to give you a heads up:

1. Freight Invoice received from the carrier and paid. 
Unless the importer has a credit line with the carrier, always make sure if you received and paid your ocean freight invoice before cargo arrival. If you have not paid for freight, your container will not be allowed to gate out the terminal until it is paid.

2. Custom documents.  
Check all the other documentation is in order so that you can complete the customs process efficiently.

3. Special rules, veterinary inspection, etc.
Agricultural cargoes may require additional checks and documents for importation purposes to certain countries. Ensure you check the local importation rules and you have any additional documents that may be required, such as phytosanitary and/or fumigation certificates.

4. Transporter on standby. 
Ensure you nominate a transporter prior to container arrival in order to guarantee that there is a truck available at the time you require it and your container is not delayed in the port terminal.

5. Inform the warehouse. 
Ensure you advise delivery day so that the container can be offloaded and empty returned promptly.

Conclusion

Most of the demurrage and detention claims we receive to defend could be avoided or at least heavily reduced if shippers just followed the above steps as a process of business due diligence.

Hope these insights bring value to some shippers.