Port Congestion Unfairly Causes Demurrage & Detention Fees Levied on Shippers

Port Congestion Unfairly Causes Demurrage & Detention Charges Levied on Shippers


U.S. shippers and truckers are being hit with detention and demurrage charges for causes past their management. Once more. Or perhaps I ought to say nonetheless.

For individuals who are uncertain or unaware of what these charges are, right here’s a fast definition:

Demurrage Charges

Charges terminals cost for not selecting up delivery containers of products from the port past the “free time” allotted after being offloaded from a ship. The price is typically known as “storage.”

Detention Charges

Charges carriers cost for not returning empty delivery containers from a cargo to the port inside an allotted variety of days. The price can also be name a “per diem cost.” The variety of days shippers are allowed to maintain containers earlier than returning them to the port can fluctuate and are referred to as “free days.”

Each of the above charges are usually cumulative every day and might rapidly turn into severely costly.

Again in March, we blogged about shippers being hit with coronavirus-related detention charges when a rash of clean sailings and restricted port hours for COVID-related causes usually made it unattainable for shippers and truckers to return empty containers on time. Now, we’re seeing port congestion trigger each late pickup and return of delivery containers – however actually not for a scarcity of attempting on the elements of shippers and truckers.

The very robust peak season 2020 is seeing – extending into November thanks partially to the stocking and restocking of reopening companies and a large improve in on-line procuring on high of delivery to arrange for the vacation season – is combining with COVID-related smaller numbers of dockworkers at ports to create port congestion. Congestion on the Ports of Los Angeles and Lengthy Seaside is particularly dangerous proper now, however congestion is being seen at ports all alongside the west coast and at east coast ports as nicely.

Kim Hyperlink-Wills wrote an entire article in American Shipper about how the Port of New York and New Jersey is striving to maintain cargo shifting in the course of the record-setting quantity numbers it’s seeing:

Port of New York and New Jersey officers introduced Monday they’re “taking additional measures to maintain the availability chain fluid.”

The port set a month-to-month container report in August with 688,365 twenty-foot equal items (TEUs). It then broke that report in September by dealing with 720,969 TEUs, a 15.4% year-over-year improve.

In response to the port, these efforts embody protecting marine terminals open on holidays; including additional hours of operation on nights and weekends; infusing additional chassis into the community; working time beyond regulation to maintain chassis items roadworthy; and including empty railcars in addition to trains into the intermodal community.

On the west coast, the place the Ports of Los Angeles and Lengthy Seaside deal with extra cargo quantity than some other ports within the U.S., the wrestle to maintain cargo shifting is just not going nicely, proof by the opening strains of an article by Ian Putzger within the Loadstar:

The continual congestion that has plagued the US port advanced of Los Angeles and Lengthy Seaside because the summer season goes from dangerous to worse.

The California Trucking Affiliation (CTA)  and Harbour Trucking Affiliation (HTA) described the motion of cargo by means of the 2 ports this week as “nearing full gridlock”.

The principle level of the article is how the CTA and HTA are calling for a halt to the detention and demurrage fees that shippers and truckers are being hit with in the course of this dangerous congestion:

The 2 trucking associations at the moment are urging terminal operators and delivery strains to droop detention and demurrage fees.

“Shippers and truckers are being placed on the hook for thousands and thousands of {dollars} of extra detention and demurrage fees, regardless of their incapability to return empty containers or choose up import cargo,” they argue. “The fast and honest plan of action is to instantly droop detention and demurrage.”

The CTA and HTA say they are going to take their case one step additional in the event that they don’t see progress quickly, desiring to name on the US Federal Maritime Fee [FMC] to intervene.

Whereas these present ones appear particularly egregious, shippers and truckers have lengthy complained about unfair demurrage and detention charges. Going to the FMC with demurrage and detention price complaints isn’t any new factor.

In truth, a 12 months in the past the FMC introduced it could it could “tackle detention and demurrage cost points” by adopting a set of suggestions Commissioner Rebecca Dye made. Commissioner Dye led an 18-month reality discovering investigation into these usually unfair demurrage and detention charges. Sadly, little motion has been seen from the FMC on the difficulty since then. It’s nicely previous time the fee took stronger motion to guard truckers and shippers in regard to this difficulty.

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