Tips to avoid extra costs with container freight
A few hidden costs can arise from time to time. It’s important that you understand what they are so you can avoid them - one such hidden cost is container demurrage.
What is demurrage?
Demurrage is a fee from the shipping lines for the use of their shipping containers. You are permitted a limited number of free days (these will vary depending on the carrier and location). Containers not returned within the allotted free time are subject to additional fees by the shipping lines: demurrage.
Why do Shipping lines charge demurrage?
The charge is imposed to encourage you the consignee to load and unload in a timely manner.
Does the demurrage charge vary?
Yes. The demurrage charge may differ from carrier to carrier and from port to port.
The charges also tend to increase per day after exceeding a certain amount of days.
What are the main causes of demurrage?
Time. Delays can occur from a multiple of places from congestion at the port, full payment to customs paperwork.
Tips to consider
- Planning - share cargo and shipment delivery instructions with all parties including carrier, vendors and third party providers for smooth loading and unloading process and to avoid any delays.
- Understand all required documents.
- Have a back-up plan in case of port congestion and also have a list of alternative routes to use just in case.
- Shippers can sometimes negotiate for extended free times.
Can Mainfreight assist?
Yes. To assist you to manage your container deliveries and empty returns to avoid unnecessary costs associated with container demurrage we have a container demurrage alert system in place. The system links our freight systems with both wharf and external carrier systems to update electronically with container availability and de-hire information. This allows us to assist our customers in monitoring deliveries with an automatic alert sent at set intervals advising allocated free time remaining on a container.